You speak English?

Would you like to be taken to the English version of our site?

It seems that you speak German.

Would you like to be taken to the German language site?

You speak French?

Would you like to be taken to the French language site?

The Modern CIO is driven by financials - so why throw away money on unnecessary support coverage?

Apr 11, 2018
Tomás O'Leary
Tomás O'Leary
Tomás O'Leary

2018 is set to be another year of record-breaking IT spend. Gartner estimates suggest that global spend will top $3.7 trillion for the first time ever this year. But despite there being more money available to spend on IT, the CIO is under increasingly pressure to demonstrate value for money.

Importantly, the average IT budget increase is just 4.3%, so the CIO will still need to extract maximum returns. Otherwise the strategic IT projects that drive digital transformation may still be under-funded, threatening the long-term outcomes of these projects.

The issue of dead money

Perhaps the biggest threat to future IT projects is the issue of legacy IT. According to Gartner, 80% of all IT spend is “dead money” – keeping the lights on, rather than driving strategic IT projects. In this scenario, just 20% of IT budget can be invested in the new developments that will keep the business moving forwards.There are plenty of factors involved in keeping the lights on, but IBM support contracts are a significant contributing factor for their clients. The issue is even more pronounced when dealing with ancillary applications – those that are not truly line-of-business, but which must be maintained for operational reasons.For IBM, support contracts represent a significant revenue stream, and they will often over-specify your requirements to maximise income. There are two key areas where you could be paying more than is required.

1. Too many licenses

When preparing maintenance contract quotes, IBM will always estimate according to total license purchases made in the past. For line-of-business applications, there’s a very good chance that all of those licenses are in use – but the same is not necessarily of older applications.Accurate software license management is critical to obtaining the most competitive quotes – and ensuring you don’t overpay for support or maintenance you don’t use. Always ensure that you have a completely accurate count of how many licenses are in use so that you can approach IBM (or an IBM third party support provider) for a more accurate quote that avoids overspend.

2. Support over-provisioning

IBM support agreements are frequently inflexible, aimed at enterprise-class coverage. Clearly this level of coverage is highly desirable for line-of-business operations where outages can have a significant impact. But do you really need 4 hour on-site support for a legacy/archive application?By all means try and negotiate a better deal with IBM – but their inflexible contract terms are unlikely to accommodate the specific needs of your business. If anything, Big Blue strenuously avoid custom agreements because the increased overheads eat into their own profit margins.

Time to think outside the traditional IBM support box

IBM support is clearly geared against your business – particularly if you have no intention of carrying out an unwanted upgrade to the latest version of your software. At every renewal negotiation you will be encouraged to purchase support coverage you don’t need, for licenses you don’t use.An IBM third party support provider will even help to audit the application licenses you own, and how many are in use. Software license management remains a significant administrative overhead for your business, so outsourcing responsibility – even if that’s nothing more than the discovery process – allows your IT team to focus on other tasks.The third party provider can then tailor the support coverage your business needs to ensure applications are properly maintained and protected. Most importantly, custom IBM support agreements significantly reduce the risk of overspend, freeing up cash for investment in other strategic projects.

To learn more about how your business can stop overpaying for IBM support without compromising the quality of coverage received, please get in touch.

Recent Posts

Forrester Research reveals how to save on IT budget in a recession
How can companies find savings during the recession? A new Forrester Research report reveals how to save on the IT budget.
The top 10 best tech podcasts to listen to in 2020
Want to know what the top tech podcasts to listen to are? We've gathered the top 10 best tech podcasts for 2020.
A peek behind the curtain at an IBM® software contract
IBM® software contracts lock businesses into long-term deals, but do they always have what's best in mind for the client?


Ihr guter Vorsatz fürs neue Jahr – Kosten senken
Verabschieden Sie sich von erzwungenen Upgrades und genießen Sie 2020, glücklich unterstützt von Ihrem Vorsatz fürs neue Jahr.
Können auch Sie bei Ihrem IT-Budget 60 % einsparen? Wir sagen es Ihnen!
Wenn Unternehmen zu Origina wechseln, reduzieren sie damit im Schnitt die aktuellen Kosten für Support und Wartung ihrer IBM-Software um 60 %. Wenn Sie wissen möchten, ob das auch bei Ihnen der Fall wäre, ist der erste Schritt zu einer Zusammenarbeit eine Machbarkeitsanalyse.
Neue Rollen, neue Aufgaben – das Profil des SAM ändert sich.
Innerhalb der IT-Abteilung wird der Bereich Software Asset Management gern mal links liegengelassen. Das heißt, der SAM erhält nicht immer die Anerkennung, Unterstützung oder Ressourcen, die er verdient (und dringend benötigt).


Votre résolution pour la nouvelle année: réduire les coûts
Dites adieu aux mises à niveau forcées et profitez de 2020 avec le soutien de votre résolution du Nouvel An promise.
Découvrez comment ÉCONOMISER 60 % sur votre budget informatique
Origina permet à ses clients d’ÉCONOMISER en moyenne 60% sur leurs coûts annuels de maintenance et de support des logiciels IBM. Pour savoir si votre entreprise a un intérêt à confier le support de ses logiciels IBM à Origina, la première étape est de réaliser une étude de faisabilité.
Comprendre l’évolution du rôle des SAM
Dans les services informatiques des entreprises, la gestion des actifs logiciels (Software Asset Management) passe facilement au second plan. Les responsables SAM bénéficient donc rarement de la reconnaissance, du soutien ou des ressources qu’ils méritent - et dont ils ont besoin.