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Compare maintenance charges to determine long-term costs

Library Systems Newsletter [September 2000]

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Libraries evaluating proposals from vendors usually make a careful comparison of the purchase prices, adjusting for missing or underconfigured components. But many do not look equally critically at the maintenance rates. Significant differences exist among maintenance rates. Vendors charge as little as 10% per year of the undiscounted purchase price of hardware and software for maintenance, and as much as 15% per year.

Vendors also differ in the amount of annual increase in maintenance rates they are willing to guarantee. One vendor often commits to holding the maintenance rate flat for five years, several accept a 5% per year cap on increases, one insists on 8%, one seeks 10%, and another accepts 5% on software but insists on no cap on increases in hardware maintenance rates.

By the time a library has paid four years of maintenance to a vendor that has pegged its rate at 15% of the undiscounted purchase price each year, plus increases of 8% per year, the annual maintenance rate has increased to well over 20% of the undiscounted purchase for year five.

If you add the purchase price plus five years of maintenance, the “five year cost” comparison among vendors may come out differently from a comparison based on purchase price alone.

Make sure the scope of the maintenance programs is comparable. If a vendor's maintenance program costs 30% more Or less than the average of the programs, look for a significant difference in scope, including hours of support, hours of field-service, components included/excluded, and so on.

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Publication Year:2000
Type of Material:Article
Language English
Published in: Library Systems Newsletter
Publication Info:Volume 20 Number 09
Issue:September 2000
Page(s):67
Publisher:American Library Association
Place of Publication:Chicago, IL
Notes:Howard S. White, Editor-in-Chief; Richard W. Boss, Contributing Editor
Subject: Library automation -- cost issues
Library automation systems -- maintenance
ISSN:0277-0288
Record Number:8115
Last Update:2022-08-06 19:19:36
Date Created:0000-00-00 00:00:00
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