For most high-end software companies, post- sale services now contribute more total revenue than product and license sales, according to a new research report from the Association of Support Professionals (ASP). The report, based on data from a hundred major public software companies, shows that maintenance and professional services now generate 54% (median) of revenues for a typical software company.
Services also make a substantial contribution to overall profitability, the report points out. Maintenance is the top cash cow, with a gross profit margin rate of 81% (median). Professional services, a category that includes custom development, consulting, and training, is a more people-intensive business, but still delivers a median 22% margin. The ASP's report notes that software companies vary considerably in their emphasis on services.
More information on the service and support industry can be found at www.SupportIndustry.com
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