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Software maintenance costs: Tips for keeping costs low and quality high

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maintenance costs

Table of Contents

Impact of poor maintenance
On-premises vs. in-cloud maintenance costs
State of the software maintenance market in 2024
How maintenance affects user satisfaction
Types of software maintenance
Security maintenance costs
Software maintenance cost estimation
Latest trends in software maintenance
Factors influencing maintenance costs

On the way to a winning software solution, there’s a phase that deserves to step into the spotlight and yet is too often overlooked — software maintenance. This crucial process involves improving and refining software to meet users’ ever-evolving needs.

Whether adding new features, fixing bugs, or boosting performance, maintenance is vital for keeping systems up-to-date, functional, and competitive. By addressing both immediate needs and future requirements, this initiative empowers software to remain relevant and move in lockstep with today's fast-paced digital world.

Without diligent maintenance, your software gets a direct ticket into obsolescence, becoming essentially useless over time. This is a given, whether you want it or not. Therefore, factoring in software maintenance costs right from the start is key to ensuring the longevity and value of any project.

The detrimental effect of poor maintenance, in numbers

Taking software upkeep seriously and managing its costs extend beyond a mere technical necessity to a strategic business imperative. In 2022, the amount of money spent on subpar-quality software in the US ballooned to at least $2.41 trillion, with technical debt (TD) alone reaching around $1.52 trillion.

The magnitude of these figures can be chalked up not only to the direct consequences of bad-quality systems, but also to the hidden parts of the icebergs beneath the surface of software maintenance.

On a visible level, businesses grapple with rising warranty claims, liability expenses, and customer service hurdles. Indirectly, the repercussions are no less significant, affecting a company's reputation, productivity, and bottom line. The good news is that organizations can proactively manage these costs by ensuring their software remains robust, efficient, and economically viable. To that end, adequate software maintenance is synonymous with safeguarding business sustainability and competitive advantage.

The financial toll of data breaches

Global data breach origins according to IBM:
5%

System error – 5% of all incidents, averaging $3.96M

6%

Known unpatched vulnerability – 6% of all incidents, averaging $4.17M

11%

Unknown (zero-day) vulnerability – 11% of all incidents, averaging $4.45M

71%

of senior-level professionals and team leads

Average costs of downtime according to Atlassian:

Average for enterprises $2.3K-$9K/minute

 

Average for small businesses $137-$427/minute

When it comes to app maintenance costs, a stitch in time saves. . . well, a lot of money. Companies must face a reality: The costs of addressing avoidable problems far surpass those of regular maintenance. This financial imbalance highlights the inefficiency and resource drain that neglected maintenance can cause.

Through proactive and thorough maintenance, businesses can avoid the high expenses related to later fixes, ensuring their software operates efficiently without incurring significant financial penalties due to neglect or delay. Here are some examples of the financial burden improper maintenance can constitute on companies:

Average costs of downtime by industries according to Pingdom:

Auto
3M/h - 180M/h
Telecom
2M/h
Enterprise
1M/h- 5M/h
Retail
1.1M/h
Healthcare
636k/h
IT
5.6K/m
Manufacturing
260K/h
Media
90K/h
Energy
2.48/h

State of the software maintenance sector in 2024

According to Gartner’s latest forecast, the total global spending on software is anticipated to rise by 12.7% in 2024, reaching $1.02 trillion. However, a key question remains: What portion of this significant financial investment will go toward software maintenance?

Typical software maintenance cost percentage in the project

Pinpointing the exact fraction of the overall software budget dedicated to keeping systems up and running is notoriously difficult. The reason? The complexity and operational setting of software systems can vary significantly, consuming anywhere between 40% to 90% of total software expenses.

According to O'Reilly's 60/60 rule, 60% of a software product's lifecycle expenses go toward maintenance. Notably, of this software maintenance cost percentage, an impressive 60% focuses on enhancements rather than just bug fixing. This strategy is not just about maintenance; it's about forward movement, making sure software doesn't just remain operational, but continues to evolve and remain relevant in the ever-changing digital landscape.

Still, when attempting to find a universal benchmark for software maintenance costs, it’s easy to hit a snag. The landscape is as varied as it is vast, with no universally accepted standard. Software complexity and maintenance costs vary widely across research studies, underscoring the unique nature of software maintenance shaped by specific needs and environments.

Software upkeep expense ratios across studies

1.0
75%

According to Daniel D. Gallorath, 2022

75%

According to Daniel D. Gallorath, 2022

2.0
67%
67%
3.0
>80%
>80%
4.0
>90%

According to Erlikh, 2015

>90%

According to Erlikh, 2015

Types of software maintenance

When taking care of software health, businesses juggle various tasks to maintain stable performance, relevance, and user satisfaction. These tasks are categorized into corrective, adaptive, perfective, and preventive maintenance, each influencing the total development costs.

Corrective maintenance

Focuses on identifying and fixing defects or errors and typically makes up around 20% of average software support costs. By addressing issues as they arise, it ensures the reliability and functionality of the system.

Adaptive maintenance

Eats up 50% of maintenance budgets and deals with modifying the software to accommodate changes in its operating environment, such as updates in interconnected systems. It's essential for keeping the software compatible in a changing tech landscape.

Perfective maintenance

Enhances software features and performance, constituting roughly 25% of maintenance spending. This forward-looking approach enhances the user experience and increases the software's market relevance.

Preventive maintenance

Though only accounting for 5% of the budget, it’s a critical part of the maintenance strategy, as it helps foresee and address future issues, while optimizing long-term system performance and reliability.

Adaptive
50%
Perfective
25%
Corrective
20%
Preventive
5%

Industry-standard software maintenance cost

So, how much does software maintenance cost? To answer this lingering question, we conducted comprehensive industry research, carefully blending it with Vention’s two-decade experience in building, delivering, and supporting first-rate solutions.

We uncover the software maintenance typical price for each software type, offering stakeholders a ballpark estimate for budgeting the financial side of system maintenance and enhancement.

Software maintenance cost estimation

Total = (Average monthly hours * engineer's hourly rate)

Simple

Complex

Enterprise

Software categories
Average monthly users
Engineering team size (time & materials)
Estimated monthly maintenance cost, USD
Email & communication platforms
1,000
0.5
6,000
Native mobile apps of medium complexity
10,000
1
11,000
Office productivity software
200
0.5
6,000
Web applications with standard functionality
100,000
1
11,000
Software categories
Average monthly users
Maintenance team
Estimated monthly maintenance cost, USD
Project management software
500,000
2
25,000
Customer relationship management
600
2
25,000
Content management systems
300,000
2
25,000
HR management systems
3,000
2
25,000
Infrastructure and platform services
200,000
2
25,000
Software categories
Average monthly users
Maintenance team
Estimated monthly maintenance cost, USD
Financial management and accounting software
2,000,000
4
60,000
Inventory and supply chain management systems
200,000
4
60,000
Enterprise resource planning systems
200,000
4
60,000
Business intelligence and analytics platforms
2,000,000
4
60,000
Custom-built software and system integrations
2,000,000
4
60,000

* The estimates given are not the official rates for Vention's software maintenance services. Costs are evaluated individually for each project, considering the unique needs and goals of our clients.

Factors influencing maintenance costs

Since up to 90% of a software's lifecycle costs can be attributed to maintenance, the burning question on software buyers’ minds is what drives those expenses?

maintenance cost

Software complexity

The complexity of software plays a pivotal role in determining the typical software support costs percent. The complexity of a system — with its elaborate architectures, advanced features, and widespread integrations — directly correlates with the increased resources needed for its maintenance.

Simply put, the complexity of the software elevates the challenges and costs associated with troubleshooting, updates, and maintaining peak performance.

Documentation quality

Often overlooked, the quality of documentation has a considerable impact on maintenance expenses. Detailed, clear, and up-to-date documentation is an actionable guide for maintenance teams, facilitating quicker issue resolution and efficient knowledge sharing. 

High-quality documentation reduces the time spent grasping the system, ultimately contributing to decreased software support costs.

Skills and experience of the development team

According to Raygun, software engineers allocate about 20% of their time fixing bugs that could have been prevented during initial development. Such oversights can have severe consequences, as seen with Toyota, which had to recall 280,000 vehicles due to a software glitch.

Employing seasoned developers who are proficient in best engineering practices and adept at crafting clear, concise code can drastically reduce the necessity for future repairs and updates. Designing systems with an eye toward easy maintenance can lead to lower costs over time.

Technology changes

The ever-evolving world of technology brings both challenges and opportunities when it comes to software upkeep. While adopting new tech can boost efficiency and cut costs in the long run, the flip side is that frequent updates and migrations may lead to temporary spikes in maintenance workload. 

Striking the right balance between embracing technological innovations and managing the costs associated with modernization is crucial for maintaining manageable maintenance expenses.

How to reduce software maintenance costs

Aiming to boost your app's profitability? Then, concentrating on lowering software maintenance costs is essential. Below are several proven strategies to decrease the financial burden of your product, freeing up resources for expansion.

01

Choose effective tools for software maintenance

  • Choose easily maintainable programming languages (like Python and Java) and development tools (think PyLint and StyleCop)

  • Make optimal use of system implementation tools (like CASE)

  • Adhere to industry-specific coding standards and protocols

02

Implement efficient development techniques

  • Design software based on independent modules to simplify and facilitate the maintenance process

  • Follow effective software engineering principles, such as DRY, KISS, and test-driven development.

  • Employ prototyping as part of the software development process

03

Secure skilled software maintenance staff

  • Hire professionals well-acquainted with the project's industry and technologies

  • Ensure the team fully understands the host and target environments

  • Prioritize go-getters ready to navigate through the complexity of the product

  • Select team members capable of analyzing the project and coordinating teamwork effectively

  • Engage professionals with a successful track record in comparable projects

04

Plan for the future

  • Plan for future adaptability and scalability of the software (for example, by leveraging cloud-native technologies and microservices)

  • Execute a comprehensive, data-driven analysis leveraging predictive analytics to assess both immediate and long-term software maintenance needs

  • Implement proactive monitoring and adaptive algorithms to dynamically adjust to changing software environments (possibly by utilizing machine learning models to predict and automatically respond to fluctuations)

In-cloud vs. on-premises maintenance costs

When it comes to estimating software support costs for on-premises compared to cloud-based solutions, recent findings emphasize the economic benefits and hurdles of each approach, illustrating their influence on total cost of ownership (TCO) and operational productivity.

maintenance costs
maintenance costs
  • Companies moving their workloads to the cloud have reported a 30-40% reduction in TCO. This significant decrease is largely attributed to the cloud's scalability, allowing for on-demand resource adjustments. Plus, a cloud-based model enables companies to offload many of their maintenance duties to cloud service providers, who handle updates, security patches, and infrastructure management.

  • Despite these notable cost savings, it's important to note that expenses for cloud infrastructure services saw a 23% spike in 2022, reflecting the growing interest in cloud services and the rising costs associated with managing cloud setups. 

  • Still, 37% of business leaders continue to consider the simplicity of maintenance as a paramount benefit of cloud software usage. This way, the value proposition that cloud computing has to offer extends beyond wallet friendliness.

  • Traditional on-premises solutions demand greater initial infrastructure investments and higher maintenance and update costs compared to cloud alternatives. Given the average monthly price of hosting a back-office setup on premises is around $15,000, it becomes clear why many businesses are leaning towards cloud solutions.

A correlation between user satisfaction and software maintenance costs

Desperation to save money at all costs — the pun partially intended — might backfire manifold. If the logic seems simple, that’s because it is. Putting maintenance on the back burner leads to soaring error rates, causing an uptick in support inquiries, which, in turn, results in escalated operational expenses and user frustration.

Not to mention that around 73% of consumers would instead do business with a competitor after more than one bad experience​​. Conversely, keeping software in good shape and ironing out the kinks in user experience enhances customer satisfaction and brand loyalty.

Customers are nearly twice as likely to buy from a business following a five-star experience compared to an experience of only one or two stars. This highlights the significant influence that software maintenance has on user satisfaction and a company's financial health, strongly advocating for the prioritization of maintenance within the software lifecycle.

maintenance costs

All about the costs of security maintenance

If there’s one thing that worries businesses more than declining profits, it’s issues with data security. A single breach can undermine customer trust, lead to significant financial losses, regulatory fines, and long-term reputational damage.

Hence, a preventative and strategic approach to security maintenance is not just beneficial, but essential. This includes routine system updates, vulnerability scanning, patch management, and threat monitoring.

As 84% of companies grapple with high-risk security holes — half of which could be addressed through basic software updates — the need for strong security upkeep is crystal clear. Furthermore, 60% of data breaches stemming from ignored patches emphasize the dire consequences of sloppy maintenance.

Despite teams investing an average of 130 hours each week in monitoring threats, the costs associated with maintaining software security are significantly lower than those resulting from neglect.

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