Charles Mills wrote:
whereas the first time a big shop, upon being quoted the price said "is
that one-time or per-month?" I realized I was leaving a heck of a lot of
money on the table with the big shops.
So I quickly joined the party and went to tiered (or as it was called
then, "group") pricing.
"R.S." <[EMAIL PROTECTED] wrote:
So, I see you joined the party because of incomes, not because it is more
fair model, or other reason. Just - bigger isntallation means more money to
spend. Using this idea bigger datacenters should pay more for electricity
or tape carts (blank). Why not ?
Bigger datacenters DO pay more for electricity, don't they? Bigger machines
usually require more electricity, which costs more to run them. There is no
electricity company I know of that charges a flat fee for a 'datacenter',
regardless of size. Instead, they say "you use this much KWH, we charge you
this much. You use this much KWH, we charge you this much", and so on.
On a PC, software is frequently licensed by number of users. If a company
wants 1 copy of the MicroFocus workbench, it costs this much; if they want
10 copies, it costs this much. Why should mainframe software cost a single
flat fee, regardless of how many people use it?
Having said that, I don't practice what I preach. As an ISV, I sell a
mainframe software product to North American customers at a single flat fee
of 5K per year. This amount is charged regardless of the size, speed, or
number of users on the customers mainframe. However, I struggle with whether
this is fair. If a small company has 10 programmers, their 5K investment
should net them an annual saving of somewhere between 50K to 100K (i.e.
roughly the cost of hiring an additional programmer). If they have 100
programmers, their 5K investment should net them a saving of anywhere from
half a million to one million dollars a year. Does this seem fair?
Several years ago I heard a competing product was being licensed to a large
company for 200K per year. While 200K might seem like a lot of money, the
company had well over 1,000 programmers. If the competing product generates
similar productivity savings to the ones I've just mentioned, this means the
200K investment would save the company anywhere from 5 to 10 million dollars
a year. This seems like a tremendous return on investment, but smaller
companies can't afford to pay 200K per year. So, does this mean smaller
companies wouldn't be able to license the software? Of course not; thanks to
tiered pricing, smaller companies would be charged a lot less money. In this
sense, tiered pricing seems to make things more fair, not less fair.
For me, I'm still struggling with the whole pricing issue. The current flat
rate of 5K per year doesn't generate enough revenue, so should I increase
the flat rate for everyone, or should I keep it low for smaller customers
and increase it for bigger customers? If bigger customers are charged more
money, what would the increase be based on; MSUs? Seats? Concurrent usage?
(Note: The idea of locking people out of software just because 'x' number of
people are already using it doesn't seem very appealing to me).
It would be nice to have a pricing structure that everyone agrees is fair,
but I honestly don't know what the answer is. And when I see messages posted
on IBM-MAIN about the unfairness of tiered pricing, it just makes the entire
decision that much more difficult.
If anyone has opinions or suggestions on this subject and would like the
opportunity to influence an ISV, here's your chance. Please feel free to
contact me off-list if you prefer.
Regards,
Dave Salt
SimpList(tm) - The easiest, most powerful way to surf a mainframe!
http://www.mackinney.com/products/SIM/simplist.htm
----------------------------------------------------------------------
For IBM-MAIN subscribe / signoff / archive access instructions,
send email to [EMAIL PROTECTED] with the message: GET IBM-MAIN INFO
Search the archives at http://bama.ua.edu/archives/ibm-main.html
