Trends in Fee-Based Support (2008)
Trends in Fee-Based Support
Publication date: 7/08
Over the past decade, product support and support-related services
have evolved from being an annoying drag on profits to one of the
largest sources of revenue for most technology companies. In fact,
maintenance alone generates almost 40% of total sales for larger
software companies, according to the ASP’s annual Maintenance &
Services Ratios report. In most market segments, companies that
still treat support as a cost center are clearly outside the
But there is still no mainstream consensus about how fee-based
support should be delivered. Although many support managers talk
about “standard” maintenance plans and “levels” of services, reality
is quite different. Some companies have highly structured programs;
others create customized plans for almost every customer (often
assembled out of a portfolio of individual add-on services). The Web
further complicates the picture: For many companies, a basic
self-service support elements—knowledgebase access, online
training, various downloads, and perhaps some diagnostic tools—are
completely free to the public at large. For other companies, access
to any kind of support is restricted to paying customers. And still
others bundle support with software-as-a-service subscriptions, or
give away professional services and training as part of maintenance
contracts, or sell support and upgrades separately.
This diversity of approaches creates real problems for anyone who
wants to identify basic market trends. What’s the most common approach
to support for obsolete products? How often do companies give
maintenance customers a named account manager? What’s a typical price
delta between basic and premium support plans? Without knowing
something about each company’s basic support business model, any
statistical data about these trends is largely meaningless.
Still, we know that it would be helpful to have at least a general
picture of current industry trends. To get a sense of those trends,
the ASP recently conducted a survey that asked support managers to
describe the business model they use to provide post-sale support for
“the majority of your customers.” In addition, we asked open-ended
questions about their plans “for increasing your current fee-based
support revenues” and “for making your current programs more
attractive to customers.” Finally, we asked for the “approximate
price of your best-selling product or configuration.”
As we expected, a fair number of our survey respondents didn’t fit
perfectly into the business model categories we suggested.
Nevertheless, we found that the categories did define important
differences in priorities and concerns. For instance, we found a great
deal of concern about pricing and margin pressure among respondents
who say they offer “one standard maintenance plan, customized for
individual accounts”—and remarkably little urgency about pricing
among respondents who offer more configurations and add-ons (instead,
a common concern for this group is finding ways to grow total revenues,
not to defend prices). This observation doesn’t qualify as a solid
statistical trend, of course, but it certainly suggests that there’s
a connection between business models and some key industry trends.
This report summarizes the results of the survey and what our
respondents told us about their fee-based support plans in the
In addition, the report analyzes the relative popularity of these
models in terms of each company's product prices and includes
discussions of related topics:
- "Mostly Free"
- "One Standard Plan"
- "Multi-Level Maintenance"
- "Basic Plus Add-ons"
- "Segment-Specific Plans"
- "Software as a Service"
- "The Product Price Variable"
- "How to Collect Better Customer Feedback"
- "Pruning the Plan"
- "How to Migrate from Free to Fee-Based Support"
- "What Does Your Support Plan Cost to Deliver?"
Copies of the survey are free to ASP members in the
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