warning: long, probably too long and rambling....

At 11:44 AM 12/1/01 +1000, Don Ingram wrote:
>Simple,  If enough people sign up on the Tasking Compiler then Prottle feel
>justified in charging us all for ATS. Kind of a 'baubles for the natives'
>deal.

Given that there is a simpler and less paranoid explanation of the compiler 
offer, this is a bit of a jaundiced view. The offer is a simple way to test 
the interest within the existing Protel community with regard to the 
compiler. How they use that information might include a decision to include 
or not include the Tasking compiler within the Client environment.

But I would think this a small issue in terms of the value of ATS. How 
Protel "feels" is not particularly relevant, rather the issue for Altium 
management would be (1) What do they have to sell? and (2) what will the 
market bear?

The corporation model sets up the primary duty of corporate manager to be 
maximizing profit. An enlightened management may consider that good 
customer service ultimately facilitates profit, but "good customer service" 
does not necessarily include protecting the customer's budget.

Protel may have gotten the idea that the software is worth quite a bit more 
than they had previously been charging for it. Right now OrCAD has a sale 
on, 50% off, for a package not as easy to use, and not as powerful, as 
Protel 99SE. *Maybe* the simulator is better, I merely mention that as a 
possibility, not as a probability. Half price is $9000. This does not 
include Specctra, for a six-layer simpleminded version of Specctra, add 
$2000.  So someone buys the package without Specctra on sale. Then they 
face what I think will be a standard 15% maintenance fee, i.e., about $2700 
per year.

I suspect that it has not escaped Altium's notice that they have a better 
product selling for less. If the market would support it, they could 
justify charging more than $8000 for the suite and more than $2000 per year 
for maintenance. So they don't need the Tasking Compiler to "feel justified 
in charging us all for ATS."

The fact is that they are not planning to "charge us all." Rather those who 
want ATS will buy it. They are not going to try to repossess the licenses 
if you don't buy ATS! They can't send me a bill for ATS.

But the next upgrade is going to include, they have announced, one year of 
ATS. For reasons that I have mentioned before, I think the 99SE upgrade 
price to the next version is going to be $995 or so, but if I am wrong, it 
certainly will not be more than $1995. If they charge $1995, they will 
effectively have devalued the 99SE license to almost exactly the same price 
as a Protel 98 license, since the current upgrade to 99SE from 98 is $1995.

Will the next upgrade, forget ATS, be worth $1995? I strongly suspect that 
it will be; the autorouter alone is likely to be worth this.

Now, Protel has a history of providing bonus value. For those who have been 
able to recognize the utility of the product, and who need the core 
functions, price has not been much of an issue; price is *always* a matter 
of two things: (1) utility, i.e., will the benefits of the expenditure 
outweigh its costs? and (2) relative value, i.e., is there another product 
for the same cost or less with equivalent utility? Protel has always 
comfortably satisfied both criteria. For setting prices, the second 
criterion is usually the primary one unless there is no competition. There 
is competition, but not in Protel's price range. Yet.

As Altium raises prices, it becomes more difficult for small companies to 
afford the package; the number of designs which must be done per year to 
justify the expense rises. Higher ATS cost will definitely impact these 
companies. Another effect of higher prices, however, is to encourage 
competition.

My wife has a business as a yarn merchant. She is the only manufacturer for 
the hand-weaving and kitting market of yarn made from Tencel; she both 
retails it and wholesales it to others. There is almost zero competition. 
If she raises her prices too high, however, sales will start to decline; 
whether or not net revenue will decline is a complex question; but I'm 
pretty sure that there are potential competitors who, if they saw enough 
margin, would decide to enter the fray. Because my wife has not set prices 
too high, the competitors are, in fact, buying the yarn from her. They are 
not selling enough, individually, to make it worth their while to hire a 
mill to buy the yarn (mills require large orders).

There is competition from above; Cadence could decide to reduce the OrCAD 
pricing, they could decide to reduce the maintenance cost. In my view, only 
history explains the market power that OrCAD enjoys, it is not a superior 
product. Likewise PADS.

At the other end, there are competitors who are filling the original market 
which Protel hit. Protel only has one product in this market, Circuitmaker. 
Tsien's Boardmaker has a lease model that means, effectively, there is no 
software price at all, only maintenance, and it is very cheap.

If Altium is going to raise the ATS price as high as $2000, I'd suggest 
that they *reduce* the entry cost. It's like razors and razor blades, or CD 
players and CDs.

However, if Protel makes ATS too expensive, it will add force to the 
possibility that Protel users will start to desert the product. The most 
valuable asset Protel has is the user base. Once a user is accustomed to a 
program, he is loath to change, the real cost of retraining can greatly 
overshadow the cost of a new package. So a software company is wise to use 
whatever devices it can to get people using the product. Once they are 
using it, and if it is a good product, they will tend to continue using it 
*even if it is not the best.* If this were not true, OrCAD and PADS would 
have been dead long ago.

>Too bad if you are a specialist PCB designer or just an Engineering firm who
>moved on past the 8051in the late 80's to one of the far better RISC
>products such as H8, MSP430 or AVR etc.

This would be true if Altium raises the ATS price based on including 
something you don't need.

But Altium is abandoning Protel traditions right and left. This is a 
dangerous business, since a tradition that was responsible for success -- 
we don't always know which ones fall into this category -- might get lost 
somewhere along the way. However, the "one suit fits all" model does not 
really make a lot of sense, once many highly specialized tools start to be 
included. It makes sense to sell a package with schematic, pcbdesign, 
autorouter, and CAM tool. Simulation starts to move away, only a certain 
segment of users need it or use it. I've played with the simulator a 
little, but I've never actually *used* it. Likewise the PLD tool.

A 3D viewer makes sense as part of the basic suite, a real one, not the 
present proof-of-concept toy. So Protel might possibly move to packages 
designed for various kinds of users. A Schematic package, perhaps with 
simulation and PLD. This is for an engineer who gives the PCB design to 
someone else. A PCB design package, which includes Schematic, PCB, 
Autorouter, 3D viewer, and CAM. A complete package which is for a small 
engineering company that does everything.

If every user is carrying the cost of all the components of the full suite, 
it's pretty obvious that the utility/cost ratio will suffer. The synergy 
might be such, however, that the users who need a part of the package are 
the only ones who are *actually* paying for it; the others are getting it 
*free.* I don't mind having the simulator! To explain this in a way that I 
hope might be more clear, some users might use a compiler and they might 
not use the PCB design tool. Another user is in the reverse situation. That 
things would precisely balance is highly unlikely, but it might work *more 
or less* to provide every user with every tool.

So we will not necessarily be paying more if the Tasking compilers are 
tossed in. Rather, if enough new users join the club because of those 
compilers to more than cover the cost of buying or developing and 
maintaining the compilers, Altium's profit will increase. That the compiler 
was provided "free" to thousands of users who don't need it is pretty 
irrelevant, because there is very little additional cost for these useless 
appendages, it's only the manual, really. And if the tool has no chapter in 
the printed manual, just PDF on the CD, the incremental cost goes to about 
zero.

I use only a small fraction of the tools available within Microsoft Office; 
indeed, I use only a small fraction of the tools available just in Word. 
But I'm glad those tools are there; as long as I didn't pay too much extra 
to have them; they are there when I need them. And that is how suites work....

>----- Original Message -----
>From: Ralf G tlein <[EMAIL PROTECTED]>
>
>Subject: Re: [PEDA] Tasking Offer

>Where's the catch in it?

I don't think there is any catch. It's the same as CAMtastic, which was 
given to us at much greater cost, since Protel actually distributed CDs. 
Added value. I think we have really done well over the last few years. 
Someone who bought Autotrax, then upgraded to Protel 98, then upgraded to 
99SE spent less than $4000. If they upgraded, say, to version 2 and 3 in 
the mean time, they paid more, but they also had more utility in the mean time.

Sure, most of us don't need the compilers, which is one reason, I think, 
that they did not send out CDs. *That* would have cost them real money 
without adding so much value for the user base as a whole. Thus the download.

[EMAIL PROTECTED]
Abdulrahman Lomax
Easthampton, Massachusetts USA

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