Friday, Mar 19 2010
News and Analysis
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
Bob Scott has been informing and entertaining the mid-market financial software community with his email newsletters for 10 years. And he has been covering this market through print publications for 18 years, first as technology editor of Accounting Today and then as the Editor of Accounting Technology from 1997 through 2009. He has covered the traditional tax and accounting profession during the same time and continues to address that as executive editor of the Progressive Accountant.