The True Value of Software Services: From After-Sales to Core Competency Introduction: A Decade of Firsthand Experience

 During a recent conversation with the CIO of a financial client, we discussed the difference between vendor-provided services and third-party services. Around the same time, I also spoke with a veteran who spent decades in HP and IBM’s service departments. These conversations brought back reflections on my own journey, over ten years in software service roles, starting in 2013. I’ve witnessed the final golden decade of global software vendors operating, and I’d like to share my perspective on the evolving role and value of software services.

1. Service Is Not “After-Sales” — It’s Part of the Product

Many customers see software services as merely after-sales support. But in mature software companies, service spans the entire product lifecycle — from pre-sales, implementation, and delivery to post-launch optimization, issue resolution, and upgrades.

Buying software isn’t just about acquisition — it’s about usability and effectiveness, both of which rely heavily on professional services.

2. Understanding Service Through the Delivery Chain

In my years working with U.S.-based software vendors, I’ve observed the full delivery and operations chain — from product design (Day 1) to ongoing support (Day 2):

Customer → Channel Partner → Vendor Sales/Presales → Professional Services (PSO/GSO) 

R&D→Knowledge Management→Technical Support → Professional Services (PSO/GSO) 

Customers may only interact with the front-line service engineers, but behind that lies a complex system of consultants, technical account managers, knowledge base teams, product documentation, and tooling — all of which are critical to service delivery.

A Note on Customer Mindset:

• Financial institutions often lead in service awareness due to regulatory pressure.

• Manufacturing, healthcare, and enterprise customers, however, often expect top-tier service without paying for it — a mindset that severely underestimates service value.

A Note on Sales Engineering (SE):

SEs are increasingly used as unpaid support staff, assisting with POCs, troubleshooting, and even implementation. While not officially in service roles, many SEs are forced to deliver services to push sales forward, especially in local vendors where SEs often double as post-sales engineers.

3. The Backbone of Service Delivery: PSO/GSO

At global software companies, PSO (Professional Services Organization) and GSO (Global Services Organization) form the structured execution layer of services. Roles typically include:

Role	Responsibility	Funding
Consultant	Project-based delivery under SOW	Customer-funded (by project or man-days)
Resident Engineer	On-site, long-term support	Customer-funded, high cost
Technical Account Manager (TAM)	Resource coordination, escalation management	Customer-funded (annual)
Customer Success Manager (CSM)	Drives renewals and satisfaction	Often vendor-funded

4. True Service Systems Require Preparation — Not Ad-Hoc “Rescue Mode”

Many local vendors still lack structured support readiness. When issues arise, the first instinct is to create a group chat and loop in developers, sometimes even writing hotfixes on the fly. While this seems “fast,” it's actually a sign of system failure.

In mature vendors, Support Readiness is a formal process, activated before product release. It includes:

• ✅ Knowledge base and documentation

• ✅ Support portal and ticketing systems

• ✅ Internal training for support staff

• ✅ Reproduction labs

• ✅ Escalation management processes

• ✅ Global coverage (24x7, follow-the-sun model)

All these components require specialized teams, tools, and budgets. When customers pay for support, they're not paying for a single engineer — they're buying access to this entire machine.

5. Services Are Not Extras — They’re a Revenue Engine

Financial reports from vendors like VMware and Nutanix clearly show that services are not add-ons — they are key revenue streams:

• Support Services – Critical for long-term product stability

• Professional Services – Consulting, training, implementation

• Licensing – Product access only; value is realized through the services around it

Customers must understand that their service fees sustain not just operational support, but also continuous product improvement.

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6. What Does a Software License Actually Buy?

Clients often ask: “What exactly am I getting when I buy software?” Here's the answer:

1. The right to use the product (license)

2. Ongoing support and protection (400 support, knowledge base, updates)

3. Access to future development, upgrades, and fixes

There are two primary licensing models today:

A. LoD (Life of Device)

• The license is valid as long as the hardware is in use.

• Ideal for integrated appliances and long lifecycle hardware.

• Higher upfront cost, but more cost-effective over time.

B. Subscription-Based Licensing

• Pay annually or based on usage.

• Includes continuous updates and support.

• More flexible for dynamic IT environments.

Criteria	LoD License	Subscription License
Cost Model	One-time	Recurring
Support Coverage	Tied to hardware lifecycle	Tied to contract duration
Flexibility	Low (fixed-term)	High (scalable, cancelable)
Legal Risk	Low	Higher if service is terminated
Long-Term Cost	Lower if used long	Slightly higher overall
Ideal for	Stable, asset-heavy IT	Agile, fast-evolving teams

Note: LoD is not a perpetual license. Even perpetual licenses only guarantee a specific software version — they don’t include updates, security fixes, or long-term compatibility.

This is why subscription models are now dominant — they offer better protection, support, and long-term alignment with product evolution.

7. Final Thoughts: Service Is Not a Side Dish — It's the Soul of Software

We are transitioning from a product-centric to an experience-centric era.

Service is not an afterthought. It is:

• An extension of product quality

• A foundation of customer satisfaction

• A core differentiator in market competition

This article was inspired by a few meaningful conversations. I hope it provides new insight into the true value of software services — for customers, partners, sales teams, and anyone building the next generation of software products.