Network License Agreements
Public-Access Computer Systems Forum
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From: Liz....@p938.f70.n109.z1.fidonet.org (Liz Lane)
Subject: Network Licensing for CD-ROM
Let me put the "standard disclaimer" first; this is *me* talking, not my
employer. I am speaking from the knowledge gained in advising our marketing
department on network pricing and licensing, but I am in no way serving as
an "official spokesperson." These are my ideas alone...
Now, onto Judy Koren's response to my message.
> With respect, she seems to be talking about *simultaneous users* ("between
> 2 and 10") -- which is a case explicitly *excluded* in the passage she
> refers to. The setup I described is specifically *to ensure that only
> one person can use the database at a time*.
Actually, I was talking about two separate issues. The first is the network
environment; as I said, if our product is made available to multiple libraries
via a WAN, it cuts deeply into our product market, and our pricing is
designed to recoup these losses. The second is simultaneous users, which is
a number negotiated separately from the environment.
> If this is "multiple use", we shall soon have a situation where vendors
> attempt to charge a library several times the base price, not just for
> a site license but for a database on a stand-alone machine too, because
> a library is, by definition, not a single-user site.
The issue is not that it is a "single-user" site; the issue is how the
licensing of our CD-ROM product affects the sales of the product, both in
print and in electronic formats. This is not an attempt at price-gouging;
it is an attempt not to shoot ourselves in the foot. Creating and maintaining
electronic products is not cheap; if by doing so we reduce rather than
increase our revenue, the equation just doesn't work, and production shuts
down. We don't charge "several times the base price," but we do charge
substantially more than we do for multiple users on a single-site LAN.
The issue of access to data from multiple sites in a networked library world
has significant impact for librarians and publishers alike. As someone with
a foot in both camps, I am particularly aware of this. But there doesn't seem
to be much of a dialogue on this, just a lot of people all complaining about
the unreasonable expectations (or prices) of the "other side."
I have, in other forums, asked this question: Where should this issue be
discussed and resolved? In professional organizations? On a case-by-case
basis between vendors and customers? Neither seems ideal.
> What makes
> us so sure that whatever a vendor tries to put in a contract is legal
> and however the vendor interprets it is reasonable, whereas our own
> views on the matter are inevitably illegal and unreasonable?
A contract is a contract. If a library doesn't like the terms, it has the
right (and the obligation) to renegotiate them, or refuse to sign them.
Once it's been signed, it's legal. (Publishers pay their lawyers a lot of
money to make sure of that.) Our terms on networks are very clearly stated
in our contracts. Not everybody's are, but it seems to me that "taking it
to court" is probably just going to make the whole process uglier for all
involved. Not all publishers are evil capitalist pigs, y'know. :-) Some
of us are genuinely interested in fair and reasonable licensing agreements.
I'm not trying to be argumentative about this. I'm just trying to make the
reasoning on the publisher's side (or at least *my* view of *this* publisher's
side) a little more clear.
* Elizabeth Lane Telephone: 1-800-638-8380 *
* CD-ROM Support Supervisor Fax: 1-301-654-4033 *
* Congressional Information Service BITNET: TRAV31@UMUC *
* 4520 East-West Highway, Suite 800 Internet: *
* Bethesda, MD 20814 liz....@f70.n109.z1.fidonet.org *
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From: d...@holmes.acc.Virginia.EDU
Subject: Re: Network License Agreements--Response
>From: Liz....@p938.f70.n109.z1.fidonet.org (Liz Lane)
>Subject: Network License Agreements, Part 1
>
>There is a difference between "voicing your feelings on what you think are
>unfair practices" and some of the rather unpleasant rhetoric (not yours,
>Judy) that I've seen, like
[now-notorious examples left out]
While I believe that my points were reasonable, it is clear that I
overstated my case and caused offense. I apologize for any hurt feelings.
Perhaps network engineers are not so civil a lot as librarians, or perhaps
I have just been too many years in the trenches.
David Buchanan
d...@virginia.edu
Public-Access Computer Systems Forum
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Subject: Concurrent Use Licensing
From: mne...@cdplus.com
As the President of CD Plus, a CD-ROM publishing business, I have been
following the discussion on PACS-L regarding database licensing
with great interest. We at CD Plus have had to think through many
of the issues mentioned. I believe there is a solution, and it is
one that is gaining popularity very quickly in the microcomputer
software networking arena: concurrent use licensing (CUL), aka
simultaneous use pricing.
Basically, CUL is a means of pricing multi-user access based on
maximum number of simultaneous users.
CUL provides standard, consistent pricing for the entire spectrum
of potential customers: from the small 100-bed hospital to the
sprawling 30,000-student CWIS.
An important facet of CUL is media independence. Whether the data
is available on CD, floppy, magnetic disk, or any other media is
irrelevant to the pricing. This avoids the nightmare of constant
re-evaluation due to technologies leap-frogging one another.
CUL also eliminates the need for the database producer and customer
to individually negotiate site licenses, which may entail licenses
for hundreds of different institutions for tens of different databases.
An institution ultimately pays for all concurrent use access.
If it wants to offer access to non-affiliated users, the institution
is still paying for that usage. In the extreme case, if a site
wants to open up a database to the entire Internet, the database
producer should have little concern, assuming that the institution will
need to purchase a number of simultaneous usage "slots" to
handle the user base.
CUL has been adopted as the network pricing standard by the MMA
(Microcomputer Managers Association). Those currently supporting
the standard include WordPerfect, Novell and Microsoft. The National
Library of Medicine has also implemented a concurrent use licensing
policy for its databases.
Steve Ifshin, who is with our company, recently wrote a position
paper outlining CUL for database licensing based on the MMA
standard. A version of the paper is to be published in an upcoming
issue of the NFAIS Newsletter. Requests for the position paper
may be addressed privately to sif...@cdplus.com. Please
include your full postal address.
Mark Nelson
CD Plus
333 7th Ave., 6th Floor
New York, NY 10001
212-563-3006
mne...@cdplus.com
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From: Ivy Anderson <ANDE...@BRANDEIS.BITNET>
Subject: Re: Network License Agreements
Liz Lane writes (I'm paraphrasing) that database use by multiple libraries
via a WAN "cuts deeply into the publisher's market, and pricing is designed
to reflect this."
Not necessarily so. To use an example from a meeting I have just attended,
many libraries cannot afford to purchase these databases individually, and
shared purchase is the only possible option. If the shared price is
concomitantly high, we won't be able to afford that either. Vendors
need to distinguish between a theoretical market and an actual market.
I believe a similar argument can be made for CD-ROM databases. Publishers and
producers decry the paucity of their sales and fear further erosion of an
already limited customer base, but their market penetration would be much
higher if the databases were more affordable.
The "real marketplace" understands this -- that's why prices on retail
goods, real estate, etc. drop during a recession. Where are the "sales"
(i.e. bargains) in the library market?
=+=+=+=+=+=+=+=+=+=+=+=+=+=+=+=
Ivy Anderson | Tel: (617) 736-4671 |
Head of Systems and Access Services | Bitnet: anderson@brandeis |
Brandeis University Libraries | Internet: ande...@binah.cc. |
PO Box 9110, Waltham, MA 02254-9110 | brandeis.edu |
Public-Access Computer Systems Forum
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From: "D.E. \"Dave\" Bloomberg" <BLOOMBER@FAUVAX>
Subject: Re: Network Licenses....
In the outside world, developers know that people are going to LANs.
The users are buying products that will run on LANs and have licenses
that are easy to implement; Borland for example, has a site license
with our university so that we have ALL of their products on our WAN.
"Teaching a class in "C"?? What version will you pick?? The one that
the most people have the most access to (Borland)...!!"
No nitpicking....Now there are hundereds of people using many Borland
products. Guess what?? Many of the students who use Borland at school
are going to buy a copy for home too!! (or after they graduate and
go to work at some shop who might possibly be looking to buy some new
software.....) SMART business!!
But the database developers think THEY own the library market. That THEY set
the rules and we bow down to them. I believe that WE make the rules
and if they won't go by our rules, then we go on to the next guy
until we find somebody who will!! If that means that we give up a
service (database)...then that is something that should be dealt
with; If you are tired of being led around by the nose, you must be
willing to make a stand. Look at how IBM tried to maintain
domination of the PC market with Micro-channel (MCA)....(IBM was the only
source for MCA) the users said "HEY IBM, WE don't need Micro-Channel
and we can get clone PC's from Dell, or COMPAQ, or almost anybody else and
they work as good and cost less!!" IBM lost huge amounts of market share
because they were used to making the rules, and didn't listen to the users.
The users made a stand!!
If the database vendors know we NEED some product, they have no
incentive to listen. Anyone ever buy a house...."NEVER fall in love
with a particular house or you'll get taken to the cleaners...."
When we feel there is only one source, we get emotional. THIS IS
BUSINESS (sorry to sound so cold...) THEY know it is, and its time WE
should know it too!!
No, I do not work for Borland...just a real-life example...8-)
My opinions only.
Dave Bloomberg BLOOMBER@FAUVAX
Systems Coordinator BLOO...@ACC.FAU.EDU
S. E. Wimberly Library
Florida Atlantic University
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From: <KINGH@SNYSYRV1>
Subject: RE: Network License Agreements--Response
I support L. Lane's suggestion that we seek fruitful discussion with
each other as information professionals, not as representatives of a
particular interest group or sector. I also think it would be a good
idea to send print-out's of discussion to various vendors, but how would
we organize ourselves so that we all don't send printouts to the same
vendors. How will we know who is sending what to whom?
Hannah King
SUNY Health Science Center Library at Syracuse
kingh@snysyrv12
ki...@vax.cs.hscsyr.edu
kingh@snysyrv1 (not v12 as above)
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From: <KINGH@SNYSYRV1>
Subject: RE: Network License Agreements
In my opinion, those representing the vendor viewpoint on PACS-L need to
speak more specifically on several of the points they've raised. For example,
when vendors state that they will lose money on any network arrangement,even
those that are, though remotely accessible, single-port/single-user arrange-
ments, this should be clarified. If I offer patrons access to a database on
a PC in the library only, the vendor charges x. Why should remote single
user access, which is a convenience to the patron who no longer has to walk
to the library, cost more? The library does not intend to purchase more
of this same database and so there is no loss of customers. And in multi-
branch situations, the patron is often expected to walk to the branch that
has the CD-ROM she desires. Few libraries can afford multiple subscriptions
to CD-ROM databases.
Also, we hear much about the expense of developing CD-ROM databases.
However, mastering the first disk is the major cost in addition to licensing
fees. Each additional disk pressed is cheap. Software development is another
cost, but few CD-ROMs offer truly sophisticated searching ability, which makes
me wonder just how much vendors actually spend themselves on R&D. And, if the
vendor is also the publisher, licensing fees cease to be a cost factor. It's
hard for me to believe that the cost of CD-ROM databases is based on cost
factors, except to set a "bottom-line." I believe that vendors are
experimenting to see what kind of a profit margin they can maintain and will
charge whatever the market will bare. Licensing agreements negotiated with
the inexperienced will therefore be more favorable to a vendor, than
licensing agreements negotiated with those who are more experienced. and
the vendor will likely give very favorable terms to libraries considered
prestigious, because that prestige is good for marketing purposes.
Hannah King
SUNY Health Science Center Library at Syracuse
kingh@snysyrv1
ki...@vax.cs.hscsyr.edu
Public-Access Computer Systems Forum
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From: Liz....@p938.f70.n109.z1.fidonet.org (Liz Lane)
Subject: Network License Agreements
Ivy Anderson writes:
> Liz Lane writes (I'm paraphrasing) that database use by multiple libraries
> via a WAN "cuts deeply into the publisher's market, and pricing is designed
> to reflect this."
>
> Not necessarily so. To use an example from a meeting I have just attended,
> many libraries cannot afford to purchase these databases individually, and
> shared purchase is the only possible option. If the shared price is
> concomitantly high, we won't be able to afford that either. Vendors
> need to distinguish between a theoretical market and an actual market.
Keep in mind that there isn't just one "CD-ROM market," any more than there is
just one "book market." I can't speak for other publishers; we have a very
specialized, high-end product, which has a substantially more limited market
than many of the other databases available on CD-ROM. For this reason, we
have found that the purchase of our product for use in a multi-campus environ-
ment does indeed cut into our *actual*, not theoretical market.
* Elizabeth Lane Telephone: 1-800-638-8380 *
* CD-ROM Support Supervisor Fax: 1-301-654-4033 *
* Congressional Information Service BITNET: TRAV31@UMUC *
* 4520 East-West Highway, Suite 800 Internet: *
* Bethesda, MD 20814 liz....@f70.n109.z1.fidonet.org *
*-----
From: "ACAD1A::JFMRH" <JFMRH@ALASKA>
Subject: Re: Network License Agreements
The advice regarding negotiation of contracts and the vendors charging
all they feel the market will bare is born out in an anecdotal way by
a recent discussion I had with a potential vendor of a tape load
product that we were looking at for the consortium of which the
University of Alaska in Juneau is part. I described the setting and
was told the product would cost us $16,000. My reply was basically that
we were wasting each other's time. When asked how far off they were.
I told her at least one zero too many. They came back in ten minutes
with a quote of $6,000! Tell me that their prices reflect a rational
approach to the cost of doing business plus a reasonable profit margin!
Mike Herbison
Univ of Ak Juneau
JF...@ACAD1.ALASKA.EDU
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From: Silver Platter Information <00050...@mcimail.com>
Subject: Network License Agreements
SilverPlatter is listening to all the discussions about
pricing policies, network use, site licenses, and so on.
These conversations are extremely helpful to us, even those
that may be critical of us.
We are still striving to reach clarity on this issue.
We are discussing this internally, weighing all sides -
ours, yours, and the over 50 different Information Providers
we represent. Your conversations are flavoring our
decisions.
We will continue to monitor the network for your input.
But we feel it is inappropriate to discuss making company
policy decisions in a public forum. When we have
reached a decision on this issue, we will communicate it
through appropriate channels.
In the meantime, we strongly encourage you to continue
these conversations. And, if you would like to contact us
directly, please do so by writing to:
Susan Bergman
SilverPlatter Information
1005 N. Glebe Rd., Suite 605
Arlington, VA 22201
We value your concerns, are grateful for your participation
in these disscussions, and assure you that we are listening.
--Elizabeth Morley
Communications Manager
SilverPlatter Information
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From: Liz....@p938.f70.n109.z1.fidonet.org (Liz Lane)
Subject: Network License Agreements
I'm starting to feel awfully lonely out here, but I suppose I ought to
continue with what I've started...
> But the database developers think THEY own the library market.
Actually, speaking only for myself of course, I think that we own the data
that we've spend many hours to produce. That's all we own. The rest is up
to our customers, potential or actual. If they don't think the data is
worth what we ask for it, they don't buy it. It's a pretty simple proposition.
No megalomania. Just economics.
> If the database vendors know we NEED some product, they have no
> incentive to listen. Anyone ever buy a house...."NEVER fall in love
> with a particular house or you'll get taken to the cleaners...."
> When we feel there is only one source, we get emotional. THIS IS
> BUSINESS (sorry to sound so cold...) THEY know it is, and its time WE
> should know it too!!
Some data--the CIS Masterfiles, for example--are only available from one
source.
The reason? It's pretty expensive to produce, and nobody else has seen a way
to do it for less than we charge.
> when vendors state that they will lose money on any network arrangement,even
> those that are, though remotely accessible, single-port/single-user arrange-
> ments, this should be clarified. If I offer patrons access to a database on
> a PC in the library only, the vendor charges x. Why should remote single
> user access, which is a convenience to the patron who no longer has to walk
> to the library, cost more? The library does not intend to purchase more
> of this same database and so there is no loss of customers. And in multi-
> branch situations, the patron is often expected to walk to the branch that
> has the CD-ROM she desires. Few libraries can afford multiple subscriptions
> to CD-ROM databases.
I think I've already addressed this in some detail, but let me try again. I
am speaking *only* about our products. In many cases, we sell copies of our
print, microform, and CD product to more than one library in a campus system.
(The nature of our product is such that very few public or special libraries
purchase it.) If we in the past have sold our data to the law library and the
graduate library at a single school (very common), and the WAN at that campus
makes the data available to both libraries, we lose a sale. That's the
specific situation to which I refer. Not a theoretical case, but a real one.
> Also, we hear much about the expense of developing CD-ROM databases.
> However, mastering the first disk is the major cost in addition to licensing
> fees. Each additional disk pressed is cheap. Software development is
another
> cost, but few CD-ROMs offer truly sophisticated searching ability, which
makes
> me wonder just how much vendors actually spend themselves on R&D. And, if
the
> vendor is also the publisher, licensing fees cease to be a cost factor. It's
> hard for me to believe that the cost of CD-ROM databases is based on cost
> factors, except to set a "bottom-line."
You've mentioned only a few of the costs associated with putting out a formerly
print-based product in electronic form. In our case, we maintain a staff of
five people who are solely devoted to maintaining and supporting the CD-ROM
product. And that's for a relatively small installed base. In addition, each
of our products required at minimum one year of development, with resources
from our programmers, our support department (online and printed
documentation),
our editorial department, our marketing department, and our art department,
before we could even ship the first disc. Those *substantial* development
costs need to be recouped. The cost of mastering and duplicating the disk is
a negligible piece of what it costs to maintain data in electronic format,
particularly when the data was not initially set up in a way to facilitate
that type of access. Many database producers *license* their retrieval
software,
rather than developing their own (a *huge* task, even for "limited" capability
software), so we're paying royalties on each disc we sell.
> I believe that vendors are
> experimenting to see what kind of a profit margin they can maintain and will
> charge whatever the market will bare.
Welcome to the wonderful world of capitalism. What makes you think that
publishers will act any differently than clothing designers or real estate
agents when it comes to "charging what the market will bear?"