At 03:52 PM 11/19/2002, Brad Velander wrote:
Abd ul-Rahman,
        your comments are quite valid. However Altium is already refusing
the transfer of licenses on Accel products. I know this because I tried to
obtain permission to sell 3 Accel licenses recently. How long do you think
that separate policies will be maintained? Therefore, caveat emptor!
The Accel PCAD license has, as long as I know about it, always prohibited transfer, I'm not sure about prior products like Tango DOS. Altium is simply continuing that policy, as bad as it is.

I was told that Accel product licenses *could* be sold. There might be the requirement that the underlying business be sold. Rather obviously, if a company is sold, the buyer doesn't have to buy new CAD licenses! Now, try to define "underlying business" in a way that is not full of loopholes.... Can a corporation or sole proprietorship sell a division, such as the My Home Design Service PCAD Design Division? If a CAD company tries to unreasonably restrict a bona fide transfer, it could end up at the losing end of a lawsuit, and the publicity cost would be worse.

Protel always had a transferable license; conditions were added because of some abuses or situations considered undesirable, but none of that would justify a blanket prohibition of resale. Protel was somewhat unusual, most other CAD companies explicitly prohibit resale. But all of them still permit it if the business is transferred.

Imagine the screams if a hardware vendor tried to prohibit resale. It has been argued that software is different, because there is a new-user support cost. Well, if there is a new-user support cost, it could be made explicit that a transferred license gets no special support. But it is a phony argument. If a company owns a license and a new employee starts to use it, that is a new user, who may very well need just as much support as any new buyer. Better to find inexpensive ways to provide support, such as referring users to the user group mailing list. Further, hardware can also involve new user support costs. Typically there is a warranty period, but most mfrs still provide support beyond the warranty period. Sometimes there is a fee for it.

Microsoft products are generally transferable, at least they used to be. Yes, there are conditions, but a license that was not transferable would mean that one would have to relicense a computer that was sold with its operating system.... Pretty crazy, not to mention unenforceable. (Even the XP system, which makes it hard for users to move the system to a new computer, does not squawk at a sale of the computer, since it doesn't know about it.)

Protel has a defacto maintenance fee in excess of $1K per year. Surely that is sufficient to cover alleged "new user" expenses!

It would not be unreasonable for Altium to charge a transfer fee sufficient to recover their costs.

I've known for a long time of sentiment within Altium against continuing to allow resale. It's a bad sign if that faction is getting the upper hand.

Prohibiting resale is quite clearly contrary to user interests. Companies should avoid such policies like the plague. I'm quite certain: if it is bad for customers, it is ultimately bad for the company.

I have elsewhere spent, or perhaps wasted, countless electrons arguing that license resales greatly benefit the CAD company, and even if they did not, the damage that they might do is miniscule, easily counterbalanced by the good will.

One of the aspects of the situation that has led Altium, I think, to begin to weigh against allowing resale is that Altium decided to eliminate the VARs in most markets. But resale by a VAR is quite different from resale by a user. In the latter case, the user is merely recovering a fraction of the original investment, in the former, the VAR hopes to profit from the sale. A resale broker or buyer and seller of user licenses is much more like an agent of the user rather than a genuine reseller (i.e., retailer).

If Altium actually promoted the resellability, if customer knew that their actual immediate expense on the license was, say, half of the list price instead of the full price (because they would now own something with cash resale value instead of incurring a pure expense with only some speculative use value), it might make purchase decisions easier. Now, there might be technical and legal difficulties with this, i.e., with Altium itself advertising resellability, but I do know I have made major purchase decisions, such as what new car to buy, based on expected sale value. It would not be a problem for an Altium salesperson to point a prospect to, say, the resale mailing list. If Altium actually did this, the few licenses that were available for resale would be snapped up immediately, the price would rise closer to full price, benefiting both users and Altium. Only if a large number of licenses came on the market, becoming a major fraction of the total licenses being sold, would Altium sales be actually suffering; this strikes me as quite unlikely. Resales are, as far as I know -- and I probably know better than anyone outside of Altium -- quite rare. Maybe one a month, if that.

To say this again, if a prospective buyer went to a resale web site and found that he could resell his license tomorrow at 90% of what he is thinking of paying for it, well .... if it were me, it would make it much, much easier to write the check or give my credit card number. But he is *not* going to sell the license unless he really doesn't need it any more, he will have way too much invested in training.

And if he doesn't need it and he then finds he can't sell it, he is likely to be one unhappy camper. And unhappy campers tell their friends. I remember one OrCAD user who had been conned into spending in excess of $10K for Capture and Layout licenses, and then realized what a pain in the *** it was to use. But he had waiting just a little too long to return it. This guy told every one he knew what a lousy piece of garbage that program was; had he been able to sell it and return a major portion of his investment, he would not have had nearly so much emotional weight on continuing to bad-mouth the program. It is one thing to dislike a program, it is quite another to dislike it and be either forced to use it or eat the loss, both of which are losses. If a CAD company had any sense, it would bend over backwards to satisfy its users, which includes letting disgruntled users go. "Money-back guarantee if you are ever dissatisfied" works in a lot of businesses. Why not with CAD?

If you have sold someone a CAD program, and they have invested three months learning to use it, no way are they going to sell it back to you for a measley 100% of what they paid! -- unless they really don't need any more, perhaps it was a one-person service bureau and he or she was hired by someone full-time and no longer needs the license.....





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