The Wisdom of Software Maintenance Subscriptions

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When Sage Software first introduced the annual Software Maintenance Subscription Plan some years ago, frankly, we didn’t like it. Up to that point, version upgrades had been priced individually and were an optional investment. Now our customers were being asked to pay in advance for version upgrades that might contain features they wouldn’t opt for otherwise.

At the same time, and seemingly unrelated, we were experiencing an occasional loss of a long term MAS 90 or MAS 200 customer to a competitive product. While things like this are certainly not uncommon in the software business, we made an important new discovery. These customers had become disenchanted with MAS 90 over the years and had replaced their software with another mid-range accounting product with similar capability. They were paying the acquisition cost of a brand new product, plus the expense of retraining, and were subjecting themselves to the uncertainties of a conversion and a future of using an unfamiliar tool to run their business. Why?

The answer has a lot to do with making periodic maintenance investments in software assets. Almost every one of the customers who had spent so much money to buy a new accounting system shared something in common. They had not kept their MAS 90 software at the current version. Over the years, new features and improvements in functionality had been added both to MAS 90 and to competitive products. Six or eight years can be a lifetime for a software product. It isn’t hard to become disenchanted with vintage software when comparing it to current technology and the prevailing set of features and functions that have come to be expected.

The solution turns out to be the Software Maintenance Subscription Plan. It keeps the software new. For a predictable amount that can be budgeted each year, the software is updated every time a new product version is released. In six or eight years, the customer will still have brand new competitive MAS 90 software that is comparable to any current product in the market. It will be using current technology with the latest look-and-feel and will deliver all of the expected integrations, ease-of-use, and processing capabilities.

 Here’s why you should be on the Software Maintenance Subscription Plan:

  1. The software stays current and competitive with comparable products available in the market place, year after year.
  2. The cost to maintain the software is predictable and can be budgeted.
  3. Typically, in six to eight years, the cumulative annual cost of the Software Maintenance Subscription Plan will approximate the new acquisition purchase price. However, the software is updated with each release and is the most current version during each year of the period. On the other hand, if new software is acquired every six to eight years, it is current for only one year during the life of the product.
  4. Assuming a six to eight year life cycle, the entire replacement cost must be funded at the time of acquisition if purchasing new software. With the Software Maintenance Subscription Plan, the replacement cost is distributed over each year of the product’s life and the new product is already paid for when it is time to be replaced.
  5. There is no need for a system-wide conversion or major retraining to get the latest in software capability. Changes from year-to-year are easily absorbed and implemented into the workflow.

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