Organizations can cut software costs in half with third-party support • The Register

According to research institute Gartner, companies can halve the costs of maintaining aging business software by judiciously using third-party providers.

The analyst said tech buyers should look for viable maintenance alternatives to vendor support for IBM, Microsoft, Oracle and SAP software instances.

Financial disruptions from COVID-19, the Russian invasion of Ukraine, inflationary headwinds and the prospect of a global recession have accelerated the adoption of third-party software support for technologies provided by these “megavendors,” Gartner said.

It turns out they accounted for 45 percent of all technology deals closed in North America, EMEA and APAC in 2021, up from 27 percent last year.

“In organizations with significant software portfolios from megavendors, software support from cheaper third-party vendors can offset a significant percentage of the yearly annual maintenance and support increases typically imposed by those software vendors,” a Gartner research note said.

Third-party support offers organizations a way to extend the life of existing enterprise software investments when they see no technical or business reason to upgrade. For example, The Oracle 12.1 database was removed from mainstream support in Julyleaving users with the prospect of upgrading to 19c or finding a way to support their existing systems.

“When third-party support is a viable alternative, the significant opportunity to reduce software maintenance and support costs can be a ‘quick win’. It can help keep budgets low by eliminating the ongoing annual increases in maintenance and support from software vendors. “Organizations are challenged to meet cost-saving goals and initiatives,” said Gartner.

Despite the market growth, Gartner found that there was still plenty of room to continue leveraging third-party support. Adoption has been driven by cloud migrations – essentially to keep the megavendor software portfolio running with perpetual software licenses until the transition is complete.

The same reasoning applies to migrating to alternative vendors or solutions. In the event of end-of-support announcements, legacy software can continue to be used to support specific applications through a third-party provider — not only could this reduce costs by 50 percent compared to the current software vendor’s standard maintenance, but it also avoids highly customized tariffs for professional services that software vendors would normally charge.

Gartner noted that organizations can “take advantage of the significant operational cost savings and value-added services that the third-party market offers,” which can help reduce software budgets, particularly software maintenance gains and losses. It also increases flexibility as third parties tend to offer a wider range of contractual arrangements and may offer better access to expertise.

Alui, Rimini Street, Spinnaker Support, Support Revolution, and US Cloud make up the sample of the third-party support market examined by the study. ® Organizations can cut software costs in half with third-party support • The Register

Laura Coffey

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