Tuesday, December 1, 2009

Read the fine print of your software maintenance agreement...AND stay on top of policy changes that occur throughout the term of the agreement.

When times get tough...the real character of an organization shines through...

Somebody within the ECM industry and "in the know" forwarded me this software maintenance policy update from a competitive document capture company. I took out the name of the software company because I don't think it is appropriate here to name names. However, it serves to illustrate the importance of partners and their respective end user customers to READ the fine print of the initial software maintenance agreement and also stay keenly aware of the policy changes that are made during the term of the agreement.

Here is an excerpt of the recent policy changes:

1. There is no more 30 day grace period for maintenance expiration. As soon as the customer reaches their SWA (software assurance agreement) expiration date they will expire and are subject to a reinstatement penalty which is the equivalent of 1 year of their SWA fee. This is in addition to paying their current SWA fee. No changes in expiration dates will occur.

So for example, if a customer expires on 12/31/09 (the customer pays late and we don’t issue a PO until 2/30/10) the customer will now need to pay the existing SWA amount which would have covered the customer from 1/1/2010- 12/31/10 PLUS an additional year of SWA in penalty fees. They will still only get one year of coverage, the expiration date will not change so the customer is in effect paying 2 years for 1 year of coverage.

2. There are no partial renewals allowed. Customers cannot pay quarterly, only annual policies.

3. Finally, there is no refunds in maintenance if a customer partway through their SWA agreement decides to switch products. SWA is prepaid, and non-refundable regardless if the customer is using it or not.

In summary, when economic times get tough, you quickly come to learn who your real "business partners" are. Does the Latin phrase: Caveat Emptor come to mind?

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