Do I Need to Renew My Software Maintenance Contract?

For most businesses, the purchase of software - especially robust software that is central to business operations - is a big expense. Once that software is purchased, we tend to look at the software maintenance contract in the same way we might consider a warranty for a television. Is it really needed? Is the price justified? Unlike a television warranty, software support packages are typically billed annually by the manufacturer or support provider. When considering whether a software maintenance package is really necessary, it's important to evaluate its impact. Let's take a look at a few considerations.

What does the software maintenance contract include? The software maintenance bill charged by the manufacturer typically entitles you to support services if something goes wrong and also entitles you to new versions of the software and any minor releases and bug fixes as they are available.  It’s your security blanket.  Your investment in the software is protected because there is someone to call when things are not working as expected.

How well has the manufacturer has delivered support when you have needed it? Hopefully, you feel good about the level of support you get and your partnership with the vendor is valuable.  We know that is not always the case.  Sometimes you may go a whole year and not need to call for support (that’s a good thing!) and question what the value is of the service.  Why pay for something you don’t use?  Or, you may have encountered a situation that required you to place a support call and the experience was less than ideal.  Another common situation is that you are planning a move to another product, but just haven’t quite completed the transition, and hesitate to renew on software with a limited life in your business.

Is renewal of the contract required for the continued operation of your software? Maintenance and support contracts after your initial purchase are almost always optional for you.  Your software probably won’t stop working because you didn’t pay the maintenance bill.  However, that doesn't mean that having support availability isn't important. Here are some ways to determine if you can afford to let the contract lapse:

1. Are you still using the product? If you still use the product on a regular basis, it’s probably a good idea to renew.  The last thing you want to have happen is for your operations come to a halt because you tried to save a few bucks.  If you are in the process of decommissioning the product, you may want to contact your provider and ask if they are willing to offer you an alternative.
2. What is your risk if a failure occurs?  How would the company be impacted if the system failed?  Is it very disruptive or just annoying?  Is there important data or information stored in the system?  Make sure you think through a variety of scenarios that would cause you to access that system and the level of importance to the company.  The higher the risk, the more important to make sure you have some type of support.
3. Are there any planned changes in your IT environment that may impact the product? Your IT team should be on top of this for you, but if a server upgrade or new workstation is required, you want to make sure you have support if an upgrade to your environment impacts your product.  Likewise, if you have any integrations between multiple systems such as your ERP and AP workflow and imaging system, make sure you understand the impact and risk.
4. Do you have other options?  If you are not convinced that renewing your maintenance contract is a good value, explore other options.  Can you negotiate a different contract with your provider? Can you find alternative terms or additional value from your provider that can make a difference for your company? Get creative and ask for what you want, you just might get it!

For software that is key to operations, it is generally well worth maintaining a software maintenance contract. Without it, when things go wrong, the cost cutting measures of dropping maintenance end up costing the company significantly more in lost time, lost productivity and other unplanned expenses.  There are often options available to you that you should explore before choosing to cut support completely.  Talk to your vendors, get creative, but don’t take unnecessary risks.