Re: 515 and 525 user licensing

[Larry Bolhuis <lbolhuis@xxxxxxxxxx>]

Jerry you are right on. The Software folks MUST get their pricing in 
line with these new machines or they won't work. Over the years some 
have done a good job, other silly. JBA for one went to a 'per user 
price' model at one point. Very nice. The dirty rotten secret: A minimum 
number of users for each iSeries model and it was NOT a small number! 
Nice. User based pricing for them was the best of both worlds (for 
them!)  Too many software vendors today still look at raw CPU only with 
no consideration of actual use. One of our customer went from a 1000cpw 
520 to a 2400cpw machine last year. (The smallest available upgrade). 
One of their software vendors wanted TWICE the cost of the hardware just 
for the software UPcharge. (Not to mention a much larger AMC) The vendor 
lost the customer completely.  EDI software was a huge one for some 
time, you may only have a couple trading partners doing a few 
transactions but that 840 price is still big six figures purely because 
of tier. We had a couple customers with tiny model 200s that hung around 
for some time just to run EDI because on that box the software was cheap.

Because the System i and ALL it's predecessors do such a great job of 
running multiple applications simultaneously you would have thought that 
by now the ISVs would all have happily come up with a reasonable way to 
price by user or usage NOT simply based on the maximum users a 
particular model can support.  I want the software vendors to make money 
so they'll stick around and enhance their software but to do that they 
need to price so the customer can afford the software.

Bottom line is that the ISVs absolutely need to come up with a 
competitive price for their software on the small machines that is NOT 
based on raw CPW. Otherwise the 515 gets the same price as a base 550! 
That will make 515 sales crumple faster Trevor's beetle in the rain!

- Larry

Jerry Adams wrote:
> I thought that the whole purpose of the 515 and 525 models was to be 
> able to sell to the smaaall business.  Companies like my sister's: 3 
> employees (sometimes 4 when I feel like slumming).  Maybe I just 
> misunderstood the business model here.
>
>
> But, even if my presumption is correct, it still isn't going to work 
> unless the software vendors don't adjust their pricing accordingly.  I 
> worked for a software vendor (in an earlier incarnation).  The price of 
> the package (S/36) was $36k.  Didn't matter if you were the 5th largest 
> company in the world in the industry (which was one of our clients) or 
> some guy operating a backhoe - the price was still $36k.
>
>
> The tiered pricing on the AS/400 changed that somewhat, but the 
> assumption that a company running a P20 was bigger (and more able to 
> pay) than a P10 company wasn't necessarily true.  I don't know how, but 
> in order for tis to work, the value-add vendors are going to have to 
> bring themselves in line with the new model.  Is it better business to 
> try to sell 1 glass of lemonade for $1,000,000 or a million glasses for 
> $1 each?  Both are pretty touch, though the latter seems to have more 
> potential.
>
>
>         * Jerry C. Adams
> *IBM System i5/iSeries Programmer/Analyst
> B&W Wholesale Distributors, Inc.* *
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>         615.995.7024
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>         615.995.1201
> email
>         jerry@xxxxxxxxxxxxxxx <mailto:jerry@xxxxxxxxxxxxxxx>
>