Documentum Maintenance – 21% and rising….

We received an interesting email from a client last week asking us about Documentum maintenance.  While we have posted articles on smart ways to manage Documentum maintenance contracts, we were somewhat surprised that the inquiry was in response to a maintenance bill, that without any explanation, increased maintenance to 21% from the usual 18%.  The client mentioned that all NEW licenses required a non-negotiable 23% maintenance because “the product is so critical in customer’s environments and this level gives 24 x 7 support”.  For 27%, the client will get a named resource assigned to the account.  This post will discuss our thoughts and present some best practices on how to best manage Documentum maintenance contracts.

Documentum Maintenance – Background

Clients need to understand what maintenance/support does.

1. Standard Support provides assistance with installation and operation of Documentum products and assistance with behavior with product specifications.
2. Maintenance provides customers with updates and upgrades to Documentum products they license.

Support and Maintenance have traditionally cost 18-19% of the purchase price and are billed annually.  If a client doesn’t pay maintenance on a product, the client will not have the ability to upgrade to the newest releases.  In some cases clients will have to either rebuy the software or pay all back-maintenance costs.  Without a maintenance agreement, the client will not be able to access Documentum support for questions and assistance with that product.

Traditionally, Documentum has allowed line items to be dropped from the maintenance contract.  Other vendors, Oracle for one, will sometimes not allow line items to be dropped.

Why increase maintenance costs?

As we have pointed out in previous posts, Documentum’s place within the EMC family is somewhat difficult as they have traditionally been the poorest performing division compared to the spectacular growth seen in other divisions.  Documentum needs to increase revenue and remain profitable.  Increasing maintenance is an easy way to increase revenue and profit as:

• Sales Reps to not get any component of commission on maintenance
• Increased revenue does not translate into any increased cost components for EMC

One could make an argument that if maintenance gets too high, clients will move to a new, cheaper platform.   Where exactly that point is will vary from client to client.

Documentum Maintenance Thoughts

Typically TSG’s response to the maintenance discussion is:

1.  Stop paying maintenance for products you don’t use.  Often additional products like iTeam (anyone remember that?), BPM, CIS, Documentum Client for Outlook or other products are added to a large purchase as extras to allow the client to experiment with those products.  We advise clients that haven’t deployed these solutions after a couple of years to remove those products from the maintenance agreement as the likelihood of deployment is remote.
2. Pay for maintenance for products you use regularly to provide access to support and future upgrades. As we pointed out in our last article on Documentum maintenance, given that Webtop is not being enhanced, requires only minimal support and the licenses applied to other purchases (D2 or XCP notably), we surmised that clients might want to consider dropping Webtop maintenance.

So for our client, we talked about ways to better manage their maintenance contract.   Below are some of our better thoughts.

• Custom Client – In reviewing our purchase of Documentum products, we saw that a custom client is roughly 1/3 the price of the Webtop or the D2 client.  Writing your own custom client or considering open source options, like our HPI, instead of traditional Documentum clients could have a payback of less than two years.   It will also make your sales rep happy and keep them at bay in that the purchase of new software results in a commission where maintenance does not.
• Cache those consumers – Many clients remove consumers from Documentum by caching content out of Documentum for consumers using either Site Caching Services or other tools like our OpenMigrate.  Lots of posts on this topic discuss the benefits besides reduction of licensing and maintenance including business continuity, increased performance, better user performance, less training and ability to support a variety of devices and platforms.
• Consider OpenSource alternatives – besides replacing Webtop, think of the extras that add to maintenance.  Many clients are paying maintenance on annotation, PDF overlay, scanning or other components in the stack that could be replaced with free alternatives.

Summary – Why increase maintenance?   – Because they can.

Bottom line is that maintenance is increasing because it can and clients aren’t leaving.  Documentum has tried to re-energize their existing customers with new products like XCP, D2 and Syncplicity, but most clients aren’t budging and are making due with their existing installation stack.  Documentum, in wanting to drive more revenue and profit, can take advantage of existing customers desire to stay by pushing through higher maintenance percentages without having to add any additional costs or commissions on their side. Some of our thoughts as to why clients aren’t leaving include:

• Migration Cost – moving to a new platform is expensive, time consuming and risky.  The cost and effort easily outweighs the increase in maintenance costs.
• SharePoint Alternative – we have seen SharePoint fading as a replacement for Documentum.   Whether this is due to functionality or positioning (SharePoint is more for collaboration, Documentum is more for document management and records), many clients no longer consider SharePoint a realistic Documentum alternative.

We still see Alfresco as the only a realistic alternative and have a couple of clients that are pursuing this option.  Alfresco has the benefit of a “maintenance only”  CPU based license (no purchase price), so the the payback period would actually be less than a year for equal capabilities.  We are updating our Web Series from 2010 on Migrating from Documentum to Alfresco this fall.

If you have other experiences or thoughts on Documentum maintenance, please comment below.