1. Support and Maintenance Obligations

Vendors look upon "maintenance and support services" as an exceptionally profitable revenue stream. Generally, maintenance and support services will consist of telephone support and the delivery of software updates, releases, and versions, but in many instances these "services" are extremely limited, with additional charges for services not included in the basic package. It is important that the licensee clearly define and understand what levels of support it needs and how much it will be charged for that expected level. Otherwise, costs will escalate dramatically from original estimates.

If the software will be providing a critical function, the vendor's required response time for various levels of failures (e.g., critical, major and minor) should be specifically set forth in the support agreement. A remedy (other than breach of contract) should be included to insure vendor's compliance with the agreed upon service levels. For example, a credit issued to licensee for each half-hour or hour that the vendor is late in responding to a critical or major failure.

The licensee should avoid vendor language that requires the licensee to immediately implement all new versions of the software. The licensee may need time to install the new version of the software on a test platform to ensure it operates properly or, more likely, the licensee may desire to delay implementation of a new version until a more convenient time (e.g., it may have received the new version at the end of a quarter when any interruption in system operation would be unacceptable to the licensee).

With respect to upgrades and modifications to the software, depending on the nature and use of the software, it may be important for the licensee to have the right to test any upgrades before installation and implementation, and the right to reject upgrades. In such an event, the vendor should be committed to continue to support the prior version of the software.

Questions to ask when evaluating a vendor's support program include: What is included in the support program? What are the vendor's normal hours of support? Does the vendor provide unlimited telephone support? 24X7 support? On site support within two hours when requested? Unlimited user access to support or will only specified users have access to support? Does the vendor provide online discussion forums, FAQs, and other support tools?

Example Revision:

3.1 General Obligations. Subject to Customer's payment of the annual support fees set forth in Exhibit A, Vendor will provide Customer with reasonable telephone support regarding use and operation of the Licensed Software during the hours of 8:00 a.m. to 6:00 p.m. PST, excluding nationally recognized holidays ~~Vendor's normal hours of support~~. Only the current version of the software and immediately preceding version will be supported. Customer must install all new versions of the Licensed Software within six (6) months ~~thirty (30) days~~ of receipt. Vendor reserves the right to charge Customer for support issues that ~~could have been resolved by reference to the Documentation~~ ^[1] or arise from the Customer's failure to use the ~~negligence, misuse of the~~ Licensed Software as permitted under this Agreement, and issues relating to third party equipment and software that are not provided or authorized by Vendor. Vendor shall obtain Customer's prior authorization before incurring any such charges. Vendor will provide Customer with any new versions of the Licensed Software that Vendor in its sole discretion makes available to its other licensees at no charge.

^[1]Requiring the licensee to pay for support calls because the call could have been avoided if the licensee had more closely read the vendor's documentation is unreasonable and unacceptable. These types of calls are to be expected. If they become excess, the parties should meet and confer regarding a solution, but the licensee should not be automatically charged for such calls.