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Stop software maintenance fees from siphoning away your IT budget

Businesses spend $12 billion on maintenance fees for software that go unused.

Overview

Take an in-depth look into the three main areas to drive the most savings in the software maintenance category:

  • Initial Buy: What happens during the initial buy phase has an outsized impact on cumulative software costs.

  • Renewal and Right-Sizing: Drive value through re-negotiating terms and right-sizing licenses and entitlements.

  • Third Party Maintenance: Evaluate moving to a third party maintenance solution.

Our project data show that clients can reduce software maintenance costs by 20 to 25 percent.

Key Findings

According to our benchmark data, software is either the first or second largest category of IT dollar spend for most companies. Of that amount, 50-60 percent of software spend goes to maintenance and support. The problem is that many of these dollars are wasted. Studies indicate that each year, businesses spend $12 billion on maintenance fees for software that is unused—a staggering statistic.

Given the amount of wasted maintenance spend and the opportunity to drive savings in the software maintenance category, we recommend focusing on three key areas to help your company get its share of savings.

  • Initial Buy: What happens at the point of initial purchase is the tail that wags the dog. In other words, what happens in the initial buy phase has an outsized impact on cumulative software costs, so it’s critical to get this right.

  • Renewals and Right-Sizing: Contract renewal time is another opportunity to drive value through re-negotiating terms and right-sizing licenses and entitlements, but you don’t have to wait—look at opportunities to actively re-scope and right-size your software environment now.

  • Third-Party Maintenance: Perhaps the most aggressive approach is to evaluate canceling maintenance/support altogether, or moving to a third-party maintenance solution. Another option is considering the switch from on-premise licensing to a SaaS/subscription model.

Recommendations

Software maintenance is an often-overlooked area of IT spend that is sub-optimized in most organizations. Yet maintenance fees represent a sizeable area of recurring IT spend that can almost always yield significant savings if addressed properly.

These savings can be a boon to CIOs seeking to redeploy dollars away from run-maintain operations and into strategic IT initiatives that support customer-facing growth initiatives and innovation objectives