Re: DB/2 V7 on Z/os V1.11

As I said, with widgets everyone agrees the right price is some markup on
manufacturing costs. With software it is very tough to find a pricing model
that customer perceive as fair. Believe me, vendors want to! No one comes up
with a pricing model based on "boy, this'll really get our sales guys and
gals an earful from customers." The more that customers perceive the pricing
model as fair, the easier the sale.

Charles

-----Original Message-----
From: IBM Mainframe Discussion List [mailto:IBM-MAIN@xxxxxxxxxxx] On Behalf
Of McKown, John
Sent: Monday, August 16, 2010 2:56 PM
To: IBM-MAIN@xxxxxxxxxxx
Subject: Re: DB/2 V7 on Z/os V1.11

I understand and somewhat agree with your logic. What hurts us is that we
upgrade a CPU so that we can run more of software that is written in-house.
And now some vendors want a lump sum "upgrade" fee as well as an increased
monthly license fee. Despite the fact that we aren't using their particular
software more. What I personally dislike is the lump sum "upgrade" payment.
I, personally, can understand the license fee increase (monthly) because I
__might__ use the software more (especially something like CA-7, CA-11, or
CA-1). Yes, I'm particularly thinking of one vendor who will remain
nameless. Upgrade your MSUs and they want a lump sum "upgrade" fee.
Curiously, if you downgrade your MSUs (as we are doing), they don't give a
refund.

--
John McKown
Systems Engineer IV
IT

Administrative Services Group

HealthMarkets®

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-----Original Message-----
From: IBM Mainframe Discussion List
[mailto:IBM-MAIN@xxxxxxxxxxx] On Behalf Of Charles Mills
Sent: Monday, August 16, 2010 1:42 PM
To: IBM-MAIN@xxxxxxxxxxx
Subject: Re: DB/2 V7 on Z/os V1.11

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 1¢ 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-MAIN@xxxxxxxxxxx] On Behalf
Of Paul Gilmartin
Sent: Monday, August 16, 2010 12:57 PM
To: IBM-MAIN@xxxxxxxxxxx
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

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