One factor often ignored by small business owners is the total cost of ownership of the system they are considering. For example, if company A offers a purchase price of $10,000 and annual support fees of $1,000 and company B offers a purchase price of $7,000 and annual support fees of $3,000 then company A is the better offer on financial terms. A good sales person can pitch against this by focusing on the sale price and ignoring support. However, given the compliance requirements in business today it is vital that software is enhanced – hence the need to consider support fees in the total cost of ownership.
We have won business recently where the combined purchase price and support costs for our software are less over four years than the support costs of incumbent software.
We have not increased our support fees in five years. That will change in 2007 but the increase will be lower than CPI.