Published on: 20-06-2023
You may have heard of the reliability of software. It never deteriorates and can be copied forever into perfect clones of itself. Once the errors and bugs are fixed, that's it, right? You never have to touch it again. You may be right if you're speaking of digital music or an ebook, but not so much when you refer to complex software.
Implementing software implies capital expenditures or CapEx which are basically one-time payments or expenses that are done for benefits in the future. An alternative falls into operating expenses or OpEx that are smaller, regular payments for maintenance, bugfixes and feature improvement. You can't stay ahead of the competition by using outdated software.
Software behaves like an living organism
The lifecycle of software inevitably includes
- An infant stage with potentially lots of untested states, hidden errors and unwanted behaviors.
- A production stage when the software is being used by its intended target.
- An obsolete stage where it's replaced by newer software or is simply not needed any more.
At the end of the lifecycle, the software becomes unusable either because of hardware concerns, or it becomes useless, plain and simple - the solution it provided is not needed any more. But this isn't really the focus of this article. Instead we want to talk about what is needed to extend the production stage as much as possible, by updating and innovating software.
The infant stage (or stages)
In reality, software can be considered to have multiple infant stages, given that it receives
- updates to satisfy new user demand like changes to existing features and visuals,
- new security measures
- or updated 3rd party software.
These require skilled developers and testers, and funds relative to the complexity of the existing functional code as well as to the specialists assigned to these tasks. Each update to the code requires extensive tests to make sure everything still runs as intended. Very often one, even small, update will require several more updates in other areas of a software's workflow. These costs are categorized as CapEx because the resulting assets (the updated code) will be used in the future and will be amortized over the lifetime of the asset.
The production stage
The production stage is the breadwinner that is the goal of every stakeholder and investor. Once the bugs are ironed out, the software enters an idealized state and goes into production. But can it work forever in that state? Technically, yes, but you must take into account many other factors.
- Hardware which does wear out and needs to be replaced, like storage devices, RAM and processors or even a basic power socket.
- Incompatibility with new hardware which can prevent users with new devices from running older software.
- Competing software which uses more intuitive designs, has better features, is better optimized. It will gradually replace older software, eventually to the point of rendering it financially unsound.
- Outdated security features leave even a feature-rich software open to attacks from skilled hackers. What use is having the best, most optimized features if you too-easily lose all of your users' data?
Software is (a bit) like a car
While in the production stage, the software still needs regular input to have it work like a well-oiled machine.
A car needs regular checkups for many of its components and consumables
- oil
- filters
- body work
- tires
Just like a car, software needs (respectively to the above)
- hardware maintenance
- security measures
- design updates
- optimization changes
You wouldn't want to drive an car taken straight out of a 10-year storage unit, right? Sure, it worked fine before, but time has a way of introducting bugs.
How do you keep software running for the long term? The answer is maintenance with OpEx
Maintenance operations have to be done by skilled engineers, maybe even as skilled as the ones who built the software, depending on the learning curve of handling the code. This is where we talk again of OpEx. All code requires maintenance and all businesses want to preserve capital, flexibility and scalability.
Here are some accounting advantages of using OpEx
- OpEx is reported on the income statement and is expensed immediately. It cannot be depreciated over a longer time period, like is the case for CapEx.
- The expenses are fully deductible in the tax year in which the expense is incurred.
- The cost may be spread out over the course of the year, for example as a monthly subscription payment.
- The generally lower cost of OpEx means that budget approval is often easier in both small and corporation-level organizations.
- The costs can be more easily adapted to current needs, based on usage and other fees. This results in cost savings, while ensuring easy access to new features and innovations.
- It keeps systems running and knowledgeable maintainers attached to projects. Any issues that may arise can be more swiftly fixed by maintainers who are already familiar with the code.
Conclusions
Change and maintenance are costly, but at the same time, inevitable. Using outdated technology puts your business at security and compliance risks. Even worse, it can turn loyal customers into ones who no longer trust your software. In the long run, this affects revenues and productivity.
Upgrading to the software’s latest version is a must. Keeping the software maintained and fresh is vital from both a business and a security perspective.
How do I use all this information?
We outlined the software lifecycle and the importance of extending the stage that brings in money. At the same time we made it obvious that software doesn't 'live' forever. Even after the bulk of the code is in production, there are additional costs that can help the software remain fresh for longer. OpEx can provide the facelift a software needs to stay ahead of the competition. Contact the team at Apidemia to see how we can help you run effective and affordable software maintenance for the long term.
Why choose Apidemia for extending the life cycle of my platform?
- Apidemia is one of the few companies that are official commercial vendors for Laminas.
- Our projects are built for the long term, 10-15-20 years, without fundamental changes.
- We keep the stack updated with regular updates that take advantage of newer packages.
- We have a team of highly experienced software engineers, business developers, testers and managers. Most of our developers are ZCE (Zend Certified Engineers) and are familiar with the most efficient design architecture and coding practices
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