Does anyone else recall other thinking behind this pricing model?
There's also some logic that says the larger (not the largest, but let's
say the middle tiers) pay what's "right" for the software, the largest
tiers pay a little extra, and the smallest guys pay less than they
should, but this way they can get the software. Effectively it's like
taxes, the more you have the more you pay, its progressive. :)
Sounds like the EDI software in question was tier based, just not IBM's
definition of a tier. The software company chose CPW as the tier. I'm
not defending the idea, but I can understand it. Some fault lies w/the
buyer, they should have understood/negotiated the definition of a tier.
A software company has to make money, and it has to protect itself. OK,
this is worse-case, but what happens if... Software product X. Cost on
smallest tier, 15K. Cost on largest Tier 100K. A company has a 595 and
wants the software... cost 100K. Instead, the company buys a tiny System
i (cost 15K), and licenses the software on that box (another 15K). If
there were no transfer charges then the company would have spent 30K for
100K in software.
The real trick to tier based pricing is deciding what's the tier based
on. Each software product is different. For EDI software, perhaps the
right number is transactions processed. If you do 10 EDI transactions a
month it's 5K, if you do 10,000 a month is 50K?? Then if you start at 10
transactions but your business grows you pay more, but you're getting
more. If you simply upgrade your system to a larger one to support some
other application, but you're not using the EDI software any more, you
don't pay more.
-Walden
--
Walden H Leverich III
Tech Software
(516) 627-3800 x3051
WaldenL@xxxxxxxxxxxxxxx
http://www.TechSoftInc.com
Quiquid latine dictum sit altum viditur.
(Whatever is said in Latin seems profound.)
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