Are You Overlooking Ongoing Fees for Maintenance and Support?

One of the most important considerations to take into account when assessing an IT service management solution has to be it’s ability to scale with your business. If you’re searching for a solution, it’s probably because you are a successful business that’s growing, whether that’s by revenue or headcount, meaning you have more and more technology to track and troubleshoot.

But, do you truly understand what your requirements are? Do you know how many technicians need licenses now? What about how many will need licenses next year? What features and functions are critical to your future success? If you don’t know the answers to these questions, stop looking for an ITSM solution, and determine the basics. Otherwise you are setting yourself up for some serious upfront costs or some pretty terrible down the road costs (and, no, we’re not talking about from Samanage).

Reduced Service, Increased Costs

Many of the large IT service management vendors have products that are more than 20 years old, making them a mix of complex components and perpetual license models. While the vendor receives the majority of revenue upfront, ongoing fees for maintenance and support are a factor often overlooked or underestimated by a new customer. The customer is always at a disadvantage as the number of customers increases with a vendor, market penetration reaches a plateau, and growth slows down. This forces the vendor to reduce investment while increasing maintenance rates. The result is service degradation, limited new features, and increased cost. Overall, not a good place to be.

Incremental Revenue

The natural reaction of the vendor is to look for “easy” incremental revenue, meaning the temptation of taking a new piece of functionality and introducing it as a “separately priced option” kicks in. Of course, the customer always expects that the new functionality is simply an upgrade and should be covered by their maintenance fee. Unfortunately, this is not addressed in the perpetual license/maintenance agreement, leaving the vendor with total discretion.

Extremely Complex Pricing

Many vendors tout their ability to expand across your organization. “It’s capabilities are for more than just IT,” they say. But, the result is a pricing model that is full of surprises for the customer as the product is adopted across their organization. Surprisingly, some so-called SaaS vendors have elected to adopt this approach, only because it is “common practice.” The result is that mid-market and enterprise customers using SaaS applications need to be very aware of exactly what is being purchased, and extremely cautious of any “bait-and–switch” strategies in play.

For example, when assessing one of the leading ITSM SaaS vendors, their pricing begins with the purchase of one of six standard offerings (one is ITSM). Then, once the standard offering has been purchased, there are 10 options or add-ons. Unfortunately, it doesn’t stop there… In addition to those options, there are up to six different user types to select from. Think about how many permutations there are! To make it “easier,” vendors may offer a number of packaged suites by combining some pre-selected set of standard offerings, options, add-ons, and users, and these may even be offered at a discount. But, the truth is, no packaging will ever meet the exact needs of any customer, resulting in the need to venture outside of the predetermined suite and incur an upgrade costs.

The bottom line is that this is all becoming too complicated, requiring customers to have an in-depth understanding of how the pricing works before they commit. This is why the industry analysts such as Gartner have software pricing specialists available to help their clients.

The truth is, it doesn’t have to be this complicated and time consuming to find the right ITSM solution. A true SaaS enterprise service management solution, like Samanage, is ready to expand with you. There are no versions, upgrades, or sales cycles that take months just to narrow down what the right fit it for your organization. You’re busy enough, estimating the pricing and licensing structure of an ITSM should be cut and dry.