At 09:03 AM 12/30/98 -0800, Mike Shumko wrote:
>What is "normal" for software support fees?
>A fixed percentage of the current license fee?
>A percentage of the license fee you paid all those years ago?
>What do you expect to get for your support dollars?


It depends!  At different times a vendor may want to have different
strategies. Building market share might
lead to a low cost of acquisition, with little or no 'bundled' support (such
as training, etc). A carefully
scaled pricing mechanism might have a higher purchase cost for some
customers, with correspondingly more
training, on-site visits etc included. The secret is to match what the
customer (each customer?) needs with
what the vendor can most effectively and economically provide.

At various times, I've heard "15% of purchase price", "10% of purchase
price" fixed support cost, costs
based on an external metric, and several others. I suppose an ideal approach
might be:

1) Define the area where the use of the software will provide tangible
benefits to the customer
2) Within that area identify a public measurement that the customer WANTS to
maximise, and for which
   the software product is directly useful (or MINIMIZE - the point is that
the customer is proud  of
   the accomplishment, and expects to report it publicly, even if only to
the SEC!)
3) Tie costs (acquisition, support) etc to some tier of that measurement.

Obviously this is applicable only across a small range of software products,
but for those where it does
(or can be made easily to) apply, it is remarkably efficient and simple to
understand. Vendor and customer
share in success and failure alike.

Tony

PS Now I've got to design a product that identifies such measures for any
company and software product - ought to make a lot of money, huh!