With the likes of SAP and Oracle increasing support fees, it’s no wonder business leaders are asking whether they’re being taken advantage of.
Price rises have already, or are coming for your software support contracts. SAP
It is not the first time this has happened. Oracle has been increasing their support fees in line with inflation for many years and will likely continue to do so. The reality is that prices are rising dramatically for businesses across all verticals. It affects all aspects of business operations, from material costs to wages to cloud application use. And it was always difficult to imagine a scenario where the software giants didn’t jump on this opportunity to hike their support costs, too.
This leaves business leaders and their C-suite executives in a quandary. Supporting and maintaining critical software systems is non-negotiable. No business wants to be left in the dark if a product fails or an urgent upgrade or fix is required. But an 8% rise in support fees is steep, especially in the context of software vendors’ staggeringly high margins on their support revenue – between 75% and 92%.
It’s no wonder business leaders are looking at those figures and asking whether they’re being taken advantage of. Software support is essential, and many may fear they have no option but to simply absorb the fee increase.
Fortunately, there is a way for businesses to cut their software support costs without – crucially – compromising on the quality of the service they receive. Here’s how.
Interrogate your support contract
As your more expensive Oracle or SAP support contract comes up for renewal, this should open a discussion. Try to critically analyze the quality and cost-effectiveness of the support service you’re receiving from your vendor. This is the perfect opportunity to evaluate how hard your support contract works for your business.
If you’re left asking why you’re paying so much more for a service that is staying the same and that you’re not perfectly happy with, then it’s time to start looking at the alternatives.
Make immediate cost savings with third-party software support
Enter third-party software support. The starting point with third-party software support is always at least 50% the cost of support offered by the software vendors themselves. For example, at Spinnaker Support, one third-party support provider, customers average 62% in hard cost savings vs in-house Oracle support.
In consideration of this saving, businesses might wonder if there are inherent compromises to the quality of service to make such huge cost savings.
This is where third-party software support has the edge. Cutting costs does not mean giving up on good service. In fact, third party support if often better and more flexible.
First, your business should only ever be paying for the support you need. A third-party support provider should be able to review the historical use of your current support to understand the intricacies of your business’s unique needs and requirements. If there are elements within the support stack that you’re paying for but not using, third-party software support will eliminate them.
Your business shouldn’t settle for anything less than top-shelf, personalized customer service. What does this mean in practice? Choose a support provider that prides itself on the quality of its service. It should include the following:
- Qualified, experienced engineers that understand your software needs,
- Transparent contracts,
- Effective communication of complex issues,
- Fast response times and resolutions,
- Informed advice on upgrades and future maintenance needs.
If your business is not receiving this level of service from your software vendor, you should ask yourself, why not.
Your software services should be aligned with your business’s individual needs. You should be treated as a trusted, long-term customer whose visions and goals are important.
Conserving budget in a difficult economic environment
A significant proportion of the modern IT budget is reserved for operational tasks and maintaining systems – including software support. So, when businesses see these operational costs rise, even fewer resources are allocated to growth, innovation, and future-proofing. This is a problem for businesses looking to strengthen their position in a difficult economic climate.
A tangible benefit, therefore, of third-party support is reduced software maintenance costs. Of course, any cost-saving effort that improves operational processes is a big win. But a cost-saving effort that supports businesses as they weather the inflationary storm. One that gives them the space to invest in their brand, people, and growth trajectory is a huge win. It will also provide a significant long-term payoff without any short-term pain or compromise.
With so much of today’s IT budget funneled towards support contracts, it’s critical that they’re worth their weight and deliver on the kind of service your business needs. On this front, many businesses are left disappointed – and that’s before the hefty price rises are baked in every year.
Third-party software support is the way to avoid these price hikes, ensuring that your business’s objectives are understood while receiving a service that is always improving, flexible, and personalized. Support contracts may be non-negotiable, but a best-in-class service that supports your existing infrastructure now and in the future is not.
Spinnaker is the steady force entrusted by companies worldwide to solve their most pressing and essential software needs. Our experts provide an extensive services portfolio of third-party support, managed services, and consulting to optimise client software ecosystems – freeing up valuable capital and resources so they can realise the full potential of their software and navigate their businesses with certainty.
