RE: OGS pricing and INFINIUM -- BPCS-L

I think as customers we often over look a critical issue facing every
software firm - revenue.  More precisely steady revenue.

Without revenue the firm dies - period.  Case in point?  How about SSA!

How much revenue is needed?  Assuming the 1,400 head count SSAGT is claiming
is valid and the total payroll cost (salary, benefits, taxes) per individual
is $75,000 US (probably a bit low),  SSAGT needs to generate $105,000,000 US
annually just to keep the lights on and avoid layoffs.

The challenge facing all ERP vendors over the past 2 years has been the
dearth of new account sales.  To give you an example:  SAP's sales in 2000
were off by 40% over those booked in 1999.  In 2001 their sales were off 80%
over 2000.  Apply these kinds of numbers to SSA GT and I think you can
appreciate the impact on revenue from the down turn in new account sales.
Specifically:  assume 100 new account sales in 1999.  The new account sales
booked in 2001 would have been 12!  Yes, 12 new accounts in 2001.

So if new account bookings are not supplying the revenue it is obvious where
SSAGT will turn to get the dollars necessary to support the customer base -
support and maintenance charges.

So how does this relate to the acquisition of other software firms?

By expanding the customer base the opportunity for support and maintenance
revenue is expanded.  And if you can eliminate duplicate costs (facilities,
administration, sales reps) then the margin on the maintenance revenue is
enhanced.

One last point:  if you expect your enterprise software vendor to be around
for the duration then support and maintenance charges are your insurance.
Without this revenue stream the software vendor simply disappears.  And I
speak from personal experience, times 4.


Roy Luce

Main:   847-540-9635
Cell:   847-910-0884
Fax:    208-330-9032
Email:  lwl@ix.netcom.com

-----Original Message-----
From: bpcs-l-admin@midrange.com [mailto:bpcs-l-admin@midrange.com]On Behalf
Of Al Mac
Sent: Tuesday, October 29, 2002 11:08 AM
To: bpcs-l@midrange.com
Subject: Re: OGS pricing

Peter

There are many companies running a version of BPCS which is no longer
supported by SSA.  How do they get their KEY?  They CANNOT get OSG or BMRs
because their version of BPCS is no longer supported by SSA.  When they
upgrade their machine, they need a KEY to continue to operate that version
of BPCS.  I am sure that someone in the SSA know will be posting a
clarification to this thread, regarding some of the questions we have been
discussing.

In times past, with my employer dealing with SSA, the KEY has been handled
separately and independently from OSG, and also from the number of users
LICENSE to use BPCS.  In times past, we have talked to someone at SSA who
was on some kind of a time constraint, in which if the contract could be
booked in a particular month of SSA fiscal year, it would be much better
for them, so they willing to negotiate a lower price if we sign the
contract sooner.

Sometimes they issue a key that does not work, so you basically have to ask
for several temporary keys in case you are doing an upgrade outside regular
business support hours, and try to apply the key and discover it not
working.  Then after BPCS is running on a temporary key (which expires in a
few days) you get a permanent key.

Currently we are getting our tech support from a place other than SSA.  The
KEY came from SSA, and we have the LICENSE to operate BPCS for a certain
number of users.  I anticipate that when we replace our AS/400 with another
box, we will have to pay SSA some Fee to get the KEY for the new box.  I am
hoping that my management finds out what that Fee is going to be before
signing any contracts with IBM for the new box, because depending on what
the Fee will be, they might want to delay our move to the next box.  I have
no idea what the Fee will be.  It could be thousands of dollars, under the
new policy.  I am sure that someone in the SSA know will be posting a
clarification to this thread.

Kanukurti Rao and vincent.byrne ask good questions.

For disaster recovery testing, there would have to be negotiations with SSA
in advance, with respect to what we planning to do, and the serial number
of the test machine.  SSA would have the right to charge a Fee for the
temporary KEY needed to test BPCS on the disaster recovery testing machine
at the other site.  Cindy Wilson's company could do disaster recovery
testing, but not BPCS because the fee that SSA wanted to charge was a
higher price than the company was willing to pay for the peace of mind of
knowing that their disaster recovery plan would actually work for BPCS.  I
am sure that someone in the SSA know will be posting a clarification to
this thread.

Yes, if Rao's company does in fact move to a DIFFERENT AS/400 that has a
DIFFERENT CPU then the KEY is for the serial number of the OLD AS/400.  I
believe it is possible to buy more CPW for the existing machine, so that
under past contracts, no new KEY is needed, but contracts evolve and people
can lose track of the nuances.  Many years ago we were on a contract with
SSA that said BPCS was paid for so long as we remained on the S/36, so then
we moved to Advanced S/36, and there was a contract conflict.  SSA had a
big bill.  Management said Advanced S/36 was still BPCS on 36.  I felt SSA
had a legitimate point because we were getting much more value out of BPCS
on AS/36 than on S/36.  That fight was resolved, but I could see the same
kind of battle over CPW.  I believe lot of differences with CPW, but you
know it depends on how the SSA contract is phrased and interpreted.  Not
all SSA customers have the identical contracts.  I would not be surprised
if some contracts are based on some machine particulars in addition to
model and serial #.

>Hi,
>
>Al, thanks for explanation.
>
>If me knowledge is well, Raos BPCS will not work on new machine with old
>key.
>He must ask SSA to generate new key, and SSA will say SORRY You must
>have OGS.
>
>This is me point of view, me understanding off SSA Key policy.
>
>Regards
>Peter
>
>Kanukurti Rao wrote:
> >
> > We are currently running BPCS Ver 6.02 on AS/400 Model 9406/820.
> > Our OGS has just expired and the management has decided not to renew the
> > same.
> >
> > But we may upgrade the AS/400 to higher capacity but with in the same
model
> > 820.
> >
> >      Processor CPW  : 600CPW.  [ Current =370 CPW].
> >      Interactive CPW     : 240 CPW. [ Current =120 CPW].
> >
> > Would the same BPCS key (of the existing model) work?
> > Could some one advice?
> >
> > Rgds
> >
> > Rao K.R.
> >

-
Al Macintyre (macwheel99@sigecom.net via Eudora)
Al's diary http://radio.weblogs.com/0107846/
Cure cancer. http://members.ud.com/about/



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