An IBM software maintenance contract is supposed to give your business access to expert assistance in the event of a technical problem. Whether that’s in the form of a technical expert by phone/email or a patch/fix for a known problem. It also gives you access to version upgrades issued by IBM while your contract with them is in place. And you pay very handsomely for the privilege.
At the same time, IBM benefits greatly from a recurring revenue stream. In fact, just like many other software vendors, software maintenance contracts are an increasingly important part of their annual revenue stream – particularly when their traditional business is being cannibalised by the Cloud and they continue to struggle to be a player in that market..
A tool for driving new sales
Obviously IBM has a duty to their shareholders to generate as many sales as they can. And the software maintenance contract plays an important part in helping to drive new sales in the form of upgrades.
As IBM customers have commented in the past – the software maintenance contract is effectively a 20% tax levied on customers for the right to upgrade their assets. And with every upgrade there is an accompanying contract extension, helping to tie your businesses together for a further 3 – 5 years.
A tool for driving upgrades – whether you want to or not
To ensure your business remains engaged in the upgrade cycle, IBM withdraw support for older versions of software – whether they continue to function effectively or not. Obviously each new release should include additional features and functionality – offering some incentive to adhere to IBM’s upgrade cycle.
But the reality is that IBM then effectively controls your software strategy – and their priorities are slightly different to your own.
Stability versus recurring revenue
For the CTO, application stability is one of the highest priorities. The always-on business requires round-the-clock access to applications – so the focus is almost always on developing a platform that is robust and resistant to outages. Once bedded in and stability confirmed, there must be a very strong business case for upgrading, otherwise the trade-off is extremely hard to justify.
Allowing IBM to dictate the terms of upgrading means giving away control – and the stability of your platform too. Being forced to carry out upgrades places IBM’s need for profit ahead of your own operational priorities.
Are upgrades even necessary?
For legacy systems, or those that are not required for line-of-business operations, the need for perpetual upgrades is even more questionable. These applications are stable, reliable and simply “tick over” – so they don’t require new features. In fact, the only justification for upgrading would be to improve stability – and on an annual/bi-annual/tri-annual upgrade cycle it is likely those issues would have been resolved in-house long before the update ships.
The cautious, time-poor CTO will avoid upgrades even if they are entitled to them if it means maintaining stability and availability.
Breaking IBM control
Obviously your business cannot leave applications unsupported, but at the same time you cannot afford to be forced into an unwanted upgrade cycle simply to suit the demands of IBM’s shareholders. But the only way out is to drop IBM support altogether.
The risk-averse CTO may see this as a dangerous move – even for platforms that are not mission critical. But the benefits far outweigh any perceived dangers.
First there is the significant reduction in cost. Where you are currently paying IBM 20% or more of the original purchase price every year, Origina can halve that cost (or possibly more).
Second, you can exit the upgrade cycle and avoid all the secondary costs associated with an update. If your “out of date” applications continue to serve your business needs, you can maintain that asset for as long as you want. Factor in the reduced maintenance costs and the total cost of “legacy” system ownerships drops significantly moving forward.
Third, by employing ex-IBM engineers, Origina can ensure you receive a support and maintenance service that is equivalent to – or generally better – than the standard you have come to expect from IBM. Which means that your applications are fully protected and you can focus on other strategic projects safe in the knowledge that Origina has you covered.
Building a best-of-breed IT infrastructure that meets the ongoing needs of your business relies on having control of as many of your platforms as possible. And that means being able to define when and if upgrades are actually necessary to meet your operational targets – not being forced into an IBM-defined upgrade cycle.
For more help and advice about regaining control of your IBM applications, please get in touch.