The Lifecyle of an Application

Michael Doane, a Sr. VP with META Group, made the statement, which really surprised me, “The lifecycle of your applications is around 20 years…” That's a long time — much longer than I would have predicted. As he explained, “SAP, Oracle, Peoplesoft… You’re going to have it for a good 20 years.” His point: “Now that the application becomes a done deal, you’re on your maintenance contract. What’s left [to reduce spending on]? How do you run that software? SAP [revenues]: 40% is services… PeopleSoft [services revenue] always exceeds [its] new licensing revenue. Vendors will take their piece of your IT budget, for sure. You have to become smarter about how you obtain, contract for and manage those services.