Anyone who thinks that owning a software company is a license to print money: you're free to start one of your own. Ask Dave Salt or any of the other software entrepreneurs who hang out here just how obscene their profits are.
Everyone rails against capacity pricing, but what's the alternative? When I started selling Outbound in 1988 my first plan was to charge everyone $24,000 no matter how big their processor was. Didn't work. We priced ourselves out of the market for the smaller shops, and left ourselves without the resources to compete with the $100,000 products at the bigger shops. Yes, the best thing would be pricing on a "business" metric (transactions, basically) rather that a "computer" metric (MIPS, etc.) but IBM has not made it easy to do that. We did in fact go to exactly what Gil suggests. We stopped saying that a Group 80 machine was more than a Group 18 machine. Instead, we said "the product is $60,000 ... oh, you have a Group 18 machine? Great, you get a 75% discount." People loved it. I don't know why every vendor doesn't do it that way. When you are selling a tangible product like widgets, it's easy for the customers to understand that it costs you $1 to make each widget so you sell it for $2. It's harder for people to grasp your pricing when it costs you $1 million to engineer a product, and then 1ยข each time people download it. What's a fair price? Okay, we won't charge for upgrades and we won't charge for bigger CPUs and we won't charge for multiple CPUs. Exactly what WOULD you have us charge for so we can pay those darned programmers, not to mention the landlord, the power company, and the tax man? Charles -----Original Message----- From: IBM Mainframe Discussion List [mailto:ibm-m...@bama.ua.edu] On Behalf Of Paul Gilmartin Sent: Monday, August 16, 2010 12:57 PM To: IBM-MAIN@bama.ua.edu Subject: Re: DB/2 V7 on Z/os V1.11 On Mon, 16 Aug 2010 02:24:30 -0500, Brian Westerman wrote: >That's another problem that people point out when they contact me. I can't >believe some of the prices that companies charge for their "upgrades". I >still have a problem understanding why it should cost more to run a product >on a faster machine than on a slower one. I think someone in IBM marketing >thought that it might take more people resources (or maybe smarter/more >expensive ones) to support the same software on a fast machine. > Take the opposite perspective, that you're getting a discount for the slower machine rather than paying a premium for the faster. And regardless, it makes more sense than the specialty engines where you pay less to run on the (sometimes) faster processor. And why should it cost more to run a product on several systems than on one system? The vendors do their best to make a profit while being fair (except ---------------------------------------------------------------------- For IBM-MAIN subscribe / signoff / archive access instructions, send email to lists...@bama.ua.edu with the message: GET IBM-MAIN INFO Search the archives at http://bama.ua.edu/archives/ibm-main.html
