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Gartner: Third-party support market set to triple in three years

02 Mar 2020

Third-party enterprise software support market is expected to grow from US$351 million in 2019 to US$1.05 billion by 2023 – a 200% increase, according to a recent research note from Gartner.

“Compared with the first nine months of 2018, the first nine months of 2019 show a 50% increase in Gartner client inquiries related to third-party support,” the research note states. 

Plus, “Gartner inquiry volumes suggest that SPVM leaders are now acknowledging third-party support as an established option.” 

A release from Rimini Street outlines the highlights of the report, noting the factors that have led to organisations moving away from a move away from OEM support in favour of third-parties.

The Gartner research note goes on to list a number of key findings for CIOs and sourcing, procurement and vendor management (SVPM) leaders to consider as they look to adapt their approaches to controlling costs while enabling digital business growth. 

A few of these findings include:

  • “Each year, support costs for legacy software increase, while the benefits gained from that support decrease, leading to more organizations seeking lower-cost third-party support options.”
     
  • “More buyers are aware of the value-added offerings from third-party support providers, such as custom-code support, interoperability support, and global tax, regulatory and security services.”
     
  • “Uptake of independent third-party support is increasing year over year. The software vendors’ cloud-first fixation means that, for certain on-premises applications, third-party support may be the only alternative. As on-premises clients face a decreasing number of options, uptake of independent third-party support is expected to increase substantially.”
     
  • “Another key benefit of third-party support is that it allows customers to use the savings (of at least 50% in costs) to fund digital transformation projects that they were unable to achieve while stuck in an ever-increasing support cycle.”

Gartner’s research note includes several recommendations, including that SPVM leaders should “evaluate third-party support as an alternative to the vendor’s support in order to help fund future innovation. In parallel, analyze the software vendor’s support contract and policies to understand any restrictions on terminating support.”

“We believe this research note from Gartner validates the increasing and widespread global use of third-party support to maximise ROI on current enterprise software investments and shift savings to fund accelerated innovation,” says Rimini Street senior vice president and chief marketing officer David Rowe. 

In the past, large vendors, such as Oracle, have attempted to block third-party support through legal action, although there have been no successful cases.

As third-party support grows, organisations will have greater control over their own transition away from legacy equipment and gain more neutral advice on their IT infrastructure roadmaps.

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