How low can you go? ISM beats drum for transparency on cost of software license renewals, updates and technical support

How low can you go? ISM beats the drum for transparency on the cost of software license renewals, updates and technical support How low can you go? ISM beats the drum for transparency on the cost of software license renewals, updates and technical support Having been awarded a framework contract in 2014 from the UK government, with one of the reasons cited as they have low revenue costs as there are no ongoing licence fees and low technical support costs, PSIM pioneers ISM are beating the drum for transparency in the lifecycle costs – so clients are aware up front of what they will be expected to pay from their capital and revenue budgets. Explaining the flaws in the current pricing model, Stephen Smith, Managing Director said: “We made the decision in the early months of founding ISM that we would not put clients in the unenviable position of budgeting for a capital expenditure only to find a raft of renewal and licencing costs that would have to be met from their revenue budget. What we have found in recent years is that clients are unaware of an all too common practice; namely a business will charge what on the face of it seems to be a competitive capital cost for the PSIM, only to then charge a fee of 18% to 50% per annum of the cost of the software for the renewal of the licence, system updates and technical support. ISM typically charges an annual fee of less than 1% of the initial cost of our Genesys software. This includes 24 7 technical support and system updates. I recently came across a business charging nearly £27,000 a year for the renewal of their software licence with no level of technical support. This was in addition to the software cost of £148,000. A number of clients have recently taken the decision to have their security control room management software ripped out in favour of installing Genesys. Why? Enhanced functionality aside, some instance show that they were being quoted over $500,000 a year alone for licensing and software support.” Smith offers the following advice for evaluating the total cost of ownership of your PSIM and not just the initial capital cost: Ensure the companies pitching state in writing their annual fees for the renewal of your licence and, if technical support is provided, what it entails and what it costs over a 5 year period. Will you be expected to pay for system updates too and if so, how frequently will these updates occur and, what are the fees? Is the cost a percentage of the initial capital outlay? Insist that the software will be supported for a minimum of 10 years Sweat the small print pre-contract so you don’t expose yourself to risk that could have a catastrophic impact on your organisation. A small number of software providers build a timer in their software. This automatically shuts the software down if your annual renewal payments have not cleared. Don’t evaluate a project based solely on the initial capital cost. What might appear as a competitive initial cost could actually be the tip of a very big iceberg when you rack up the other additional costs for updates, licence renewal and technical support. Work out the lifetime cost. Don’t discover when you’re too far down the line that the cost of installing the system is, in fact, lower than the ongoing annual costs! Smith said: “We have lost count of the number of red-faced security managers berating a competitor for holding a gun to their head – “pay the ongoing fees or we won’t support your system”. Some public bodies are now having their PSIMS ripped out because they cannot afford to maintain them from revenue budgets. PSIM providers must be 100% transparent and fair or risk going out of business on the back of an army of disgruntled customers.”

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