The software maintenance renewal checklist: 7 factors to consider

 In Software

Software maintenance renewals provide a great opportunity to find savings within your IT spend.

For many organizations, maintenance is often automatically processed, meaning that some easy savings opportunities may be overlooked.

But as revenue opportunities for publishers, renewals provide customers leverage to negotiate better deals with suppliers, and can reduce both short- and long-term costs.

To help identify and maximize opportunities for savings from software maintenance renewals, we’ve identified seven key factors to consider before re-upping your agreement.

The software maintenance renewal checklist

  1. Entitlements versus usage. Compare your licenses owned and under maintenance against actual software deployed. In most cases there’s an immediate opportunity to reduce the maintenance paid to the publisher if you own more licenses than you’re using.
  2. Upgrade requirements. Review your software upgrade history. If your company has been content using older versions, the free upgrades that are included in most maintenance agreements may have little value.
  3. Support. If software support is part of the maintenance agreement, collect all data on the support calls made to the publisher during the last maintenance term. If few calls were made, you may want to consider more price-efficient support options, such as using third-parties (instead of the OEM) or downgrading from 24/7 support to standard business hours.
  4. Purchase history review. Review your organization’s maintenance purchase history for savings opportunities. For instance, if your organization conducts many transactional purchases at different small discount levels, you may be able to combine the purchases and leverage them for larger savings. Other opportunities for negotiation may also exist—for example, if the publisher automatically increases the maintenance term fee annually even if no other factors have changed.
  5. Pricing analysis. Compare maintenance fees against comparative software titles, especially those already purchased by your company. If another publisher offers a product with similar features for less, how does the publisher of your software justify its price premium?
  6. Feature comparison. Evaluate how alternate products compare against the publisher on a feature-by-feature basis. Experience and familiarity with the software will be key, but product review sites such as Capterra, G2 Crowd, Better Buys, and Crowd Reviews can also provide valuable intel to guide your analysis.
  7. Contract analysis. Determine if the publisher’s software agreement terms have any inherent risks for your company, such as abbreviated notice periods for audits.

Better insights for more informed decision-making

Once you’ve evaluated your organization’s software and maintenance usage, and gotten a clearer picture of the competitive landscape, you have three options:

  1. Terminate the maintenance agreement. If the maintenance is not being fully used or more cost-efficient alternatives exist, you can typically capture significant savings by cancelling the maintenance entirely.
  2. Renew the agreement, but renegotiate. If you’re utilizing maintenance, but have uncovered areas for improvement (e.g., more competitive pricing, automatic price increases, or certain contract risks), start negotiating with the publisher for a better rate. The publisher’s risk of losing your renewal gives you leverage to secure a more favorable contract.
  3. Renew the agreement as is. If you believe the publisher’s agreement is good for your company, a simple renewal is all you need. This option will rarely be the best route, but many customers choose it purely out of default, at least for long-tail publishers.

You should start running through this checklist well before any renewal is due–typically at least six months in advance.

The earlier the review is completed and the publisher engaged, the easier it’ll be for you to cancel the agreement and find an alternative, if needed. And the easier it is to find an alternative, the more leverage you’ll have in any negotiations.

Related Posts: You may also be interested in...

Leave a Comment

3 × two =

Pin It on Pinterest