Rob Addy

A member of the Gartner Blog Network

Rob Addy
Research Vice President
5 years at Gartner
More years than I care to remember in the IT industry

Welcome to my blog! I post about all things services related from the provider perspective. End-users are welcome to read but please be aware that you may sometimes find its content unsettling. I will endeavour to post frequently (as it's a lot cheaper than a therapist) but please forgive me if other more mundane activities occasionally get in the way...Read my official Gartner bio here

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Are Extended Support Fees Immoral and Indefensible?

by Rob Addy  |  March 18, 2012  |  3 Comments

Requiring customers to pay an uplift for extended support is obscene. Or so some would say. Certainly on the face of it, extended support offerings do look less than good value. ISVs typically state that the code line is archived and that no updates, patches or bug fixes will be forthcoming. The very fact that the solution has been out in the wild for a period means that crowd sourced content and guidance is likely to be readily available. Two of the primary pillars of traditional software support value have been removed or negated and replaced with a hefty fee to “encourage” users to migrate forward onto a “supported” version. Some providers state that the uplift is due to the increased costs of delivery associated with supporting defunct versions. I don’t buy it. And neither do their customers. Others claim that extended support fees are a cynical ploy by the ISVs to extract more cash from their customers. Upgrades can be complex, time consuming and costly. Is it any wonder then that some organizations prefer to pay the uplift rather than bite the bullet and move forward? Are ISVs really this cold and calculating? Perhaps. But for the purposes of this blog post let’s try to think the best of ourselves rather than the worst.

We’re not bad, we’re just portrayed that way!

When questioned on the point many ISVs suggest that their motives for demanding an uplift are honourable and pure. Customers should migrate so that they can take advantage of the wonderful new features and functions of later versions – or at least that’s how the story goes… But what if the customer is happy on the version they are running? What if it does all that they want and need? Why would any business take a happy and content customer and deliberately try to upset them? It is clearly ridiculous. By forcing the issue, ISVs could inadvertently encourage customers to go to market and look for alternatives. Alternatives which could cost the ISV dearly. After all, getting 20% of something is an awful lot better than getting 25% of nothing!

It’s not our fault, we’re just the services patsy taking a fall for those development fly boys!

Is support being used as the bogeyman to compensate for deficiencies within the product management and development ranks? Maybe. Surely if the next version were significantly better and provided sufficient incremental benefit over and above earlier incarnations then customers would be clamouring to upgrade? If the business case for upgrade is marginal, who can blame customers for wanting to stick with what they know and what is working for them? Customers opt not to upgrade for a wide variety of reasons. Providers must attempt to understand these reasons and address them on a customer by customer basis if they are to drive new version adoption. The responsibility for this rests with all functions in the provider, not just support. But support DOES have a role to play (See the ‘Product Advocacy’ related sections of “Market Insight: Gartner’s Product Support Maturity Scale, Version 2” for details and examples) and must step up to the plate to do its bit.

Extended support costs more, delivers less and has minimal business value

When I talk to end-user customers about extended support I always ask what they intend to do with the system in the short to medium term. If they are running it into the ground and have no intention of taking it forward, or better yet if they have a replacement system on the horizon that they plan to switch over to in a reasonable time frame then I often suggest they consider the “no support” option. If there are unlikely to be external factors that make new functionality mandatory (such as major legislative changes ) and the risk of attack is manageable or non-existent then why not? “And we thought you were a friend of the industry!” I hear you cry. I am. I am. But sometimes even our friends do things that we don’t like. But rest assured I am doing it  based upon the best of intentions. If the industry clings on to its traditional extended support model then it will drag the reputation of the rest of the discipline into the mire.

Tangible value protects…

…Even under the glare of increased customer scrutiny!

Why an uplift? Why not a discount?

Apologies for the heresy but if the service fails to offer tangible benefit in comparison to the normal offering how can an uplift ever be justifiable. And if we extract that point a little then it becomes obvious that a discount would perhaps be more appropriate. “OMG! The man’s lost his mind!” I hear you shriek! Perhaps. But isn’t it better to reduce fees a little proactively rather than to lose it completely on someone else’s schedule? “Customer’s won’t defect over extended uplifts” you cry. They might. In fact, some of the organizations that I talk to already consider the notion of extended support uplifts as a step too far… Discounting may seem like an extreme option. It will obviously be unpalatable to many providers. But making the customer cost impact of switching to extended support net neutral would be a very good start and would go some small way towards addressing the current value imbalance.

Extended support uplifts are evil… We get it. We are evil by association. We get it. Oh woe is us…

Extended support offerings are perceived badly because they are generally badly defined and poorly executed.  But they don’t have to be. If provider’s could show incremental activity and value from extended support then maybe their customers would be less enraged when required to pay an uplift.  Below are examples of just some of the ways that extended support service offerings could (and should) be extended (pun intended) to deliver, and be seen to deliver, real value:

  • Guidance on how to isolate the system from the slings and arrows of outrageous fortune (as well as security risks from the outside world). Systems that have gone out of formal support cover may need to be placed into a state of stasis if they are to remain stable and deliver value reliably.
  • Provision of low level forensic configuration change auditing capabilities to help enforce tightened change management processes.
  • Operational risk assessment services to help customers evaluate the threats associated with proposed changes and give guidance on the types of control measures that should be put in place.
  • Systems value drift assessments i.e. analysis of how far the capabilities of the installed system have diverged from the business requirements and the associated opportunity costs.
  • Migration readiness services that help customers to prepare for the day when (and if) they decide to upgrade.

Soooo… to answer the question I posed as the title of this post…  Are Extended Support Fees Immoral and Indefensible?  In their current format; Yes. But the current format can be changed. I’ll go further than that and state that I believe that the current format must change. It won’t happen overnight. It might not happen at all. But it could happen. And a revised offering with service elements that cover the bases outlined above (and a few others) could be easily defended and perhaps even promoted as a differentiator!

TRKFAM :-)

3 Comments »

Category: Support Strategy Support Value     Tags: , , , , , , ,

3 responses so far ↓

  • 1 Dave Kind   March 19, 2012 at 1:49 pm

    Hi Rob

    Enjoyed the blog, I have a very mission critical background, mostly hardware/Microsoft products (think Exchange servers and HP) and now I work in the realm of Rugged and Mobile devices.

    The service is awful in this industry too and I see a similiar trned with manufactruers in my industry only offering things like parts availability if customers buy the 3 or 5 year service products with the devices which can often be 1/3rd of the price of the device. I think they are digging a grave for themselves and would love to here your points on a more hardware/repair related service perspective.
    Perhaps you’d like to guest blog on blog.ruggedandmobile.com?

    Dave

  • 2 Rob Addy   March 23, 2012 at 11:44 am

    Ah… the joys of being “edited”… :-)

    http://www.theregister.co.uk/2012/03/19/software_support_fees_immoral_and_indefensible/

    It’s interesting to see how the above article has been received by end-users and their comments. Most have obviously not read the entire blog post. A self selecting sample have naturally taken the opportunity to lambast the industry (as will always be the case I guess). A couple have taken their chance to take a sideways snipe at the good ship Gartner for not being a charity (This is of course their right but it does show a lack of understanding of the Gartner business model). But there are some pearls of wisdom in the chain if you can bear to sift through the vitriol.

    It is a shame that the article failed to note that I also suggested abandoning uplift fees or introducing discounts in conjunction with improving the scope and value of extended support offering. I guess that would be slightly less newsworthy… “Gartner suggests ISVs lower prices and increase value! Shock Horror!”

    Happy days :-)

  • 3 Rob Addy   March 23, 2012 at 11:51 am

    @Dave,

    Many thanks for the comments. Glad you’re enjoying the blog. Not too sure if I’ll have the bandwidth to craft anything specific for your blog but please feel free to link back to anything that catches your eye and/or fancy.

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