Re: Ridiculous software transfer fees (was EDI and Inovis)

Tier-based pricing makes no sense. Yeah, I know it's the norm in the System i world; don't know about other vendors, but I recall a mainframe colleague saying that IBM uses it (or an equivalent) there, too.


A vendor should be able to calculate what they need to charge per license to make a reasonable profit (or unreasonable, as is their wont). It is unreasonable to think that the same piece of software is worth more on a 570 than on a 520. The only reason that vendors get away with this is (a) because IBM started it, and (b) everyone else does it.


I worked for a software vendor years ago (S/36, not i5). The owner charged the same thing for the software no matter which model you wanted to run it on; in fact it was priced the same on the S/34.


As long as the annual maintenance fees are paid, moving to a different i5 should not result in any charge. Period.


On a related, but slightly different vein, I worked with two vendors last year on product licenses. We have two boxes; one is a backup box that does absolutely nothing but receive backups from the production box periodically. But I needed to be certain that, if we went to the backup box, the software would be available. One vendor said I only needed to pay the full price on one license, but had to paid the annual maintenance on both boxes. Made sense; bought the software. The other vendor wanted to charge full price on both licenses; wouldn't budge. Didn't buy the software.


* Jerry C. Adams
*IBM System i Programmer/Analyst
B&W Wholesale Distributors, Inc.* *
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AGlauser@xxxxxxxxxxxx wrote:

Rich Loeber wrote on 12/07/2007 11:34:33:

I think there is some logic in the tier based pricing model, although

we

have rarely used this model for our business. The thinking goes

along the

lines that the more capacity the system has, the more users there are

and

the more the software gets used as a result. This plays especially

in the

area of support. On a small system with limited capacity, the

software is

used less, there are fewer users and, consequently, there is a lot

less

support required.

Aha! That makes some sense. It's sort of a short-cut way doing user-based pricing. It's always seemed to me that support prices based on number of users makes complete sense, but charging for the software itself makes very little sense. The only argument I can see is that building software that scales well for large numbers of users is more difficult. I also realize that there are other matters involved. Whether or not you can trust customers to accurately report number of users is one. It also seems much easier to charge x% of list for support rather than requiring a specific support contract for each customer.

Then again, who ever said that prices need to make sense?

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