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Software Vendor's Revenue Derived from Consulting

Determine the percentage of the software vendor's revenue that is derived from consulting and support versus that which is derived from the initial sale of the software. Software vendor's revenue resulting from consulting and support often exceeds the revenue from software sales. It is not uncommon for companies to permanently assign offices to their software consultants.

If the software company is publicly traded this information is usually available. Things get more complicated when the software vendor is privately held. The best approach in the case of privately owned vendors is to talk to their customers. And this does not necessarily mean talking to the customers that they suggest. Sometimes asking the customers that the vendor does suggest about other companies using the package is helpful. Try to find users groups for the software where you might attend their meetings or information available on the Internet. Query the Internet directly for problems regarding the software package or the vendor.

You simply cannot be too careful when selecting a package. It is an expensive, long term commitment that will directly impact the future of your company.

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