We have already been told by Allaire sales reps that there will substantial
price increases for hosting companies with hundreds or thousands of
domains/applications and that if we need licenses, the time to buy is now.
This is from your own sales folks.
Allaire has a well established history of announcing a fire sale on the
current partner membership before a major price increase. This is a way to
try and keep the partners from screaming too loud when the price change
comes in and to generate a short spike in partner revenue before that
program price is also increased.
I would love to be surprised by a price decrease across the board for CF
server licenses, but your own sales folks are telling us to buy now before
the price goes up.
Last time during the beta cycle we were promised sand boxing and other
features that would make large scale hosting, ApSP, and shared hosting
systems more secure. Then at the last moment, sand boxing and the other
security enhancements were moved into a new version of software called CF
Enterprise which was not covered by existing maintenance contracts for Pro.
So folks had to scramble for new license agreements and when they did, they
found that the price of CF went up with a five fold increase to some $5,000.
Hence why many hosting companies are still with 4.0 and didn't upgrade to
4.5.
Now taking a page from Microsoft's successful price increase of SQL Server
to processor based and connection based licensing, McAllaire is looking to
do the same thing. We have already heard from MM in past conference calls
with analyst and at meetings about adaptive licensing, tiered licensing, and
increasing license revenue streams. These appear to be code words for, the
price is going up.
The difference is Microsoft has not significant competition or alternative
in the NT SQL market.
ISP's are the backbone for CF deployment and for introducing new developers
to CF. The price should actually be going down for these companies not up.
When ASP and PHP are already free to hosting companies, it means a lot for
hosting companies to spend real dollars to license CF.
I recently watched one of Inline's largest hosting company shelve iHTML
after a major price increase by Inline and there was hardly a whimper from
the customer base. The ISP gave everyone a reasonable period of time to
transition their apps. In the end, they lost just a handful of customers
that said they wanted to stick with iHTML. CF is not invincible in the ISP
market. Allaire can't depend on a huge outcry from customers to force
Hosting companies to keep CF or lose a significant revenue stream. The
stream is not that significant and there are other lower cost and just as
effective options to CF.
What do you expect would happen if an ISP told their customers that ASP and
PHP host pricing will remain the same but the cost of CF hosting will
increase by 25 to 50%? We have some early research that indicates as many as
70% of those customers would opt for the lower price ASP/PHP service rather
than opt for a higher monthly fee for CF. I expect that this number is
probably much higher when you get to the point of actually charging the
persons credit card. There is no significant brand loyalty for CF like you
see in the Apple Macintosh market where you can almost always bank on at
least 8 to 10% buying a Mac.
Allaire-O-Media maybe making a mistake to think that increasing pricing for
hosting partners will have a long term positive effect on the market share
and increased revenues from CF. If CF wants to see a turn around in market
share, the price for hosting needs to come down, not up.
Cheers!
- Steve
-----Original Message-----
From: Ben Forta [mailto:[EMAIL PROTECTED]]
Sent: Friday, April 27, 2001 1:35 PM
To: CF-Talk
Subject: RE: New CF5 Partner Hosting License
Don't panic yet. I believe a FAQ is in the works that will explain all this.
Stay tuned.
--- Ben Forta
-----Original Message-----
From: Zac [mailto:[EMAIL PROTECTED]]
Sent: Friday, April 27, 2001 1:08 PM
To: CF-Talk
Subject: RE: New CF5 Partner Hosting License
> MM could be positioning CF upmarket, abandoning the low-end
> web apps to
> PHP, open source platforms, and ASP, and targetting
> primarily, exclusively
> the corps, not the hosting services, knowing MM can?t run a business
> competing with free open source software, and the equally
> free MS security
> blanket.
And where would that leave smaller developers? Out in the cold or suddenly
finding themselves having to learn PHP?
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