July 20, 2010, 8:12 PM — Analyst firm Gartner has formed a new advocacy council around the issue of IT maintenance contracts and issued a "code of conduct" it wants vendors to follow, actions that could further intensify an already hot topic.
Maintenance fees, which are charged annually in exchange for product updates, bug fixes and technical support, have come under increased scrutiny in recent years as companies have looked to reduce IT spending amid the economic crisis. SAP's 2008 move to transition customers to a richer-featured but pricier support service was met with considerable blowback, and the applications giant ultimately made some conciliatory concessions.
For vendors, maintenance dollars are crucial, as they provide a steady stream of income even when new license deals are scarce.
But maintenance also represents the single largest expense for many IT shops, Gartner said in a report accompanying the announcement.
The new code of conduct, developed by Gartner along with a number of technology executives in its newly formed Gartner Global IT Council for IT Maintenance, seeks to correct any imbalances between the value customers receive for maintenance fees and the revenue they provide vendors. It includes the following clauses:
-- a right to "regular, appropriate, predictable updates to software products";
-- response times and support levels "based on application criticality and other business factors";
-- fair percentage ranges for annual maintenance fee hikes or reductions, and long-term caps on increases;
-- the ability to stop or alter support at any time for unused products;
-- predictable and reasonable support levels for the entirety of a product or contract's life cycle;
-- clearly spelled-out support time lines for older systems; and
-- the right to "explicit statement and approval of support details at the line-item level"
Members of the council hope the code will act as a starting point for discussion, "with the goal of transforming these basic principles into standards that are accepted and respected across the industry."
Altimeter Group analyst Ray Wang, who has carved out a niche as an advocate for end-users concerning maintenance issues, praised Gartner's action, but with a caveat.
"It's a good start. Customers need a good base line and a bill of rights evens the playing field," Wang said via e-mail. "There could be more rights across the lifecycle, and third-party maintenance should be a key requirement."Third-party maintenance firms offer reduced-price services to companies with no immediate desire for upgrades, which are only available through vendor-provided support.
Another industry observer echoed Wang's stance.