Factors affecting software maintenance effort and cost lets take a look at 2 products, both of which have been in use for a year and have over 20,000 users each. Furthermore, there are several that will raise the cost of maintenance annually by more thn 6% unless the customer puts a clause in the agreement to cap the increase. There are several factors around how postdelivery maintenance is conducted and its cost. Maintenance fees as a percent of the license cost are not cast in stone. Pmp can also be used to pinpoint the cause of failure, inefficiencies, and broken maintenance processes so they can be fixed. This calculator lets you analyze the total cost of ownership tco for an onpremise software system and a softwareasaservice saas system. The decision to repair or replace equipment should be based on minimizing the total cost of the equipment to the business over its remaining lifetime. The basic maintenance cost is then multiplied by each cost multiplier to give the revised maintenance cost estimate. Maintenance can be picked back up when the company is ready.
A large body of research material and investigation has not produced a definitive method. Benchmarking guide for software development and maintenance. Which factors affect software projects maintenance cost more. As your software systems become bigger and more sophisticated, or as your customer base grows, the amount of maintenance required increases proportionally but not linearly. Dod esi white paper software maintenance negotiations best practices 7 i. Mostly because maintenance is not clearly defined here. Accurately estimate your software maintenance costs galorath. The real cost of maintenance in software is usually readaptation and improvement, or fixing fundamental conceptual flaws and once the machine is in constant use and has accumulated. Software maintenance cost is derived from the changes made to software after it has been delivered to the end user.
Download scientific diagram development of software maintenance costs as percentage of total cost floris and harald, 2010 from publication. Sep 01, 2000 the popular benchmarking metric of costerv is a valuable tool for setting longterm goals when used correctly in conjunction with targets for plant reliability. Typically software maintenance fees are a small percentage of overall license fees paid on an annual or monthly basis. Schedule compliance is a maintenance metric that measures the percentage of time that scheduled work orders are completed.
Standard off the shelf maintenance agreements are most often. If maintenance is stopped, for any reason, the software is still yours and continues to work. What are typical maintenance fees as a percentage of up. It generally provides for overall support and maintenance. Are maintenance costs for onpremises servers high enough. Mar 28, 2014 software maintenance is the annual cost that you pay for upgrades and support of the software. Software maintenance in software engineering is the modification of a software product after delivery to correct faults, to improve performance or other attributes a common perception of. Perfective maintenance is concerned with the change in the software that occurs while adding new functionalities in the software. Whatever kind of business you may run, it is crucial to ensure the efficient maintenance of your building and your equipment so that operations can continue to run smoothly. That equates to a price increase of 25% not factoring in the cost of money, of course. Additional factors that bear on the decision, but may be more challenging to quantify, are.
On an average, the cost of software maintenance is more than 50% of all sdlc phases. Planned maintenance percentage pmp maintenance ratio. Therefore, any project not involving a software development process is excluded, for example. Any business can save 1218% by investing in preventive instead of reactive maintenance. Development of software maintenance costs as percentage of total cost floris and harald, 2010 in another study, the relative costs of maintenance and software. Development of software maintenance costs as percentage of total cost given the enormous costs and efforts involved in software maintenance, every company should consider. Software pricing considerations software maintenance. Security firewalls, encryption, antivirus, spam filtering.
Today, 20 to 22 percent of license fees is what most enterprises pay. Jan 09, 2010 1 see, for example, the work of barry boehm on cost estimation maintenance typically claims 4080% of all project costs, usually toward the higher end. Support and maintenance is generally calculated as a percentage of the licenses cost commonly in the range 1525%. The support and maintenance business is a cash cow for the traditional enterprise software vendors.
Nov 18, 2018 there are several factors around how postdelivery maintenance is conducted and its cost. The popular benchmarking metric of costerv is a valuable tool for setting longterm goals when used correctly in conjunction with targets for plant reliability. Ask for maintenance fees to be based on the discounted price of the software, not the list price. The software maintenance cost is driven by a percentage of the initial. Second, vendors are tightening enforcement of existing agreements. So, if we know how maintenance works and what affects our ability to do it, then we can improve those things to make better software, faster. The following steps should be taken prior to first entering or renewing a contract with a.
Understanding your total cost of maintenance tcm for sap. This definition of maintenance is a succinct outline of the benefits of software maintenance. Not very long ago, the typical software maintenance fee was 15 to 18 percent of license fees. This includes all updates, upgrades and technical support. Furthermore, there are several that will raise the cost of maintenance. Gather requirements the first step in managing software maintenance costs is to take an analytical. Organizations that are committed to measuring the effectiveness of their scheduled maintenance process use schedule compliance as a performance metric. Depending on your business model, you may need to discount the license cost deeply, but can still get the list price for maintenance. Are maintenance costs for onpremises servers high enough to.
Standard percentage rate for annual software maintenance. Ask for maintenance fees to be locked in, not allowing the vendor to increase fees from year to year. Depending on your business model, you may need to discount the license cost deeply, but can still get the list price. A vendors maintenance and support fee on each software license, usually 20 percent to 25 percent of the. Once we do so, we move into the next pricing tier for maintenance. Software maintenance in software engineering is the modification of a software product after delivery to correct faults, to improve performance or other attributes. This contract is usually calculated as an annual fee based on some percentage of the total software cost. Sap raises software maintenance fees for new customers. Initial hardware as a percentage of software cost 33% to 50% ongoing hardware maintenance 20% of the initial hardware cost initial design, build, implementation of services. Say in the previous system the factors having most effect on maintenance costs were product complexity cplx, which was very high, and the availability of support staff with application experience aexp, which was very low. Preventive maintenance involves implementing changes to prevent the occurrence of errors. Updating software, adding new functions, fixing bugs and solving problems. A big chunk of the 72 percent goes to maintenance and support and that reality isnt expected to change anytime soon.
Software does not wear out but it will become less useful as it gets older, plus there will always be issues within the software itself. Software maintenance is the annual cost that you pay for upgrades and support of the software. According to a plant maintenance study from 2016, 51% of manufacturing. Jul 23, 2014 a big chunk of the 72 percent goes to maintenance and support and that reality isnt expected to change anytime soon. Chapter 4 charts the area of general software cost models, which potentially may provide a basis for maintenance cost estimations. As a percentage of the original license fees, your vendor maintenance rate will increase to 32. A whopping 50% increase in software maintenance cost for this title. What are typical maintenance fees as a percentage of upfront. It must be supported, maintained and upgraded often across geographies and in multiple languages, currencies and regulatory climates.
I dont believe there is legistaltion to prevent a vendor from increasing this. Development cost versus maintenance cost stack overflow. You can somewhat keep it under control, but you cannot avoid it. Of course the percentage of each maintenance activity is variable. What are the typical maintenance fees as a percentage of hardware costs for enterprise servers. Software maintenance, understanding the 4 types coderhood. What is the industry standard for annual maintenance cost as a. Understanding the cost of software means tracking all related expenditures across its life cycle. Calculating the total cost of ownership for enterprise software. Development of software maintenance costs as percentage of total cost given the enormous costs and efforts involved in software maintenance, every company should consider ways to make savings here, as also observed in 15. Adjust those fields based on pricing details you receive from software vendors. This paper presents several known ways to save on software maintenance. You need to pay close attention to a couple of items in the software maintenance agreement as.
Software maintenance costs will typically form 75%. How to cut software maintenance and support costs and. An annual charge of 20% of the license fee list price is a good staring place. What are the typical maintenance fees as a percentage of.
This varies and is a bit of a loaded question because every software product is different. Jan 22, 2009 the industry is witness to rapid growth in alternative business models. We may be the exception, but the cost has always been 15% of the software and recently was increased to 18%. Most software providers can and do negotiate the maintenance cost. Software maintenance costs will typically form 75% of tco. From a 35year career in maintenance and reliability. Not very long ago, the typical software maintenance fee. But, most of that money goes to fund new development and, increasingly over the. Software maintenance increases software maintenance. Sap raises software maintenance fees for new customers cio. One major factor is the type of software development life cycle sdlc model used to.
The maintenance fee is the sacred cash cow for enterprise software vendors. Planned maintenance percentage is a valuable metric for tracking the health of a preventive maintenance program and identifying opportunities to reduce reactive maintenance. A third option is to move it infrastructure to the cloud while maintaining control over the application software. Maintenance is part of a software system cost of ownership. Oct 21, 2016 factors affecting software maintenance effort and cost lets take a look at 2 products, both of which have been in use for a year and have over 20,000 users each.
Technology vendors often sell a maintenance contract with their software. High software maintenance fees and what to do about them. How to cut software maintenance and support costs and fund it. The more complex the software, the more maintenance it will likely need to ensure continued use. Measures of maintenance cost have contributed to the decline of more than a few reliability professionals careers. Understanding your total cost of maintenance tcm for.
Its possible to minimize maintenance costs through intelligent planning and execution, but its also possible. There are a number of factors to take into consideration when deciding whether to repair or replace equipment, which weve broken down below. The software maintenance cost is driven by a percentage of the initial software license fee which is usually between 1625% of the license cost per year. The distribution of types of maintenance by type and by percentage of time consumed.
But, most of that money goes to fund new development and, increasingly over the past decade, to. These forces could pressure conventional software vendors to develop a lower cost model for customers. How to cut software maintenance and support costs and fund. Software vendors continue to rely heavily on recurring maintenance revenues to fuel their business. Gather requirements the first step in managing software maintenance costs is to take an analytical approach to requirements and cost of software maintenance. The real cost of maintenance in software is usually readaptation and improvement, or fixing fundamental conceptual flaws and once the machine is in constant use and has accumulated state, the cost is more analogous to fitting or replacing an aircraft engine inflight. The top maintenance statistics you should know for 2017. There are various factors, which trigger maintenance cost go high, such as. Oct 25, 2012 development of software maintenance costs as percentage of total cost floris and harald, 2010 in another study, the relative costs of maintenance and software development management were estimated more than 90% of the total cost of the software life 9, 10. Development of software maintenance costs as percentage of total. It salaries apportion some percentage of staff salaries to the application. Accurately estimate your software maintenance costs. Software maintenance is the annual cost that you pay for upgrades and. I am in the process now of negotiating with the vendor to see if we can lessen the impact.
What are typical maintenance fees as a percentage of upfront license costs for enterprise software. Planned maintenance percentage pmp maintenance ratio fiix. Software maintenance pricing fair or out of control. A vendors maintenance and support fee on each software license, usually 20 percent to 25 percent of the net license. Jan 24, 2017 an annual charge of 20% of the license fee list price is a good staring place. Product 1, which well call taco bout it, is a geolocation enabled social networking mobile app that lets people who love tacos connect with other taco loving folks. Its possible to minimize maintenance costs through. One major factor is the type of software development life cycle sdlc model used to develop a software. Preventive maintenance involves implementing changes to. Anyway it depends on the companies and software maintenance. A study on estimating software maintenance found that the cost of maintenance is as high as 67% of the cost of entire software process cycle.