An edited version of this column appeared in Business Week on August 18, 2009

Meir M. “Manny” Lehman did something very.  Very bad.

Oh sure, he may seem like a nice old man.  And he may seem all smart and stuff too.  Over the course of his fifty year career, he’s worked for the Israeli Ministry of Defense and IBM.  He was also the Head of the Computing Department at London’s Imperial College of Science and Technology and then a professor at Middlesex University.   But his research led to bad, bad things.

It all began in the 1960’s, when he predicted that changes in software were inevitable and brought on by user requests for more features and functionality.  And these changes, he argued, were not because of bugs or poor programming.  Why was this so bad?  Because Lehman’s research gave software vendors around the globe the green light to justify their basis for charging annual maintenance fees to their unsuspecting customers.  And businesses, both large and small, have been paying the price ever since.

Oh curse you Manny Lehman!  You are my nemesis!  May your children and grandchildren be stuck using Windows Vista for their lifetimes!

Years later, we are now forced to pay an additional 18-30% of our software costs towards an annual maintenance fee and then we’re expected to renew this contract each year.  And because of your research, software vendors don’t admit that this annual charge is an extra revenue source that helps them fix bugs in their software that should have been addressed in the beginning.  They tell us that without paying these fees we won’t get new updates, builds and versions (i.e. bug fixes), or technical support (i.e. help fixing problems in their product) or, in some cases, the ability to purchase additional licenses. 

Well Mr. Lehman, the jig is up.  Because for many of my clients, renewing one’s software maintenance contract may not be such a great business decision after all.

Your research may infer that software maintenance and support is an important part of a product’s development.  Maybe so.  But the thing is most of my small business clients who use some of the most popular business software hardly ever go to their vendor for technical support.  The typical stuff they need is training, customization and development – the kinds of services generally NOT included in most software maintenance contracts.  And in the rare instance of a database meltdown (like in the case of an electrical outage or an infrastructure problem) these companies turn to their local partners, or free materials available on the internet for support.  Or they just restore a good copy of their database from backup.

Unless there’s a significant bug that’s fixed, many small business owners I know don’t see the value in renewing their maintenance just to get new versions of their software.  Oftentimes we see new products shoved out the door by software vendors anxious to prove that they’re doing something to justify their maintenance fees.  And these products contain little more than cosmetic changes or window dressing. 

Some software vendors have abused your research, Mr. Lehman.  They sneakily re-label updated versions of their products and call them “new products”.  This way they can keep charging their customers for maintenance on their “existing“ product.  And if the customer wants to buy the “new” product they have to pay an extra fee.  A despicable practice I agree.  I’ve seen it happen. 

Software vendors know that their maintenance plans aren’t worth the annual fees.  So some choose to further tie the noose around their customers’ necks.  They tell these customers that if they’re not current on their maintenance then they will not be able to purchase additional licenses.  Many small businesses reluctantly give in to this extortion scheme for fear that if they continue to grow and need to add more users their software vendor will levy on them excessive “reinstatement charges” before they’re even allowed to purchase another license or two.  Do you see the evil that your research has unleashed, Mr. Lehman? 

Luckily, small business owners are resourceful.  Many have found ways to fight these maintenance fees.    

For example, some of my clients who are certain that they’ll be needing more user licenses in the future just buy them at the onset.  That way they can let their maintenance lapse in a year but they’ve got their license numbers already in the system so they can add users.  Other clients try to pick up black market licenses on the internet.  Some use other corporate names or entities to purchase new licenses and then just tack them onto their existing systems.  I’m not saying I recommend any of these tactics, as some may feel they cross an ethical line.  But then again in the world of software vendors charging fees for non-existent services, one may argue exactly where that line is drawn. 

Other business owners tend to be more wily in their negotiations.  They let their maintenance lapse and then wait until the software vendors begin offering their inevitable “we want you back” campaigns.  These are as predictable as the bugs in their products.  Vendors look at all their customers that haven’t renewed their contracts, then come up with schemes to get them back in the fold without upsetting all of their other customers who, like two-thirds of my own clients, have been dutifully paying their annual fees.  These schemes involve waiving reinstatement fees, offering discounts on new licenses when maintenance is renewed and other little tricks to kick start a new revenue stream. 

Another way I’ve seen customers get a deal on maintenance is to let their current maintenance lapse, wait for a discount offered and then offer to pay for more than one year of maintenance in advance.  Vendors love a revenue stream but they love cash in the bank even more.  And to that end, business owners who have the means to pay for two or three years of their maintenance all in one go can negotiate significant discounts and cut down on these fees.

For such a respected academic Mr. Lehman, your research has brought about bad, bad consequences.  OK, I take back the curse on your children and grandchildren being stuck using Windows Vista for their lifetimes.  That was way too harsh.  I know your theories about software evolution have little to do with how software companies take advantage of their customers.  But it was because of your groundbreaking ideas that the practice of charging for software maintenance really took off.  And for that I’ll never forgive you, sir!