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Third-Party Support: A New Dawn for Enterprise Software
How Third-Party Providers Give CIOs a New Option - From Cost Savings to Strategic Choice: Rethinking Enterprise Software Support
Key Highlights:
- Third-party support market shifts amid vendor consolidation, cloud push.
- Recent Software acquisitions create new opportunities for alternative support.
- Legacy software users seek options to avoid forced upgrades and subscription models.
- Spinnaker Support and others capitalize on market disruption for enterprise software behemoths.
Analyst Take
I recently spoke with Iain Saunderson, the CTO of Spinnaker Support, a company that provides third-party support for enterprise software. The conversation was particularly insightful as it focused on the current state of the market for legacy software support, specifically in light of recent industry shifts. My perspective is that we are witnessing a genuine acceleration in the adoption of third-party support services, while also seeing innovation and new models from the vendors involved. The traditional model of vendor-provided maintenance is being challenged on multiple fronts.
In the past, many companies using enterprise software have faced challenges with vendor relationships. Their support and maintenance contracts were often tied to a product roadmap that didn't always align with their specific business needs. This sometimes led to companies paying substantial fees, which could increase annually, for support on systems that were already stable. This situation often created pressure to upgrade to newer versions or migrate to cloud platforms, a cycle that some users found challenging to manage.
As an alternative, a third-party support market has emerged, with companies like Spinnaker Support offering a different approach. They provide a tailored support approach for legacy and functionally stable on-premise systems at a lower cost, saving often fifty percent OR MORE of the original vendor fees. This model, when used appropriately, can give businesses more financial flexibility and greater control over their own digital transformation timelines. This alternative has been gaining steady momentum as a compelling value proposition.
As vendors move to as-a-Service models with cloud consumption models or a subscription-only model, the restructuring of support has left many enterprises feeling unsettled, especially for legacy systems. Many enterprises are now facing what they perceive as a substantial and non-negotiable increase in their costs, coupled with the loss of their perpetual licenses. It’s an almost perfect scenario for third-party support providers to operate. Spinnaker Support, for example, has moved quickly to expand its offerings of late. This is a brilliant and opportunistic move. They are directly addressing a very real pain point for a large customer base that is actively looking for alternatives. It is not just about cost savings anymore. For many of these organizations, it is about maintaining business continuity and avoiding a disruptive and costly transition they do not want to make right now.
What's particularly interesting is how this plays into the broader trend of IT departments seeking greater control over their technology stack. The idea of being forced into a vendor’s predetermined roadmap is becoming less and less palatable. The rise of the third-party support market is a direct reflection of this desire for autonomy. Companies want to decide when and how they migrate to the cloud or adopt new technologies. They don't want to be strong-armed by their software vendors.
This is a market shift that goes beyond a single vendor or acquisition. It is about the evolving relationship between software vendors and their customers. The traditional model of a vendor being both the product creator and the sole support provider is being unbundled. This trend is not new, but events in the market of late certainly bring it into sharp relief. I think we will see more companies start to re-evaluate their support contracts with large vendors. The awareness of viable alternatives is growing. The success of companies like Spinnaker Support will likely serve as a proof point for others to consider a similar path with their enterprise software. It is a market that is going to continue to grow. It is a significant shift in enterprise IT strategy.
Looking Ahead
The key trend that I am going to be tracking is the ripple effect of third-party support on the broader enterprise software market. The level of customer frustration is a powerful motivator for change, and it is a wake-up call for every large vendor. The recent moves from Spinnaker Support, are clear signals that the third-party support market is ready and able to capitalize on this disruption. I believe the rise of third-party support providers will put pressure on other vendors, and this is a good thing for customers. TL;DR competition drives innovation.
While I still have reservations about security and patching, I was impressed by the comprehensive answers that Saunderson gave on the topic. I need to understand more about the model Spinnaker Support is using, and enterprises considering this approach will do well to linger on this topic. Going into the call, I had genuine concerns around security patches, but I came away with a neutral perspective from our discussion. I would certainly not advise enterprises exploring this option based on security concerns. What was clear is that for functionally stable systems where the environment is not rapidly evolving, third-party support is a viable option worthy of consideration.
When you look at the market as a whole, it is showing other third-party support companies a clear path to market share. The key takeaway for any CIO is to recognize that they have more options than they may have realized. They do not have to accept a vendor's roadmap as the only path forward. The success of companies like Spinnaker Support is predicated on this very idea: giving businesses the power of choice. Going forward, I am going to be tracking how the company performs in the future, specifically in the company's recently announced offerings. The real test will be if they can convince customers from other ecosystems that their model of flexibility and cost savings is a sustainable and strategic choice, despite security concerns around patching - time will tell.
Steven Dickens | CEO HyperFRAME Research
Regarded as a luminary at the intersection of technology and business transformation, Steven Dickens is the CEO and Principal Analyst at HyperFRAME Research.
Ranked consistently among the Top 10 Analysts by AR Insights and a contributor to Forbes, Steven's expert perspectives are sought after by tier one media outlets such as The Wall Street Journal and CNBC, and he is a regular on TV networks including the Schwab Network and Bloomberg.