Why Early Software Renewal Is Valuable to Your Business
Your business depends on software to perform several important functions, both internally and client-facing. Even though renewing software licenses is a critical part of software maintenance, many businesses choose to skip software renewals.
While this can save money upfront, it can also create significant headaches and problems that can quickly become expensive to fix. In the worst-case scenario, it can lead to diminishing customer confidence — which, in turn, results in lost customers.
One of the best examples of this is the Equifax security breach of 2017. Although the company was, by all reports, aware of security weaknesses in its outdated software, it didn’t respond quickly to the problem. The failure to update its software opened the door to a breach that exposed the personal data of approximately 147 million people and ultimately ended up costing the company $1.4 billion overall.
While not all breaches are that dramatic or costly, the Equifax incident drives home an important fact: Skipping software renewals and upgrades is a dangerous practice, and it can end up costing you more in the long run.
Why Should I Renew My Software?
The software you buy generally has a one-year subscription, although in some cases it may be for two or three years. When that subscription expires, the only way to maintain coverage of that software is to renew your subscription. But why is that so important? There are three main reasons you should keep your software renewals current:
1. Ongoing Support. Subscription renewals ensure that you are fully supported and will get the latest software updates as needed. If a bug for your software gets fixed, the only way you’ll have access to it is if your subscription is up to date. And, when you fail to renew your software subscription, you’re losing everything that goes along with it. For example, If you don’t renew Office 365 software, you won’t have access to your productivity tools.
2. Cost. If you fail to renew your software before the subscription ends, but then decide to do it later, it will end up costing you. Reinstatement fees can range from 10 to 30% of the cost of the software, depending on the software and the company. Renewing it before it expires is simply the right business decision for your bottom line. And, if you know it’s inevitable that you’ll renew it, why wait?
3. Security. Yes, we’re bringing that up again. Why? Because it’s one of the most critical reasons to keep your software current. An updated subscription can help you avoid exposure to security threats, and you’ll get essential security patches as they are released. As Equifax and others have proven, gambling with security is a bet that most businesses cannot afford to lose. A 2019 report shows that the average cost of a data breach has risen 12% over the past five years. Now, the average cost per breached record in the U.S. is $242, and the average cost of a data breach is $8.19 million. Regardless of how those numbers break down for your business, it’s a cost that no company wants.
Why Businesses Fail to Renew Software
There are several reasons why business decision-makers don’t renew their software subscriptions. Three of the most common reasons are:
1. You are no longer using (or are about to discontinue using) the hardware. If you are about to decommission a server that is running VMware software, for example, and your software subscription is up for renewal, chances are that you won’t want to invest in a subscription that you either aren’t currently using or won’t use much longer.
2. You’re considering changing your solutions. Maybe you are looking at new antivirus options and you don’t want to spend money for the same type of product twice. This can be a big deterrent to renewing a current subscription.
3. The product is not widely used or you don’t see much value in it.
While each of these can be valid reasons for not renewing a software subscription, those decisions should be considered long before the subscription expires. That allows you to make well-thought-out choices so you’re not left with unprotected or unsupported software.
Why You Should Renew Your Software Subscription Sooner Rather Than Later
Business owners, managers and consultants are busier than ever today, and that can sometimes lead to accidentally letting a subscription lapse. To avoid having to pay extra charges, losing support or putting the security of your data at risk, begin thinking about software subscription renewals before they’re due. Reviewing subscriptions 90 days before they end will give you adequate time to decide if you want to continue with that software, and, if not, you’ll have time to investigate other software options to find one that’s best suited to your needs.
If you choose not to renew your software subscription, make sure you have alternative software in place before your subscription lapses. It’s also advisable to talk to all parties who use the current software and make sure that they won’t lose any essential functionality by switching to a different software program.
In some cases, you may choose not to renew because you’re upgrading your current equipment or are considering working with a managed service provider to move to the cloud. Knowing future plans for the company will help you determine whether or not the software should be renewed.