RE: Software Licensing for HA systems

Ron,

I think that the _type_ of software that you are running can make a
tremendous difference in what/how a vendor might expect to be
compensated for your HA machine.

If it is ERP software that runs your business, the vendor might easily
expect that you will not run on the backup box unless a disaster has
occurred and so accommodate you accordingly.  It would not be
unreasonable for them to provide some sort of assurance in writing.
 
If it is system management software (Security, Messaging, Disk
management, etc.) the vendor might expect that you receive value from
this software even when you are running in normal mode.  The backup
machine still needs to be secured, monitored, etc. and so the vendor is
providing value on the HA machine even when it is not the production
machine.

A third type of software is discreet utilities that provide a single
function - and I think those vendors should be careful about pricing
themselves out of the market.  Years ago (and at another job) we had an
EDI vendor hit us with an astronomical price when we proposed to upgrade
our hardware.  They wanted to charge us not only the difference in a P20
to P40 price (reasonable), but they had had a huge price increase since
we originally purchased their software and they wanted to charge us the
difference between what we had paid for a P20 and what they were
currently charging for a P40 license (totally unreasonable!).

As we analyzed the problem, it became apparent that it would be cheaper
to push the files we needed to "EDI" from the big, hurking, production
box (using DDM if I recall) to a little P05 and then just EDI from the
P05.  End result: we got a new machine, and a license for EDI on the
P05, saved about $40K, and the vendor who played hardball got P05
maintenance for future years rather than P40 maintenance.  They simply
priced themselves off of our production machine.

jte


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> -----Original Message-----
> From: midrange-l-bounces@xxxxxxxxxxxx [mailto:midrange-l-
> bounces@xxxxxxxxxxxx] On Behalf Of Ron-
> Zimmerman@xxxxxxxxxxxxxxx
> Sent: Tuesday, February 14, 2006 9:45 AM
> To: Midrange Systems Technical Discussion
> Subject: Re: Software Licensing for HA systems
> 
> Brad,
> 
> I see where you are coming from.  I guess if the vendor is
> concerned about
> their customers illegally using their software, then maybe
> the fee is
> justified.  I'm just not sure that a six figure fee for a
> key to the HA
> copy is really justified.  And yes, the fee for one of our
> vendors will be
> well over $100,000 for the HA copy if that is what we have
> to do.
> 
> Based on everything we are finding out, including the
> responses I have
> received from this list, I think we are going to be
> looking for assurances
> from the vendors that we will be able to get a temporary
> key when needed
> either for testing of our HA fail-over or for real
> emergencies.
> 
> We had just thought that by having a key in place before
> an emergency
> occurred, that would be one less thing to worry about
> during what is
> already a stressful situation when you have to do an
> emergency switch to
> the HA box.
> 
> If the vendors can give us some assurance that we will be
> able to obtain
> the temporary key in a reasonable time frame, then that is
> the direction
> we will be going.
> 
> Thank you,
> Ronald L. Zimmerman
> I.T. Applications Manager
> Swiss Valley Farms, Co.      http://www.swissvalley.com
> "The Good for You Company"
> Email: Ron-Zimmerman@xxxxxxxxxxxxxxx
> 
> 
> 
> "Brad Stone" <brad@xxxxxxxxxxxx>
> Sent by: midrange-l-bounces@xxxxxxxxxxxx
> 02/14/2006 11:00 AM
> Please respond to
> Midrange Systems Technical Discussion <midrange-
> l@xxxxxxxxxxxx>
> 
> 
> To
> Midrange Systems Technical Discussion <midrange-
> l@xxxxxxxxxxxx>
> cc
> 
> Subject
> Re: Software Licensing for HA systems
> 
> 
> 
> 
> 
> 
> Ron,
> 
> As an ISV, here's how I deal with this.
> 
> I give the user two options.
> 
> 1.  In the case of needing to use the HA machine, they can
> easily request a temp key from my site which will
> temporarily allow use of the software (full use).
> 
> 2.  If they wish, for "insurance", they can purchase a
> permanent key for the HA machine at a discount.
> 
> So far users have been split 50/50 between the two
> options,
> so it's not clear what they want as far as my software
> goes.
> 
> Of course, I charge pennies for my software compared to
> others as well as no other fees for maintenance, upgrades,
> support, etc currently.
> 
> So that should also be looked at.
> 
> But, playing devil's advocate, let's say a year or two
> down
> the road you've used your HA machine never, or once
> (except
> for testing).  You have a new requirement that your
> company
> needs an iSeries.  So you use the HA machine because it's
> convenient.
> 
> Now, what's stopping you from using that "free" copy for
> free for now what is production?  That's where to me as an
> ISV it gets hairy, and also why I encourage users to use
> the trial key for HA testing and actual HA machine use.
> It
> takes seconds to get the key, it's good for 30 days and
> can
> be extended if needed.  But, if a situation like the above
> arises, it becomes clear.  :)
> 
> On Mon, 13 Feb 2006 10:55:43 -0600
>  Ron-Zimmerman@xxxxxxxxxxxxxxx wrote:
> > I would like to know the experience of others with their
> > software
> > licensing and how they have responded when they
> > implemented an HA solution
> > such as MIMIX, iTera's ECHO2, etc.
> >
> > As we have started preparing for implementing the ECHO2
> > solution, we
> > contacted all of our software vendors about how we would
> > deal having a
> > second copy of their software on the HA system.  What we
> > have found is
> > that the software vendors' policies range from allowing
> > the second copy
> > for no additional charge all the way to requiring what
> we
> > consider to be
> > an unreasonable additional fee.
> >
> > Our position with the vendors is that the second copy is
> > only used as a
> > disaster recovery backup and we will never be using more
> > than one copy of
> > the software at any one time, so we believe that
> anything
> > more than a very
> > nominal additional charge is unreasonable.  We have two
> > vendors who are
> > asking/requiring a fee equal to 25% of the list price
> for
> > the HA copy of
> > their software which we believe is very excessive.
> >
> > I would like to hear the experience of others and how
> > they have dealt with
> > this situation when they implemented their HA systems.
> >
> > Thank you,
> > Ronald L. Zimmerman
> > I.T. Applications Manager
> > Swiss Valley Farms, Co.      http://www.swissvalley.com
> > "The Good for You Company"
> > Email: Ron-Zimmerman@xxxxxxxxxxxxxxx
> > --
> > This is the Midrange Systems Technical Discussion
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> 
> Bradley V. Stone
> BVS.Tools
> www.bvstools.com
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