RE: 5.1 upgrade

["Goodbar, Loyd (AFS-Water Valley)" <LGoodbar@xxxxxxxxxxxxxx>]

Buck,

No offense intended, but you can use a dump truck for 15-20+ years. IBM is
discontinuing software that is two years old (V4R5 in our case). Both are
significant investments.

I think the problem is we know enough about material assets to say how long
they can last, but not software. I have a tooling machine that is rated X
parts per hour with a duty cycle of Y, we can reasonably expect it to run
for Z years until replacement. Where is this for software?

One can also directly attribute a material asset to sales and the bottom
line. Again, business metrics for software are lacking. (Note, I am not
talking about the "cost" to write software for sale, but the cost or benefit
of using software in a business.)

BTW, we do use software subscription and are on active maintenance on
virtually all of our software. I am not slamming, but am trying to point out
the differences between software and other assets.

Loyd


-----Original Message-----
From: Buck Calabro [mailto:Buck.Calabro@commsoft.net]
Sent: Friday, August 16, 2002 2:42 PM
To: midrange-l@midrange.com
Subject: RE: 5.1 upgrade

>Clearly people would upgrade and pay substantial
>amounts for software subscription if they were
>getting value out of it.

Working for a software vendor, I can tell you that this is simply not true.
People treat software very differently from other assets of the business. No
business I know would remotely think that they have to buy a truck just once
and never replace it.  But these same businesses revolt at paying an upgrade
or support fee for software.  It matters not one whit that their entire
business runs on iSeries and on our software, and that their business would
literally stop if the iSeries went down or our software stopped working.  We
have had customers stop paying support because they simply didn't see the
value in paying to have us here to answer questions and fix problems and
enhance the software.  Our software is just as critical to their operations
as electric power.  Oddly enough, they never think of 'going off support'
from the power company.

I think the different treatment software receives is because it is simply
not a large physical thing like a warehouse, truck or a forklift.  If we
delivered our software in dump trucks I think our customers would be happier
to pay for it.
  --buck