Third-Party Support for IBM Software
Introduction
IBM’s Software Subscription & Support (S&S) fees have become a growing burden on IT budgets. Organizations pay approximately 20% of a software’s license cost annually to IBM for support, and these costs often increase each year.
In response, a new option has gained attention: third-party support providers claim they can cut those maintenance fees by 50% or more. The appeal is obvious – dramatic cost savings – but there’s a catch. Read our comprehensive guide, IBM Support & Services Negotiation: Cutting Costs on Support, Cloud, and On-Prem.
Moving to independent support means giving up IBM’s official upgrades and entitlements to new versions. CIOs must weigh the immediate budget relief against the long-term trade-off of losing direct vendor support and enhancements.
What is Third-Party IBM Support?
Third-party IBM support refers to obtaining maintenance and technical assistance for your IBM software from an independent provider, rather than directly from IBM itself.
Companies like Rimini Street, Spinnaker Support, and Origina are key players in this space, specializing in supporting IBM products (from databases and middleware to analytics suites) without the vendor’s involvement.
In practice, you still run your licensed IBM software on-premises as usual – but if an issue arises or you need help, you call your third-party support provider rather than IBM.
These independent support firms typically offer services similar to those provided by IBM’s standard support.
That includes break/fix troubleshooting, 24/7 helpdesk access, bug fixes or workarounds, and advisory guidance on usage and performance. Many staff their teams with former IBM engineers, aiming to provide deep expertise and personalized service.
However, there are important limits to understand. Third-party providers cannot deliver new IBM software versions, feature upgrades, or any proprietary patches released after you leave IBM’s support. In other words, you forfeit your entitlement to future upgrades and updates when you switch.
The third-party will support you on the software version and patches you already have; they may create custom fixes for issues, but they won’t be giving you IBM’s latest code.
Also, third-party support only applies to on-premise, perpetual IBM licenses – you can’t use it for IBM’s cloud services or SaaS products (those come with IBM’s support built-in and can’t be outsourced).
Potential Cost Savings
The primary driver for considering third-party support is cost reduction.
IBM charges approximately 20% of the license price per year for software support and maintenance (S&S) on its software. An independent support vendor typically charges around 10% of the license value per year for similar coverage.
This translates to substantial savings. For example, if you have $2 million worth of IBM software licenses, IBM’s support would cost about $400,000 annually, whereas a third-party provider might charge around $200,000 for the year.
That’s a 50% cut, saving your organization $200k in just one year. Over multiple years, the cumulative savings can be even greater, freeing up significant budget for other projects.
To illustrate the difference clearly, consider the comparison below:
| Cost Aspect | IBM Official Support | Third-Party Support |
|---|---|---|
| Annual fee (% of license cost) | ~20% of license value per year | ~10% of license value per year |
| Annual cost on $2 M in licenses | ~$400,000 per year | ~$200,000 per year |
| New version upgrades | Included (access to all new versions) | Not included (no entitlement to new versions) |
Beyond the pure dollar savings, third-party support can also reduce indirect costs. Organizations often find that once their IBM software is stable and in steady operation, the value they get from IBM’s expensive support diminishes.
You might be paying hefty fees mostly for the “right to upgrade,” even if you don’t actually need any new features.
With an independent support contract, you’re essentially paying half the cost to keep your existing system running reliably. This approach is especially suited for mature, stable systems that meet your needs as they are. If you don’t require frequent updates or new functionality, why continue paying premium prices?
By avoiding unnecessary upgrades, you also avoid the project costs and disruptions those upgrades entail.
In short, third-party support shines when you have an IBM product that is functionally “good enough” for the foreseeable future – you can significantly cut the maintenance spending on that system without hurting the business.
However, it’s worth noting that these savings make the most sense over a multi-year horizon. The longer you stay with third-party support, the greater the financial benefit you realize compared to staying with IBM. (If you only leave IBM support for one year and then go back, the savings could be negated by rejoining fees, as discussed next.)
Companies often redirect the money saved, which can amount to millions for large companies like IBM, into innovation and digital transformation initiatives that were previously difficult to fund due to maintenance overhead.
Read how to negotiate IBM service credits, Negotiating IBM Service Credits: A Strategic Guide to Maximizing Value.
Risks and Limitations
Switching to third-party support for IBM software isn’t a free lunch; there are significant risks and limitations to consider.
Before leaping, keep these key points in mind:
- Loss of IBM Upgrades and New Features: When you drop IBM’s S&S, you lose access to any new software versions, patches, or enhancements IBM releases. You’ll be frozen on your current version (and whatever updates you already downloaded). If a must-have new feature or critical fix comes out later, you won’t automatically get it. Third-party support will help you with workarounds or even custom patches for issues, but you won’t receive official IBM updates. Essentially, you are betting that your current software version will continue to meet your needs. If you decide you need an upgrade down the road, you’ll have to resubscribe to IBM support (often at a steep price) or purchase new licenses.
- Reinstatement Penalties if Returning to IBM: IBM (like most software vendors) imposes hefty reinstatement fees if you leave their support and later want to come back. This means if, after a year or two on third-party support, you choose to return to IBM, they will typically charge you for the lapsed years of maintenance plus a penalty. In practical terms, that could be an upfront cost of 150% or more of what those missed years would have cost. Rejoining IBM support can therefore be very expensive, erasing much of the savings you gained. It’s not a permanent point-of-no-return – you can go back to IBM – but you need to be financially prepared for a large one-time hit if you do. Savvy buyers sometimes try to negotiate these terms upfront (more on that later), but you should plan for a worst-case scenario cost if you ever need official support again.
- License Compliance and “DIY” Upgrades: Going independent on support puts the onus on you to stay within your license entitlements. Using third-party support does not void your IBM license – you’re still a legitimate licensee. But you must be careful not to install any IBM-provided updates or new versions that you’re not entitled to (since you’re no longer paying S&S). For example, you can’t secretly download a new fix pack from IBM after your support has ended – that would violate the terms and could lead to compliance issues during an audit. Reputable third-party providers will refuse to apply any vendor patch you don’t have rights to, and that’s a good thing. It keeps you on the right side of the license agreement. The takeaway is that you need strong internal controls to ensure no unauthorized software updates creep in while you’re off IBM support.
- Security Patches and Regulatory Updates: In IBM’s support model, you rely on IBM to supply security patches, tax/regulatory updates, and other critical fixes. With a third-party provider, you rely on them to address security and compliance updates. Top third-party firms have processes in place to monitor vulnerabilities and create their own patches or configuration guidance, ensuring your systems remain secure and compliant. Still, this is an area of risk – you need confidence that the provider can deliver timely fixes for new security issues or regulatory changes affecting your software. Some organizations are naturally uncomfortable not getting patches directly from the vendor. It’s essential to vet how your third-party of choice handles issues such as new security vulnerabilities, compliance mandates (e.g., updated tax rules in an IBM ERP system), and other urgent changes. They will not have IBM’s source code for proprietary fixes, but they often can devise alternative solutions. Make sure that the level of trust is warranted, because the responsibility for keeping systems safe shifts somewhat from IBM to your provider (and to you).
- Not Ideal for All Industries or Situations: For highly regulated industries (financial services, healthcare, government, etc.), extra caution is warranted. There may be regulatory expectations or internal policies that mandate mission-critical software remains under vendor support or that security patches originate from the original manufacturer. Many companies in regulated sectors successfully utilize third-party support, but they do so with thorough due diligence and documentation. If you’re in a compliance-heavy industry, you’ll want to double-check that using independent support won’t conflict with any regulations or audit requirements. At a minimum, you should carefully document your support arrangements, patch processes, and license compliance to demonstrate control to auditors. Moreover, not every IBM system is a good candidate for third-party support. If an application is still under active development or you know you need upcoming IBM features, staying with IBM is a safer option. A common approach is to split: keep vendor support for cutting-edge or rapidly evolving systems, and use third-party support for older, stable environments. In short, third-party support is best for systems that are in maintenance mode. It’s not a one-size-fits-all solution – use it selectively where it makes sense, and be mindful of the higher stakes in certain sectors.
Negotiation Angle with IBM
One often-overlooked benefit of exploring third-party support is the negotiation leverage it can provide with IBM. Simply put, the threat of switching can pressure IBM to offer better terms on your support contracts.
Enterprise software vendors fiercely protect their maintenance revenue, and IBM is no exception – if they sense they might lose your business, they may become surprisingly flexible.
Many CIOs have found that getting a formal quote from a third-party support provider (showing that a 50% lower annual fee) and sharing that with IBM can lead to meaningful concessions.
In some cases, IBM has responded by matching the savings – for example, offering a one-time 50% support discount or a multi-year fee freeze to keep the customer from leaving.
IBM might also throw in perks like extended support for an older version at no extra charge, or allow you to drop support on certain products you don’t use (something they normally wouldn’t permit), as part of a retention deal.
Essentially, when faced with the real prospect of losing your maintenance dollars, IBM’s sales team may bend rules that were previously “non-negotiable.”
It’s important to approach this strategically. To use third-party options as credible leverage, you should be serious about the possibility of switching – bluffing only works if IBM believes you. Start the conversation early, well before your support renewal date, and let IBM know cost is a major concern.
For example, some organizations have frankly told IBM, “We are evaluating third-party support because our maintenance costs are unsustainable – what can you do to make staying worthwhile for us?”
This direct stance often activates IBM’s retention offers. The result can be a win-win for you: either you follow through with the third-party switch and save 50% or more, or IBM itself comes back with a significantly improved deal. Even if IBM only budges a little, that’s savings you wouldn’t get if you hadn’t considered the alternative.
And if IBM doesn’t move enough on price, you have a ready Plan B to achieve the savings anyway. Bottom line: Don’t hesitate to use the existence of third-party support in your negotiations – it might be the competitive pressure needed to break through IBM’s usual pricing rigidity.
FAQs
Which IBM products can third parties support?
Most on-premises IBM software products are eligible for third-party support. This includes major IBM systems, such as DB2 databases, WebSphere and WebLogic middleware, Tivoli/Maximo, Cognos analytics, Notes/Domino, and many others. (IBM’s cloud/SaaS offerings are excluded.)
Does using third-party support void your IBM license?
No. You remain a valid IBM license holder. Opting for third-party support doesn’t cancel your licenses or break the law. As long as you stay within your licensed version and entitlements, your IBM software license remains intact. You’re simply not paying IBM for support.
Can you switch back to IBM support later if needed?
Yes, but it can be expensive. IBM will let you return to their support program, but usually only if you pay a maintenance reinstatement fee – essentially, the fees for the period you missed, plus a penalty. In practice, switching back may cost as much as buying the support anew (or more), so plan carefully before making the switch. It’s possible to rejoin IBM, but be prepared for a significant expense if you do.
Is third-party support viable in highly regulated industries?
It can be, but extra caution is required. Regulated sectors (finance, healthcare, government, etc.) need to ensure that any third-party support arrangement meets all security and compliance requirements. This means verifying that the provider can deliver timely patches for vulnerabilities and regulatory changes, and maintaining thorough documentation of all updates and processes. Some organizations in compliance-heavy industries continue to rely on vendor support due to strict policies. Still, others have successfully used third-party support by working closely with auditors and compliance teams to mitigate risks. In short, it’s viable if you do your homework and ensure nothing falls through the cracks.
Are IBM Cloud or SaaS products eligible for third-party support?
No. Third-party support is only an option for IBM software you host yourself under a perpetual license. IBM’s cloud-based services and Software-as-a-Service products come with IBM’s own support as part of the subscription – you cannot replace that with an independent provider. If you’re using IBM SaaS (or newer subscription-only offerings), third-party support isn’t applicable.
Five Recommendations for Buyers
Finally, if you’re considering third-party support for IBM software, here are five expert tips to help you make the right decision and get the best outcome:
- Benchmark Your Costs and Savings Potential: Do the math upfront. Calculate what you currently pay IBM annually for support on each product and get quotes from third-party providers for the same coverage. This will show the exact savings (often ~50%) in real dollars. Don’t forget to factor in any one-time transition costs. A clear cost comparison not only justifies your decision internally but also arms you with data for negotiations.
- Use Third-Party Options as Leverage with IBM: Even if you’re not 100% sure you’ll switch, use the competition as leverage. Take those third-party quotes to IBM and ask if they can match or beat the deal. Simply introducing a viable alternative can shift the power balance in your favor. Many procurement leaders use this tactic to secure discounts, price locks, or added value from IBM. Essentially, make IBM fight to keep your business – you have nothing to lose by asking.
- Don’t Switch If You Need Upcoming Upgrades: Be selective about where you use third-party support. If an IBM product is still evolving or you know a crucial new version is coming that you’ll want, stick with IBM support for that one. Third-party support is best for stable, mature systems that you don’t plan to upgrade in the near future. Avoid applying it to any software where access to the latest features or roadmapped enhancements is a strategic necessity for your organization.
- Negotiate Reinstatement Terms Upfront: Before leaving IBM, have a clear understanding of what it would take to return. In some cases, you may negotiate with IBM for a more lenient reinstatement clause or, at the very least, document the standard policy so that there are no surprises. If you’re making a significant switch, consider asking IBM (in writing) about options to return in the future and what the associated fees would be. You may not get a price break, but it’s better to know the “exit penalty” now. Having this nailed down lets you calculate how many years of third-party savings are justified by the risk. Also, keep communication lines open – a cordial departure makes it easier to talk about rejoining if that day comes.
- Document Everything for Compliance: Once you are on third-party support, maintain meticulous records. Document your license entitlements, the patches/fixes applied by the third-party, and any communications around regulatory updates or security issues. This paper trail will be invaluable if an auditor ever questions your support status or if you need to demonstrate that you maintained control over the environment without IBM. Additionally, ensure that your internal teams are trained on the new support process (e.g., how to obtain help from the new provider) and that everyone is aware not to download unauthorized IBM updates. By staying organized and compliant, you’ll avoid legal headaches and be able to fully reap the cost benefits of third-party support.
Read about the differences, IBM On-Premise vs SaaS Support: Understanding the Cost Differences.
By following these recommendations, CIOs and IT procurement leaders can approach third-party IBM support with a clear understanding. The opportunity to slash maintenance costs is real, but so are the challenges.
A shrewd, well-informed strategy – treating third-party support as both a cost-saving tool and a negotiation lever – will put your organization in the best position to save money while safeguarding the value and integrity of your IBM software investments.
Read about our IBM Negotiation Service.
