April 30th, 2009
Broken promises: your maintenance dollars
Every once in a while someone comes out of left field and produces a piece of information that is startling in its simplicity and elegance. The chart above says it all. Jason Carter has been tracking the relationship between maintenance revenue and R&D spend for five companies since 2001. As you can see, the amounts put back to product have been steadily declining for years. As Jason succinctly puts in the accompanying post:
The implied promise of maintenance fees is that you pay them each year to the vendor in order to fund the ongoing development and enhancement of the product you rely on. The promise is being broken. Badly.
Regular readers will know this is an issue I and others have been talking about for what seems forever. You can argue whether the denominator should include other line items but that would obscure the argument the vendors themselves produce when challenged. Notably missing is Microsoft. That’s because they don’t report their numbers in enough detail from which to analyze the numbers.
Even these numbers don’t tell the full story. Backfilling, bug fixes and the rest are all part of R&D spend so what’s the real amount put into innovation? Your guess is as good as mine but I’m betting it is a modest fraction.
Dennis Howlett has been providing comment and analysis on enterprise software since 1991. See his full profile and disclosure of his industry affiliations.
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