Maintenance Fees as a Disruptive Force

Maintenance fees are one of the eight disruptive forces needed to be managed in order to avoid a huge rise in IT asset costs, according to Gartner. With budgets tight, maintenance fees can be seen as both a disruptive threat and an opportunity to drive efficiencies.

OEM’s have been increasing support costs for many of their hardware and software platforms for years. At a time when many third-party suppliers are holding or even lowering prices, IBM have increased their support costs another three percent in 2013. Companies that have made large investments with IBM can be seen as cash-cows, unable to move off their systems and forced to take out expensive support contracts that make up to half of the OEM’s profits.

According to Alexa Bona, vice president and distinguished analyst at Gartner:

“These fees are rising steadily, and are more difficult for ITAM and IT procurement managers to reduce, even when the software is not in use. To deal with these changes, ITAM and procurement professionals must improve their demand management skills, avoid purchasing licenses that they do not require and negotiate price protection for maintenance payments. They must also understand the impact of emerging third-party maintenance options and recent EU rulings on the resale of licenses.”

We are however, seeing end-users beginning to resist this. Recent Supreme Court of the EU ruling stated:

”Even if the maintenance agreement is for a limited period, the functionalities corrected, altered or added on the basis of such an agreement form an integral part of the copy originally downloaded and can be used by the customer for an unlimited period.”

As well as this, there has been significant support given to the Service Industry Association’s ‘Digital Right To Repair’ coalition. Formed to oppose the restrictive practices being employed by OEM’s, the Digital Right To Repair is standing up for end-users’ rights. We are seeing more and more end-users voting with their feet and moving their maintenance contracts to creditable third party suppliers.

At Origina, we believe that maintenance fees can be seen as a disruptive force that if not managed carefully can lead to a big increase in IT asset costs, but we also believe they can be seen as an opportunity to drive down these costs, if third party providers are considered.

If you’d like to know more about maintenance costs and their potential to save you money, contact us.

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