jaro
...@gmail.com wrote:
> This complaint about pricing comes up a fair amount...
> 3) Following from (2) come questions about the way we price. Simply
> put, the model people say they want - one time developer licenses,
> followed by unlimited use - has been tried. You'll note that ParcPlace
> (and descendents) went broke using that model. You'll also note that
> Borland has been driven pretty close to bankruptcy on that model. The
> sad fact is, that model just doesn't work. Using it leads to either
> -- tiny engineering groups who's job is to simply maintain the product
> -- death of the product and/or the company selling that way
other fields apart from software. I recently got taken to dinner by
customers of customers of VW. I won't tell you who the company is but
it is a provider of semiconductor manufacturing equipment and a
ControlWORKS user. Their typical machine sells for a few million
dollars each. Machines tend to stay in use for a long time (10 to 15
years).
What surprised me is that the company does not find depending on the
up-front cost of the machine a sustainable business model and instead
arranges that about 60% of its revenue comes from services, specifically
maintaining and upgrading the machine over its life, plus training and
mentoring in using the machine (which can include learning Smalltalk and
ControlWORKS programming).
When I bought a new car last year I talked to one of the senior sales
staff at the dealer in San Francisco. They said that the dealership
makes essentially zero dollars on the sale of the car since new car
prices are quite competitive. I believe him in my case because we
bought a year's end model with a $4,000 discount. Instead the
dealership makes its money through servicing, both in revenue from the
car owner and in subsidies from the car manufacturer. Apparently the
dealership receives moneys from the manufacturer in an ammount dependent
on the dealership's customer satisfaction rating. The net result is
that when my son twisted off the rear-view mirror of the car while I was
vacuuming it and he was getting bored, the dealership fixed the mirror
under guarantee since we'd naturally rate them highly for doing so.
When Cincom bought me a new 64-bit laptop a few years back it came
loaded with the most obnoxious feature I've ever seen. When a search
(e.g. for files) in the WinXP finder failed I was presented by a series
of alternative searches more likely to succeed. Except that these
searches were for things like vacations, new cars, etc. i.e. my new
laptop is a medium for advertizing. I saw a web page related to this
that was aimed at people marketing through the laptop. Essentially
computers are now sold at or near cost and revenue accrues through
services (support) and response to advertizing (including portal
memberships like AOL).
Now the last example I find obnoxious, but the first two seem perfectly
reasonable to me. The Cincom pricing model is all too common, makes
sound business sense, and hence underlies VW's continued availability
and evolution. How many people wanting to produce commercial products
with Cincom Smalltalk don't want to be paid for their product?
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Eliot Miranda Smalltalk - Scene not herd
