MAINTENANCE KEEPS MIDMARKET WORLD GOING
Where would the software industry be without maintenance income? In 2009, it was the difference between a very tough year and unmitigated disaster as maintenance was the one source of revenue that went up when other streams went down. (Is there such a thing as a mitigated disaster?) And I think the importance of maintenance and support for midmarket companies represents one of the challenges of moving from the software license and maintenance combination for producing revenue to the subscription model for paying for Internet-based products.
Look at the evidence: In its December quarter, Deltek saw a nearly 24-percent-drop in license revenue while maintenance and support income rose by 8.5 percent and the category represented 47.3 percent of Deltek's total revenue for the three months. Blackbaud produced similar results for its December reporting period with license revenue off by 29.3 percent but maintenance income rising by 8.5 percent. Maintenance comprised 37.6 percent of Blackbaud's revenue for the period. One difference between Blackbaud and other companies is its fast-growing subscription revenue which came in at 23.5 percent of the total. Epicor saw a 20.2-percent decrease in license revenue for 2009. And while maintenance was off by 1.3 percent the company, which draws more business from overseas than Deltek or Blackbaud, said the strengthening dollar contributed to the drop. Last modified on Sunday, 16 June 2013