> -----Original Message----- > From: IBM Mainframe Discussion List [mailto:[EMAIL PROTECTED] On > Behalf Of Rick Fochtman > Sent: Sunday, February 18, 2007 11:20 AM > To: [email protected] > Subject: Re: License keys for ISV products(What alternatives are there?) > /snip/ > Vendors have an obligation to their shareholders to protect their > intellectual property, and try to limit liability in case of abuses; I > can accept that. But let's face it, some vendors' pricing practices are > downright PREDATORY. First they hook you into using their products, > then impose unconscionable price increases after the so-called > "introductory period". In my personnal experience, one vendor sent 9 > marketting reps to my office, when all I had requested was a copy of the > proposed contract, which could have been FAXed to me! Bloated marketting > staff with nothing to do; I'm sure other areas of staff are similarly > bloated; all these things contribute to high prices and loss of > fexibility. Compuware built a nice shiny new headquarters building in > downtown Detroit, then promptly laid off 5,000 people to "cut costs". > > Too many "pencil pushers" and not enough technicians!
Now you're starting a different subthread. Keys to protect intellectual property have not much correlation with the pricing model. Usage-based pricing model is for "leased software", not "purchased software" (like M$ Excel). There is a huge difference between leased versus purchased software licensing models. Purchase software, like M$ Excel, generally have limitations on upgrades, operating system, and support life (bug fixes). You pay once, and get bug fixes on a somewhat timely basis until end of support. Installing the software "phones home" and identifies itself to be sure that the particular serial-numbered software is not already installed elsewhere. This is a reasonable way to protect against piracy, but it may be a problem for some mainframe sites that want to be isolated from the outside world. Leased software, like much of the mainframe software out there, has some kind usage-based pricing that hopes to correlate the cost of the software to the benefit received. The customer receives bug fixes, new versions, and support for newer operating systems. If the customer does not perceive the benefit as being greater than the cost, then the customer stops paying and the product stops operating. Most CFO's use the concept of a "hurdle rate" that specifies the rate of return on any investment. The benefit must exceed a certain multiplier applied to the cost of the investment. Usage-based pricing has many challenges. Is it per user, machine capacity, or per transaction (i.e., "metered usage"). If it is metered usage, how is the usage measured and reported (e.g, intrusiveness and accuracy are primary concerns). If it is machine capacity, how to accommodate periods of low activity versus high activity (end of quarter and end of year processing)? If it is per user, how quickly can the ISV accommodate changes in user quota? The notion of using dongles (a hardware device with a programmatically accessible serial number) is one way to assure that the software is running on the correct machine. The mainframe CPU serial number serves the same purpose. The MAC address for a network card also serves the same purpose, but is harder to verify programmatically on a mainframe. All of the concerns and issues mentioned above must somehow be distilled into a license key implementation that does not add unnecessarily to the sysprog burden. I understand that customers dont want to become dependent on leased software that expires and shuts down during critical times. However, there must be some reasonable cut-off point when negotiations break-down at contract renewal time. If the customer and vendor cannot agree on a new contract, then the product must stop operating. Where will you draw the line; 30 days, 60 days, 180 days, more? How long will customer get a free ride on a mission-critical ISV software? Until a replacement can be found or built? Does the contract allow for defaulting to month-to-month fees until a new long-term contract is negotiated (or the customer has gotten past their critical end-of-quarter processing)? What if there are no acceptable replacement products and the customer is unable or unwilling to build their own replacement? Disaster recovery on unknown machines (why are they unknown?) is a big issue. Many license key implementations are awkward and difficult to manage. Complain to the ISV and be specific about the issues. Pricing models are entirely a different matter that have little correlation to the license key implementation. Let's be clear in this topic when discussing pricing models versus license key implementation. License keys are never going away. However, bad implementations should go away. Jeffrey D. Smith Principal Product Architect Farsight Systems Corporation 700 KEN PRATT BLVD. #204-159 LONGMONT, CO 80501-6452 303-774-9381 direct 303-484-6170 FAX http://www.farsight-systems.com/ see my résumé at my website (yes, I am looking for employment) ---------------------------------------------------------------------- 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
