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 
> 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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