Days of free software support appear numbered

There is no such thing as a free lunch, and there may soon be no such thing as a free technical support call. As prices and profit margins fall in the personal computer software industry, some software makers are charging their customers for what was once "free" technical advice.

The Microsoft Corp., for example, has revamped its technical support programs, and part of the plan includes new "priority" and "premium" fees for customers who call outside business hours seeking solutions to their problems.


As of Oct. 1, Microsoft customers who want technical support 24 hours a day, including weekends, must choose whether to pay $2 a minute, $25 a call, $195 a year, or -- for corporate customers with urgent questions -- $20,000 a year.

The trend toward pay-as-you-go technical support has significant implications for business customers, because product support is the single largest component of the "real" cost of software.


The Gartner Group, a research and consulting company in Stamford, Conn., said businesses eventually spend almost twice much for product support on a software package as for the licensing fees and subsequent upgrade fees.

So, savvy software managers know the price of a program is almost trivial in contrast to the costs of getting help in installing it, using it and keeping it productive.

The new fees are one facet of Microsoft's broader program to provide information to customers, which includes a greater reliance on the hardware companies that bundle DOS and Windows on their PCs, and an increase in automated services that provide free or low-cost answers through facsimile, electronic bulletin board and on-line systems.

Microsoft was not the first company to impose fees for desktop software support, and personal computer hardware companies have had the so-called premium support services for years. But by virtue of its size and influence in the industry, its move last month had almost immediate reverberations.

"I wouldn't be surprised if other companies heaved almost a sigh of relief," said Robert Horwitz, editor-in-chief of Microsoft Directions, an independent newsletter that analyzes the technologies and strategies of the software giant, which is based in Redmond, Wash. "If Microsoft does it, it makes it easier on them to start charging, or it gives them a great competitive advantage if they choose not to charge."

Some companies, including Borland International Inc. and the Lotus Development Corp., moved swiftly to implement paid support plans. Borland recently cut the price of its Quattro Pro for Windows spreadsheet to $49.95, which left no room for technical support services, and last week it began charging for "extended" technical support.

"The industry is moving to 'pay for what you really use,' and that is the basis of Borland's new extended support program," said Philippe Kahn, the chief executive of Borland.

David W. Cearley, vice president and service director for work group computing strategies at the Meta Group, a consultancy in Westport, Conn., said the shift to paid support is a natural evolution in the industry.


When mainframes ruled the earth and software packages were licensed for half a million dollars a year, software companies could afford to provide customers with a personal support technician, Mr. Cearley said. But as microcomputers replace mainframes and push down software prices, all bets are off.

According to Mr. Horwitz, corporate customers who remember the mainframe age "understand the model of paying extra for support, and they're willing to pay to get the answer when the system is down."

But users whose computer systems arose in the PC era said they found the idea reprehensible.

"I'm livid," said Greg Boettcher, who administers a network of about 200 Microsoft DOS and Microsoft Windows-based PCs for the province of Manitoba's Department of Industry, Trade and Tourism in Winnipeg.

"I have called their technical support on numerous instances, and it seems that once I get through the maze of voice mail, if I happen to be so lucky as to get a real person instead of a recording, more often than not I'm told to contact my PC vendor," Mr. Boettcher said. "The unmitigated gall of this company to charge for something that they couldn't even provide for free. It's an abomination."

Although the software companies phrase it more diplomatically, the real message is that they are losing money by providing technical support to their customers, who are demanding more features and complexity in their software while also demanding greater discounts and lower prices.


An executive of one software company, who agreed to discuss figures only if he was not identified, said "it costs me at least $15 each time the tech support line rings." The biggest cost is hiring and training support technicians.

Jeffrey Tarter, editor and publisher of the newsletter Soft Letter, said the cost was higher. Soft Letter surveyed 148 software developers and publishers earlier this year and determined that the "fully loaded median cost of answering a single call is $23.33, including labor operating costs and other overhead."

(Peter Lewis works out of the New York Times' Austin, Texas, bureau: [512] 328-8258.)