I'm saying this lightheartedly, but there is truth to it:
There is also 'new user' support costs with hardware. Look at any VCR
and try to tell me people understand how to program them. If I sell a
used VCR to someone on ebay (without a manual) the first they they could
do is potentially call the company and start asking questions how to use
it. And THAT is a product that has zero margin for support.
The EDA industry is a joke at times with the policies in place. The
Protel policies that have been in place are a welcome relief to the
(realistically) infrequent occurance of 'used' license sales.
> -----Original Message-----
> From: Abd ul-Rahman Lomax [mailto:[EMAIL PROTECTED]]
> Sent: Tuesday, November 19, 2002 2:36 PM
> To: Protel EDA Forum
> Subject: Re: [PEDA] Fw: 2 of 2 [protel-users-resale] Protel
> 99se for sale?
> 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
> 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
> 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
> 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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