Is LWSN Re-Investing Your Maintenance Fees?
Phil Simon forwarded this blog post about how software companies are “skimping” on R&D, and are using maintenance revenue streams to finance their on-going operations. You—as the software customer—send the vendor some money each year—some to be used for providing you support, but some of it is expected to be used to further enhance the product.
Just to clarify, I calculated Lawson’s “Return on Maintenance”, based on figures taken from Lawson’s public financial statements:
What this shows is that, yes, Lawson is spending less on R&D—falling from a high of nearly 42% in 2004 down to 23.6% so far this fiscal year. In other words, R&D spending has been cut nearly in half as a percentage of the maintenance fees paid by customers.
Clearly, however, this phenomenon is not just reflective of Lawson, but as this graph from the Abridged Mind blog shows, it appears to be an industry trend:
Graphic Source: http://abridgedmind.blogspot.com/2009/04/broken-promise-of-software-maintenance.html