The Upgrade Cycle for Software

06xserve_rackMany years ago, when I was actively involved in the development of software (Aegis Development, Inc.), there were several important phases to software development. These included not only the creation of new products, but the retention of an existing/evolving customer base with upgraded versions of software. At the time, we created new customers with new releases, and we ensured ongoing revenue by adding features to existing products.

It was an interesting period (late 1980s), and our use of direct mail, events, and endorsement was probably a bit ahead of its time. Flash forward to 2009, and the cycle is the same, but the necessity is vastly different.

Today, upgrading is not something that is limited to your own evaluation of functionality. It is quickly becoming a component of being efficient, effective, and secure. Today, upgrades often keep a company’s ability to touch their clients, manage their vendors, and keep their marketing and sales people active than ever before. I’ll provide two examples of how this can work, depending on your situation:

Case One: Company A always upgrades

We have a client that is very active with their customer base. They utilize a blog, online tools for research development, opinion, customer satisfaction, and other functions. They upgrade their software roughly every 18 months. In so doing, they are perceived by their clients as investing in the tools they use to communicate, market and sell. To put it another way, the company image always appears to be “fresh” – and most importantly, they rarely find themselves lacking when it comes to sharing data, connecting their sales team with clients, and closing new business.

It also means they are invested and proactive in that investment. They can determine, in advance, what the benefit may be, and how it will affect their ability to sell. Each upgrade has specific purposes, including:

  • Improved performance of software
  • Improved ability to support evolving web trends
  • Reduced cost relative to unexpected maintenance or support
  • Defined return on investment via projected costs
  • Upgrades become a cost of sales, amortized across each closed engagement

These requirements help the company’s management focus on the sales process. Of equal importance, the company is able to more effectively connect using modern tools. And those tools change continually. Web browsers, operating systems, applications, and hardware are all replaced on average every 12 – 15 months. If this company were to miss one upgrade cycle (based on an 18-month upgrade plan), that would put their hardware and software essentially three generations behind the latest releases of mainstream hardware and software.

Case Two: Company B waits until forced to upgrade

Company B is happy with the software they’re using to reach their clients. It was installed in 2005 and it continues to function. The company in fact notes that the quality of the originally installed software is, in part, a reason not to upgrade. At the same time, the company’s ability to reach its clients, support its sales team, and to manage its costs looking forward are being compromised. How is that?

Because the company doesn’t upgrade, they don’t have built-in tools for mobile page support, so there is no mobile browser detection when someone tries to access a web page via a PDA or mobile phone. Because of the age of their software, integration of the latest version of Flash, Java, and other technologies is more complex, as the older software cannot support newer tools. And, as marketing departments ask for these new technologies, the company has a growing in-house “request list” that is not being addressed, creating some degree of confusion and frustration.

And finally, maintenance is more expensive, as older hardware and software (interacting) often develop hiccups. As an example, this company’s website did not crash once in year one, crashed six times in year two, crashed 97 times in year three, etc. Because the company invested in a maintenance Agreement, the downtime was resolved behind the scenes and their customers continued to experience a running website (thank you to our engineers!).

Most importantly, the system crashes encountered have been directly related to the growth in the company’s business and traffic to their websites, online software applications, etc. The load on their infrastructure is such that at some point, the system will run home to mama. The company says when that happens, they’ll upgrade.

Why Upgrade if Everything is Working?

There’s no point to upgrade something just because there is a new version. At the same time, it’s important to evaluate the purpose and outcome of any upgrade. As an example, I purchased one of the first generation iPhone devices from Apple. Because the phone supports software upgrades, I have been able to keep up-to-date with bug fixes, and upgrades that I choose to acquire. When the second generation of iPhone emerged, it offered a few key improvements, notably 3G support. But, my phone was working, and the cost vs. return on investment (hardware), was to me, unwarranted. Now, nine months later, I am stuck – my phone is not fast enough to do some of the work my peers are doing. The upgrades I’m downloading struuggle to perform, based on the hardware in my mobile device. And, I cannot justify investing in a new iPhone (v2) today (March 2009), because there will be a completely new v3 iPhone released this summer (est. July 2009). I will be at the head of the queue to pick up a new phone.

Upgrade When Your Business Will Benefit

The point of my own situation shouldn’t be missed: My phone was working, so I chose not to upgrade. The result of that decision was that I saved some money (always good), but am now a full generation behind relative to the ability to use my phone for business purposes.

In this case, the decision to delay was probably appropriate. There’s no need to make a change for the sake of change. But, the key issue is that in a single year, the industry has leapfrogged what my device can properly manage, and I’m missing functionality my competitors are using.

If I were dealing with a web application, or a database, or something more central to my business, I believe the decision would then have been short-sighted. The current economy requires every business to be as adept as possible at promoting their products, services, and support. Uupgrading is an inexpensive route to efficiency and increased productivity. The key is knowing how any upgrade will benefit your organization, and then taking advantage of that upgrade path to better your business.

One Comment

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