Software Support Contracts Explained: AMC, SLA and What to …

The Software Purchase gets all the attention. The support contract, which decides how your system behaves for the next five years, usually gets a handshake. That is exactly how Businesses end up with a dead billing system on month-end because nobody was contractually obliged to answer the phone. This guide explains AMC and SLA in plain English and tells you what to demand.

What Is an AMC?

AMC stands for Annual Maintenance Contract. It is the yearly fee you pay so your software vendor keeps looking after you after go-live.

A proper AMC covers:

Fixing bugs that appear during real use
Minor adjustments, like a new report or a changed invoice format
Software updates when technology requires them
Helpdesk access: someone answers when staff get stuck
Periodic checks of backups and server health

In Bangladesh, AMCs typically cost 15 to 25 percent of the original development price per year. So a BDT 300,000 system usually carries a BDT 45,000 to 75,000 yearly contract.

What Is an SLA?

SLA stands for Service Level Agreement. If the AMC says “we will support you”, the SLA says how fast, for what, and what happens if they fail.

An SLA defines:

Response time: how quickly they acknowledge your problem
Resolution time: how quickly the problem is actually fixed
Severity levels: not every issue is equally urgent
Coverage hours: Friday? Night? Eid holidays?
Escalation path: who to call when the first person does not respond

Without an SLA, “support” means whenever the developer feels like it. With one, you have something enforceable.

Severity Levels: The Heart of Any SLA

Insist that problems are graded. A sensible structure:

Level	Example	Response Time	Target Fix
Critical	System down, cannot bill at all	1 to 2 hours	Same day
Major	One module broken, workaround exists	4 hours	1 to 2 days
Minor	Cosmetic issue, small report error	Next day	Within a week
Change request	New feature, format change	Scheduled	Agreed per case

Response times should be in working hours unless you pay extra for 24/7 coverage. A pharmacy counter failing at 9 pm has different needs than an accounts office; match the contract to your reality rather than buying the fanciest tier by default.

What a Good Contract Includes

Before signing any AMC, check it contains:

Scope list in writing: what is covered (bugs, minor changes, updates) and what is billed separately
Named contact person with a phone number, not just an email
Backup responsibility: who takes backups, how often, and proof you can restore them
Quarterly health reports: a short document showing tickets handled and system status
Change-request pricing: a rate card for work beyond the AMC scope, agreed now while everyone is friendly
Exit terms: what you receive if you end the contract; source code and data must never be hostage

If two of these six are missing, negotiate them in before paying. Vendors respect clients who read contracts, and the ones who resist are telling you something.

Red Flags in Support Deals

Watch out for these patterns:

“Free support forever.” Nothing is free forever. This promise usually expires silently the first time you actually need help.
No written response times at all. You are buying goodwill, not service.
AMC quoted as a round percentage with zero detail. Ask what the money buys.
Vendor holds the only copy of source code and database. Your business runs on their continued existence.
Support only via WhatsApp messages to one person. If that person leaves the company, your line goes dead.

These connect directly to choosing the right partner in the first place; our guide on picking a software company covers the full checklist: choose-it-partner-bd.

How Much Should You Pay?

Fair benchmarks for Bangladesh:

Situation	Fair Yearly Cost
Ready-made software license support	15 to 20 percent of license price
Custom system AMC	15 to 25 percent of build cost
Hosting + AMC combined for cloud systems	20 to 30 percent of build cost

Pay much less than this and expect slow service; the vendor is losing money on you. Pay much more and demand justification: dedicated staff hours, faster SLAs, or included enhancements.

Also remember what skipping maintenance really costs. One week of a dead counter system typically costs a retail business more than its entire yearly AMC.

FAQ

Can I skip the AMC in year one?

Technically often yes, but year one is when new software reveals most of its issues. Skipping the first-year contract saves little and risks a lot.

What if my vendor shuts down?

This is why you must hold source code, database credentials, and documentation from final payment. With those, another developer can take over support. Our cost guide explains handover standards: custom-software-cost-bd.

Are change requests part of the AMC?

Usually not. Bug fixes and tiny tweaks yes; new features no. Insist on a pre-agreed rate card so changes are priced fairly instead of desperately.

Should the SLA have penalties?

Small ones help: a credit against next year’s fee if critical-response targets are missed repeatedly. Massive penalty clauses just inflate your price, since vendors price risk into quotes.

How do I know backups are really happening?

Ask for a quarterly test restore, where they recover a sample file from backup in front of you. A backup that has never been restored is a hope, not a plan.

Need support terms reviewed before you sign? Contact Proper Way Solution for honest advice on AMC and SLA structures that protect your business.