Slashing IT maintenance budgets: Sign of the times

In a down economy, some shops are cutting where it really counts -- maintenance -- and are hoping for the best

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Going forward

The engineer's guess is that in the future, killing maintenance on software won't happen as much inside his sporting-goods company. "Vendors have been lobbying us really hard" to reinstitute the maintenance contracts, "giving us discounts, and are starting to soften policies and prices to try to get us back." In the future, maintenance contracts will once again become the norm in his company as new gear is purchased, he believes. "For the old stuff that's already in place, [though,] I don't see it coming back."

At the same time, there's a bad precedent for IT departments in getting adequate performance out of a lowered budget, Whitehouse said. "Companies don't want to show they can do the same with less because they'll get less next year." The biggest risk is not ever getting back to the pre-cut levels.

Burton Group's Santos said he's also seen changes driven by the tough economy in server virtualization popularity, "since consolidation of servers directly impacts hardware maintenance costs, as well as floor space and energy costs. That has been a very positive trend."

Another thing Santos expects to see are on-the-fly price cuts for maintenance contracts as companies reduce workers and seek corresponding reductions in the IT licenses and services they are buying now. As workers are added again, contracts can quickly be readjusted upward to cover new users, he said.

Even with the dramatic cutbacks needed to cope with the economic climate, however, there might be a silver lining, Santos says.

"Some companies are probably overcutting -- they're going to lose staff, they're going to lose the commitment from their vendors," Santos said. "There's no question about that. But I think the large majority are doing the right thing and doing what they should have been doing in the good times. From 2003 to 2006, when times were easier, they were not being as observant and conservative. They should have paid more attention."

Todd R. Weiss is an award-winning technology journalist who wrote for Computerworld.com from 2000 through 2008. He's now a freelance writer, covering technology news, cool tech gear, open source and more. Follow him on Twitter at http://www.twitter.com/TechManTalking.

Copyright © 2009 IDG Communications, Inc.

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