Aberdeen ERP TCO Midsize_July 2007

Research shows the average cost of three years of

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Unformatted text preview: three years of maintenance drop in the $250 to $500 million range, even though the average number of users grew by 76%. This resulted from a drop in the average maintenance rate. The cost of maintenance is typically calculated as a percentage of software license fees. Aberdeen asked survey respondents for actual software costs and the percentage of software license fees spent on maintenance each year. Note that Aberdeen applied this percentage to the software cost in the calculation of maintenance costs. However, the method actually used by vendors to calculate maintenance does vary. Some will apply the percentage to the actual cost of the software (which may have been discounted) and some will apply it to the current list price of the software. In this latter case, users will actually pay more than the average Aberdeen used in its calculations. Costs per User As the costs per installation rises as company size grows, one would also expect the average software costs per user to go down, since volume discounts are standard fare in ERP pricing and licensing. This too was observed, but only in s...
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