RE: Tierred pricing (was Tiger tools...)

[Jim Damato <jdamato@xxxxxxxxxxxxxxxxx>]

> Leif:
>also, if you purchase any extra interactive CPW you move up a processor
tier
>automatically. No logic here, just plain ole greed, but hey, such is
>business.

One that always frosted me was an EDI software vendor (mentioned elsewhere)
that tier priced by Interactive CPW.  Huh?  EDI is largely a batch process.
As you grow your business or EDI functions you may need to ramp up from one
to two to three EDI coordinators actually accessing the software's
administrators screens.  The rest has little to do with interactive
capacity.  The pricing model was either created by someone who didn't
understand the technology, or it was based on the "because they can"
principle.  It makes me wonder when they're going to add main memory to the
pricing equation.

We had a retail merchandising system with a tier pricing "grid".  They had
rows by number of stores and columns by processor.  So if you grew your
business by a hundred stores you had to upgrade your merchandising software
tier.  Then you'd find you needed more horsepower to support the processing
burden for more stores.  The subsequent hardware upgrade would again require
a tier charge.  The price model was unpopular enough to inspire pricing by
sales volume.

I've seen so many cases where businesses are forced to pay a premium for
consolidating many software packages on one large AS/400.  Why should I have
to pay more for my time card software if I'm running it on the same machine
as my HR/Financials?  I can remember a company finding it more cost
effective to buy a small AS/400 for JD Edwards than pay to license it on a
larger server with other apps.

I agree with Tom's analysis:  "The software houses are too lazy to develop
their own tiering model, so they
ride on IBM's."  This hit home when the P40 processors were introduced and
we had to upgrade our EDI tier.  P40 models were brand new, so they faxed us
the hot off the presses pricing sheet for our same version of software.  It
was the same as the previous sheet, but with a line added for P40's.  I
thought, "OK, they're selling the same software, and they get to charge
thousands of dollars more having done no work of their own -- because IBM
has completed R&D on new processors and developed a new OS version this
vendor now has an opportunity to charge people more money than ever."  Those
folks who used CPW as a multiplier in their price structure ended up with
some pretty silly prices as AS/400 models were introduced with double and
triple the CPW of previous model lines.

Waah.

-Jim

James P. Damato
Manager - Technical Administration
Dollar General Corporation
<mailto:jdamato@dollargeneral.com>