Standby Charges for support

Thx guys and gals for all your responses re the standard markups and source code ownership. Very enlightening, and obviously a passionate subject!!

I have one other question regarding support contracts and the like.

Assuming that you have a client who you connect to and troubleshoot their processes over the internet or dialup. Also the expectation is that they can call you at any time to ask questions and to solve problems. 24/7 on call if you will.

From a contractual point of view, is there an expectation that you should be paid for being 'on call'?? Your cell phone is the pager from days gone by, and those guys were paid to carry the pager, but have no idea how much.

Is it or should be commensurate with the type of work and the risks for the client if they don’t reach you in 10 minutes?

Thanks in advance for your valuable comments!!

Happy Saturday to all

Cheers from: Jeremy Pollard, CET The Caring Canuckian! www[.]tsuonline.com

Control Design www[.]controldesign.com Manufacturing Automation www[.]automationmag.com

3 Red Pine Court, RR# 2 Shanty Bay, Ontario L0L 2L0 705.739.7155 Cell # 705.725.3579

The short answer to that is "it depends". I will assume you are not talking about start up and commissioning (since you haven't mentioned that). I will also assume that the customer hasn't negotiated anything specific as part of the purchase contract and that this support is for the period after the warranty expires.

Most companies selling run of the mill hardware or software offer support during their normal business hours. If however a customer wants support with a guaranteed response time outside of those hours though, they may have to negotiate a service contract. The service contract guarantees that if the customer calls, someone will pick up the phone and start answering questions within e.g. 10 minutes (or whatever the response period is) 24 hours a day, 365 days a year.

The cost of that is typically related to the cost of paying someone to be on call (plus overhead, etc.). That cost is in turn related to the probability of actually receiving a call, so it depends upon the particular circumstance.

Some companies will charge an additional fee for calls outside their normal business hours. The purpose of this charge is to encourage customers to make non-critical calls during normal business hours.

Some companies offer 24 hour free service. These though are usually companies which sell around the world and which have customers in every possible time zone. I think they usually just have someone in the office around the clock (except Christmas, New Years, etc.). They are usually selling some very specialised equipment where the customer is paying a premium for this sort of hand holding as part of the purchase price. Customers buy from them because of this service.

Some purely software companies will offer free e-mail support. If you send them an e-mail, they will answer it within 24 or 48 hours. If you want immediate telephone support however, you need a service contract. They will also sometimes have an IRC channel that they monitor during normal business hours and answer simple questions. I haven't seen IRC used in the automation business though.

Generally though, support should be classified into priority levels. Low priority should be encouraged to go through e-mail (and possibly IRC). Routine telephone requests should be handled during normal office hours. Priority requests may (depending upon the sales and marketing strategy) require a service contract. If a support contract is used, a special phone number can be used which is only given out to people who have contracts. This helps sort the routine calls from the priority calls, and also reduces the chance that someone with a support contract will get a busy signal.

24 hour guaranteed support is usually associated with larger companies. If you are a one man operation it is difficult to do. The problem with being on call isn't just that you might get called in the middle of the night. It's also that the on-call person can't be tied up in customer meetings or away on a job site where they can't be reached.

You also have to consider that the customer might ask for financial penalties if the response time isn't met (this is common in some parts of the IT industry). The higher the risk to the customer, the more resources you need to have dedicated to support on the chance that the customer *might* need it, and the more you have to charge for it.

You also have to consider why the customer needs the support. Why can't the customer fix it himself? If they should be able to but they don't know what they are doing, then you could be getting yourself into a bottomless hole. In that case, you better make sure you are charging by the hour because they'll have you busy fixing routine problems 24 hours a day if they think it is cheaper than hiring their own staff. I can guaranty that someone *will* do that cost analysis.

Having said the above, I will say that I have been offered support contracts when purchasing equipment, but have always turned them down. Those decisions though were based on the particular circumstances.

Support contracts have to make sense for the business and for the customer. They make sense if the customer feels they need them to mitigate serious risk for problems that occur only occasionally. They are also however one of the best ways to destroy a business relationship if the customer feels they are simply an excuse to gouge them for more money.