Well, here's my tuppence worth.
Getting into a contractual relationship with any third party is a bit like
getting married. If you don't read the rules carefully before you sign up,
there's no point bitching about it. Every person who has written on this
subject has either personally, or is employed by a company that has signed a
contract with Remedy Corporation or a VAR which states in black and white
what the conditions are. As far as I am aware, the conditions haven't
altered. If you don't like it, don't complain, get a divorce.
John
-----Original Message-----
From: Chris Woyton [mailto:bach@PRIMENET.COM]
Sent: 04, January Thursday, 2001 06:53
To: ARSLIST@LISTSERV.VISTAIT.COM
Subject: Re: Support Renewal
**
Well, Gidd agrees with me anyway. That's worth something. :)
I can certainly see your point Ravi, however, I just want to point out three
things (in the interests of brevity and not beating the thread to death
(then again, it may be dead already (notice the properly nested parentheses,
can you tell I've been in qualification hell for a while?))).
1. Remedy will either get the money some other way (which will hurt the
mid-market users) or stop doing things the way we like them done. (free
upgrades vis a vis paying for new versions, for example). It's just
reasonable business practices to accommodate the adjustment in their revenue
stream.
2. The car/gas analogy really has to go. :) Too many 3rd party providers for
a car. Dare I offer a different analogy? It's more like having a power
company that gives you "free" electricity after you pay the initial hookup
charges. They then charge per person in your household based on some average
per-person consumption rate. Just remember, Remedy is Enterprise Class (no,
not the starship) software. The big stuff costs money, and lots of it.
Compare with Vantive/PeopleSoft/Peregrin, etc. Remedy's entry costs are
CHEAP, and the current fee method gives some scalability.
MS might give away software like Remedy does, but try hitting them up for
support calls. You buy per-call or per-incident, but either way you buy your
support and it's expensive and offers little flexibility.
3. I have to disagree with the improvement curve in the AR System you
mentioned. In my opinion the 4.x platform is a quantum leap over the older
versions. Yes, it's maturing in a lot of ways, but that is the expensive
part of the process.
Remedy is a fairly smart company, and they might react to the mass of public
opinion. This is why I'm trying to be vocal about this issue. If enough
people do, in fact, complain about the license fees, especially if there are
threats of losing market share, they will change. However, that change will
reasonably force them to change the way they do business, for the worse. I,
for one, with only a few minor complaints, like the way they do things now.
I guess that makes $.04. ;)
Thanks!
Chris Woyton
Sr. System Engineer
Allegiant Technology
http://www.allegiant-tech.com
chris@allegiant-tech.com
-----Original Message-----
From: Action Request System discussion list(ARSList)
[mailto:ARSLIST@LISTSERV.VISTAIT.COM]On Behalf Of Ravi Bommareddy
Sent: Wednesday, January 03, 2001 9:20 AM
To: ARSLIST@LISTSERV.VISTAIT.COM
Subject: Re: Support Renewal
Ok, Let me disect what Chris said:
1. Other companies charge for new version
-Remedy's software is in growing stage, so charging for every version is not
worthy. I mean the improvements are minimal.
2. Generous about software media:
-Charging lot on each user and sending 5 bucks media is not generous. You
know
how much it cost to copy CD. Microsoft reselllers do the same for free.
3. Remedy rep was able to transfer the cost of the user licenses to ARWeb
-This is good one. But as a new comer, Remedy is more friendly(part of
sales/business tricks). It's like your New car company is more friendlier
than
old car company ( Say, GM vs. Daewoo )
4. Not to mention unlimited(!!) end-user access via read-only licenses:
- The concept of Helpdesk support apps. is to submit tickets by any of your
employees. No argument!
5. Remedy needs to generate revenue, which is reasonable:
- Everbody agree. But the way they are doing is NOT FAIR. Same car,
diffrerent
charge because I got more kids. When I buying the car, they charged based
no. of
kids I have, PLUS they keep charging the support fee on all my kids. I don't
see
any other company doing this. yeah, every company charge user lic. but not
user
support fee.
6. Small shops pay less than big shops, and you pay for what you use.
- If I drive more miles I'll pay for gas comapny, not to GM.
Take small shop vs. Big shop.
1 year:
small shop pay
cost for one server and one app with 10 lic.(two 5 packs) = 39,000 (12K +
12K +
2x7.5 )
Support cost = 15% of 39K = ~6K
Big shop pay
cost for one server and one app with 200 lic.(forty 5 packs) = 324,000 (12K
+
12K + 40x7.5 )
Support cost = 15% of 324K = ~49k
So, it's 6k vs. 49k!
Eventhough big shop paid 324,000 vs. small shop's 39,000 for initial cost,
big
shop has to pay 43,000 extra every year!
So, after 5 years
Small shop paid : 39,000 + 30,000( support)
Big shop paid : 324,000 + 295,000 (support)
Which doesn't look fair!!!
I agree remedy has to survive!, But some companies will disappear very soon,
if
your cost structure doesn't look logical.
If companies start not to buy the support, It's big loss to Remedy, then
Remedy
has to find out another way to generate more rev.
Either Remedy has to face criticism from customers, which is not good for
Remedy.
Thanks,
ravi
Chris Woyton
on 01/02/2001 06:30:27 PM
Please respond to "Action Request System discussion list(ARSList)"
To: ARSLIST@LISTSERV.VISTAIT.COM
cc: (bcc: Ravi Bommareddy/Det/J Walter Thompson)
Subject: Re: Support Renewal
I have to disagree with the idea that Remedy should stop charging support
fees for user licenses for several reasons.
Other companies, make that almost every other software manufacturer I can
think of, charges for new versions. You buy version 6, when 7 comes out, you
pay for the new version (possibly a lower-priced upgrade fee).
Remedy GIVES the new versions away and all your prior user licenses apply.
When you look at this in terms of per-seat or per-server licensing that
other vendors offer, it's an advantage to have them all wrapped into the
fees. It's essentially like having an 82% discount on all your upgrade
software.
Add to that the fact that Remedy is very generous with the actual software
media. You want a demo copy of something, just call them. Try that with,
say, PeopleSoft...after they're done laughing you'll be told you have to
sign on first, to the tune of several hundred grand possibly, before you
even get to see what you're buying. I've used free software to great effect
in the past (e.g. setting up an NT ARS server to relay Exchange mail when my
main ARS server was on a UNIX platform).
Several times in the past I have purged unnecessary or undeployed Remedy
licenses to lower support costs. They're actually quite good about that, as
well as shuffling licenses around. I had a customer WAY overbuy user
licenses but need a web solution and their Remedy rep was able to transfer
the cost of the user licenses to ARWeb. Very cool, and unprecendented in my
experience in the industry.
Convenient business practices are expensive for a vendor, but I would think
keeping the convenience is more beneficial than stopping paying fees.
Not to mention unlimited(!!) end-user access via read-only licenses. With
careful workflow design, you can turn this into a HUGE advantage by allowing
self-modifiable tickets via the correct Submitter mode. That type of useage
doesn't come completely free either.
Remedy needs to generate revenue, which is reasonable. The only other way of
making money from the software is increasing their user base. Given the
fierce competition, and the assumption that Remedy has nearly saturated
several segments, the revenue starts to dry up. We don't pay the fees, we
start paying full price for upgrades. Not a good thing, in my opinion.
With the maintenance fees as they are, it's based on a percentage of what
you're currently using and scales much better. Small shops pay less than big
shops, and you pay for what you use.
Even if you consider possibly not charging for user licenses, the money
would still have to come from somewhere. That would mean higher maintenance
on server products. The hypothetical result could be the small/mid-sized
shops would get hammered, while the large shops benefit.
Some fictitious numbers, for example:
Small Shop:
1 ARS Server: $12k
10 Fixed Users: $6k
Total: $18k.
Current Support @ 18% = $3240
Server only @ 40% = 4800
Large Shop
1 ARS Server: $12K
100 Fixed Users: $60K
Total: $72K
Current Support @ 18% = $12,960
Server only @ 40% = $4800
As for the tech support, which is arguably of benefit to some folks given
the horror stories that cross the list from time to time, I contend that it
doesn't matter too much how many people actually call. I would challenge any
other *development platform* vendor to actually support their user's custom
applications. That is a very big benefit and can get very expensive. I
propose that an application designed for 100+ users would, on balance, be
significantly more complex than one for 10 users (this is not always true,
obviously, but in an actuarial scenario I think it would be). The larger the
user base, the more potential for support calls, so the higher the fees.
Besides, if your shop is big enough, you can always just not pay the
maintenance and rely on internal talent for troubleshooting. Of course, you
lose the benefits of the maintenance upgrades and such, but it's viable in
some situations.
All in all, even the most stingy IT departments (and believe me, I worked
for the Grand Ebeneezer of them all for a time) recognize the value of
periodic upgrades, current support and financially healthy vendors. A price
reduction, if it makes sense, is always welcome, but I would be reluctant to
support excluding user license fees altogether since it could, quite
reasonably, force several undesired changes in the way Remedy does business.
My $.02. :)
Chris Woyton
Sr. System Engineer
Allegiant Technology
http://www.allegiant-tech.com
chris@allegiant-tech.com
-----Original Message-----
From: Action Request System discussion list(ARSList)
[mailto:ARSLIST@LISTSERV.VISTAIT.COM]On Behalf Of Thurber Mary-LMT002
Sent: Tuesday, January 02, 2001 11:59 AM
To: ARSLIST@LISTSERV.VISTAIT.COM
Subject: Re: Support Renewal
They will still make their money. If they count on it to pay
there support people (or anything in their budget),
they will just increase the support for the servers and admin licenses.
Either way they'll get their money.
My thoughts.
Mary
PS. But I put my "enough is enough" in with you all.
-----Original Message-----
From: Tyrone Dee [mailto:tyrone.dee@solect.com]
Sent: Tuesday, January 02, 2001 1:37 PM
To: 'Thurber Mary-LMT002'; 'ARSLIST@LISTSERV.VISTAIT.COM'
Subject: RE: Support Renewal
Well said.
I think if enough of us (ALL OF US) say to Remedy ... "hey guys / gals -
enough with the charging of support for licenses"! - then perhaps they may
listen.
Ty
-----Original Message-----
From: Thurber Mary-LMT002 [mailto:M.Thurber@motorola.com]
Sent: Tuesday, January 02, 2001 1:34 PM
To: 'tyrone.dee@SOLECT.COM'; 'ARSLIST@LISTSERV.VISTAIT.COM'
Subject: RE: Support Renewal
Must agree on License support fees but the gas analogy isn't quite
there.
It's more like paying 8 times for maintenance for your car because your
2 sisters, 2 brothers, 2 children and the in-laws use it on occasion ==
:-0
Mary
-----Original Message-----
From: Tyrone Dee [mailto:tyrone.dee@SOLECT.COM]
Sent: Tuesday, January 02, 2001 1:11 PM
To: ARSLIST@LISTSERV.VISTAIT.COM
Subject: Support Renewal
We just got our support renewal and I can not believe the amount of
money we have to pay for support on LICENSES. I have no probably with
paying support for the applications and ARS, but I totally disagree with
paying support for LICENSES. That would be like paying for maintenance for
your car everytime you fill up with gas.
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