OK, so I sound off on this subject a lot more than once a year, but I couldn’t resist the title. I have often been asked why I am so adamantly opposed to yearly upgrades. There are two main reasons.
The first is a simple a priori: there is not a software company in existence, not even Microsoft, that has the resources to develop stable, worthwhile upgrades yearly. Microsoft, in fact, is notorious for buggy initial releases and new versions. In order to justify a new release, you need to offer “new” features. So existing bugs don’t get fixed and new bugs are introduced. Features that had previously been introduced are not fixed, rounded out or developed to their full potential – so you have an increasing number of half-baked features that were once “new.” To the extent that a firm holds fast to yearly releases, the quality of its software will get buggier and decline. LexisNexis encountered this problem and was forced to skip a year between versions 9 and 10 of Time Matters and then tout TM 10 as primarily a bug fix release (remember the disastrous service release of v. 9.3 which corrupted data in the database?).
This problem hit Gavel and Gown with particular acuity this year. Late in 2009, Compulaw, which makes court rules tracking software, made major changes to the underlying code of its software, with the result that it would no longer work with any existing version of Amicus. So willy nilly, G&G had to rewrite the integration. This obviously impacted seriously on the development of Amicus 2010. The rational thing to do would have been to delay the release of 2010 so that the Compulaw integration could have been fixed (there are a relatively small number of firms that use Compulaw, mainly in California, but those that do depend on it heavily) and other items scheduled for inclusion in 2010 finished. But no, the January 1 release date had to be maintained, so the final release was even more marginal than it otherwise would have been. Things that might otherwise have been fixed will probably now be put off until 2011, because with a yearly development schedule it is almost impossible to do anything but fix the most urgent bugs in between releases. For example, an improvement to the Custom Records function also introduced a new bug in that feature.
In a similar vein, although Time Matters 10 was promoted as a bug fix release, it did manage to break some of the integration with Worldox, even though no changes were supposed to be made to that integration.
The second main reason I object to annual releases is the one that has caused LexisNexis so much grief: clients deeply resent having to pay for “bug fix releases” every year. Annual releases are in effect an effort to “churn” the existing client base and extract more money from them without really offering very much that is worth it. Gavel and Gown would do well to draw the lessons from the public relations disaster Lexis has had with Time Matters and stop trying to imitate the policies that produced it.
Software companies try to disguise this issue by offering Annual Maintenance Plans (or “AMP’s” in Lexis-speak). This gives you the “new” version every year in exchange for a monthly fee. The argument is that then a firm is “always on the latest version” which makes life easier all around. Typically over a 3 year period these plans amount to a 15-20% premium over what a normal firm would spend by having just a tech support and upgrading when the cumulative incremental releases start to add up – about every 3 years or so. In fact, these annual plans are a half-way house on the path toward the Software as a Subscription (SaaS) model.
The fact is that most firms do not want to upgrade every year. The “if it ain’t broke, don’t fix it” mentality is firmly embedded in their consciousness and with good reason. So these plans come across simply as a way of squeezing more money out of clients in return for fixing bugs.
Typical yearly tech support is generally 20% of the purchase price of the product. The yearly maintenance plans tend to run closer to 40% of the purchase price of the product. There are still programs that offer tech support at a traditional rate AND include future upgrades in that support. Worldox and Tabs/Practice Master come to mind in that respect. But perhaps the most interesting example is (or was) PCLaw prior to its acquisition by LexisNexis. PCLaw offered all future upgrades with its reasonable yearly support plans (10-25% of purchase price depending on the number of licenses). AND tech support was a profit center for PCLaw. So all of Lexis’s subsequent increase in prices are either pure profit or represent a dramatic decrease in the efficiency of tech support.
In short, annual releases (1) will inevitably result in buggier software; and (2) are just a blatant attempt to extract more money from a given client base for very little in return.
The first is a simple a priori: there is not a software company in existence, not even Microsoft, that has the resources to develop stable, worthwhile upgrades yearly. Microsoft, in fact, is notorious for buggy initial releases and new versions. In order to justify a new release, you need to offer “new” features. So existing bugs don’t get fixed and new bugs are introduced. Features that had previously been introduced are not fixed, rounded out or developed to their full potential – so you have an increasing number of half-baked features that were once “new.” To the extent that a firm holds fast to yearly releases, the quality of its software will get buggier and decline. LexisNexis encountered this problem and was forced to skip a year between versions 9 and 10 of Time Matters and then tout TM 10 as primarily a bug fix release (remember the disastrous service release of v. 9.3 which corrupted data in the database?).
This problem hit Gavel and Gown with particular acuity this year. Late in 2009, Compulaw, which makes court rules tracking software, made major changes to the underlying code of its software, with the result that it would no longer work with any existing version of Amicus. So willy nilly, G&G had to rewrite the integration. This obviously impacted seriously on the development of Amicus 2010. The rational thing to do would have been to delay the release of 2010 so that the Compulaw integration could have been fixed (there are a relatively small number of firms that use Compulaw, mainly in California, but those that do depend on it heavily) and other items scheduled for inclusion in 2010 finished. But no, the January 1 release date had to be maintained, so the final release was even more marginal than it otherwise would have been. Things that might otherwise have been fixed will probably now be put off until 2011, because with a yearly development schedule it is almost impossible to do anything but fix the most urgent bugs in between releases. For example, an improvement to the Custom Records function also introduced a new bug in that feature.
In a similar vein, although Time Matters 10 was promoted as a bug fix release, it did manage to break some of the integration with Worldox, even though no changes were supposed to be made to that integration.
The second main reason I object to annual releases is the one that has caused LexisNexis so much grief: clients deeply resent having to pay for “bug fix releases” every year. Annual releases are in effect an effort to “churn” the existing client base and extract more money from them without really offering very much that is worth it. Gavel and Gown would do well to draw the lessons from the public relations disaster Lexis has had with Time Matters and stop trying to imitate the policies that produced it.
Software companies try to disguise this issue by offering Annual Maintenance Plans (or “AMP’s” in Lexis-speak). This gives you the “new” version every year in exchange for a monthly fee. The argument is that then a firm is “always on the latest version” which makes life easier all around. Typically over a 3 year period these plans amount to a 15-20% premium over what a normal firm would spend by having just a tech support and upgrading when the cumulative incremental releases start to add up – about every 3 years or so. In fact, these annual plans are a half-way house on the path toward the Software as a Subscription (SaaS) model.
The fact is that most firms do not want to upgrade every year. The “if it ain’t broke, don’t fix it” mentality is firmly embedded in their consciousness and with good reason. So these plans come across simply as a way of squeezing more money out of clients in return for fixing bugs.
Typical yearly tech support is generally 20% of the purchase price of the product. The yearly maintenance plans tend to run closer to 40% of the purchase price of the product. There are still programs that offer tech support at a traditional rate AND include future upgrades in that support. Worldox and Tabs/Practice Master come to mind in that respect. But perhaps the most interesting example is (or was) PCLaw prior to its acquisition by LexisNexis. PCLaw offered all future upgrades with its reasonable yearly support plans (10-25% of purchase price depending on the number of licenses). AND tech support was a profit center for PCLaw. So all of Lexis’s subsequent increase in prices are either pure profit or represent a dramatic decrease in the efficiency of tech support.
In short, annual releases (1) will inevitably result in buggier software; and (2) are just a blatant attempt to extract more money from a given client base for very little in return.
I am not a fan of annual upgrades for two reasons: (1) as a consultant I lose considerable time and money having to keep up with new software, and (2) my clients don't have time to waste upgrading and learning new features, many of which in a mature product they don't need. I also agree with you that it is difficult, at best, for a development team to make meaningful changes to an application in that short of a period of time. That being said, I find your analysis of this and other similar situations often avoids the obvious - if the companies don't do this, how do they stay in business? For example, it is quite easy for you to tell Amicus they should have waited 12 months to upgrade, but I am guessing that as they were trying to make payroll their reality differed from your "the way it should be" world. None of the companies you discuss are or were (prior to acquisition) sitting around living the high life, rolling in the money. If they ignore the financial realities of their business to do what is right in your mind, they will go out of business and their end users will suffer even more.
So, taking the reality of running a business, meeting a payroll, providing technical support to tens of thousands of users, keeping up with the rapid change of technology, etc., let's see your blog article on how exactly you think these companies should operate today and going forward. You've amply proven you can criticize all these companies, now tell us what they should be doing.
Posted by: Tom Rowe | February 02, 2010 at 02:52 PM
For conventionally marketed desktop software, a good frame of reference for the product development life-cycle is 24-30 months.
Anything other than this is most likely not focused on the product or customer satisfaction. With the appropriate vision and financial stability most software companies can attain this objective.
Obviously, the SaaS and hosted software business model presents a much different opportunity.
Posted by: Steve Stockstill | January 30, 2010 at 03:38 PM
You will start to see a lot of CRMs claiming to be a PMS. These firms are moving their products to the legal vertical market because
1) the legal industry is doing better than most in this economy
2) they can't compete with the $5 a month fee HighRise is charging for basically the same features.
If you can live with minimal features you can use Google Apps as well but I wouldn't call either a TRUE PMS of any sort.
Posted by: Frank Rivera | January 22, 2010 at 03:09 PM
I agree. I have a positive suggestion for LN.
When minor changes, i think Timematters 10 could be a debt collection software system.
LN might have to beef up its calculated fields to calculate contingency fee rates.
As an added bonus, LN could link to its skip tracing product - Accurint and allow for downloading and importing new debtor phone numbers for example.
I would also recommend the ability to partially mask Social Security numbers for privacy. Privacy features might give LN a year or two jump on competition in this increasing important field.
I think a jury would agree with Stephen's comment about defective software. It violates contract and deceptive trade practice act laws when it does not work. True bugs (defects) should be fixed for free even if they become evident after the software is bought. Good software should not need a maintenance plan. True upgrades should be fairly priced.
Posted by: Patriot FLA | January 20, 2010 at 12:21 PM
Yearly upgrades are asinine. We're not stupid. You're just cramming it down our throats. And as you allude to, thanks for disguising a "bug fix" as an upgrade. A bug fix isn't an upgrade. It's a bug fix. You pay for it, not me. I already bought the software once. Why buy it again? And, thanks again for mentioning the maintenance agreement. Yes that same maintenance agreement that is supposed to be for upgrades and bug patches like the yearly upgrade or new version that's pretty much the same as the old version. Thanks but no thanks. I haven't been happier since I dumped the whole idea that I should be paying for software. Since I moved to linux (http://www.ubuntu.com/)... which btw came packed with plenty of lawyerly word processing goodies, dropped my old case management system for SaaS (http://gomatters.com) and started storing my docs online (http://www.netdocuments.com/) I haven't paid for an upgrade, bug patch, back scratch or whatever you want to call it.
Posted by: Arty | January 19, 2010 at 02:16 PM
Amen. Been in IT for a while and see this everywhere. I worked for a financial company that hired a new CTO with a dev background. So he came in hired a bunch of developers...fired ummm laid off the entire Q/A team (quality assurance). And then ramped up the development cycle to quarterly releases, with weekly bug fix releases. And as you can imagine the customers (our users) weren't happy with the quality.
So even in cases where money isn't an issue developers/product managers a lot of time will put 'enhancements' ahead of quality work.
I'm currently fighting that battle with a Law software company. We alerted them to several problems with their accounting portion of their software last year and we come around this year to finish it out...imagine my surprise things still aren't fixed. But if i buy the new version the fix is in there. When I asked how long they are supporting the version I'm using they said a couple more years....then why can't I get my version fixed?
Posted by: Stephen | January 19, 2010 at 12:15 PM