July 01, 2010, 9:00 PM — To upgrade, or not to upgrade your company's core enterprise applications? That is the vexing decision that haunts companies, CIOs and budget planners everywhere.
On the surface, vendors' on-premise software upgrades should be welcomed by their customers who: receive access to a bevy of new functionalities and application enhancements; stay current with compliance and regulatory ERP updates; and remain architecturally nimble to integrate next-gen software and services later.
And yet most companies look forward to the undertaking with roughly as much excitement as a lifelong smoker has when scheduling his annual physical.
"Most business and IT execs put off upgrades as long as possible to avoid costs and minimize business disruption," writes Forrester Research principal analyst Paul Hamerman in a new report: "Application Upgrades: How to Make Upgrade Decisions When Business Value Proves Elusive" (Forrester subscription required).
The report offers an incisive, penetrating look at the pros and cons of on-premise software upgrades and the reasons why many businesses still struggle with the decision.
"Cost of ownership is a universal concern among business process professionals responsible for managing enterprise applications," Hamerman notes. "The ownership cost concerns range from the relatively fixed and predictable vendor maintenance fees, internal staffing, and infrastructure support to the less predictable cost of application upgrades."
He refers to app upgrade costs as a "wild card" when companies are trying to determine enterprise software TCO. That is because:
* New Releases Don't Happen Often. Hamerman writes that "the pulse" of releases for enterprise applications beats, typically, once every two years. "Some vendors have attempted to accelerate the pace of enhancements, with mixed success," he adds. (Of course, upgrades are one of the areas where SaaS and cloud services vendors have an extreme advantage over traditional software vendors, since they can roll out upgrades several times a year.)
