Deprecated: Function set_magic_quotes_runtime() is deprecated in /home/mwexler/public_html/tp/textpattern/lib/txplib_db.php on line 14
The Net Takeaway: Pay Per Person in Crystal?


Danny Flamberg's Blog
Danny has been marketing for a while, and his articles and work reflect great understanding of data driven marketing.

Eric Peterson the Demystifier
Eric gets metrics, analytics, interactive, and the real world. His advice is worth taking...

Geeking with Greg
Greg Linden created Amazon's recommendation system, so imagine what can write about...

Ned Batchelder's Blog
Ned just finds and writes interesting things. I don't know how he does it.

R at LoyaltyMatrix
Jim Porzak tells of his real-life use of R for marketing analysis.






Pay Per Person in Crystal? · 09/28/2004 03:50 PM, Analysis

I am getting a bit sick of abusive licensing. I have griped elsewhere about the sheer audacity of companies who charge by volume of data processed using their software on your systems. A case in point is Pilot Software which makes, among other things, a web site analysis tool. Now, if it were an ASP, and they were using image tags on my site and then processing the data on their expensive servers, then I could see how they would charge me per volume of page views.

Only they have the guts to charge per volume for a tool you run on your own server. That's right: you pay licensing fees for the OS and the database, maintenance for the hardware, even power costs... and then Pilot requires an audit of the data you process through their tool on your own systems and charge you based on that. I find this unbelievable. Should I pay MS for Word by the word? How about SPSS per data point or calculation? What a joke, right?

In other obnoxious things, reporting software Crystal (now part of Business Objects) now believes that its output is still its property, even if its emailed. Ed at Infoworld writes that a reader wrote to him: "It does appear in the Crystal version 9 license that you are limited to 10 users that you can e-mail to for every concurrent access license (CAL) you have."

So, this means that even though a user is not using the product concurrently (that is, they are not generating a report, just reading it), you can only mail to 10 users. Of course, the user was not made aware of this when evaluating the product (similar to how Pilot works, btw: always ask!). Brings up the meaning of the word "use" and "access", words that I thought were already pretty clear. I seem to be pretty wrong, at least legally.

It is amazing how products try to restrict how I use them. If I am using your resources, then you deserve some aspect of pay per use. But if I'm licensing your bits to run on my hardware, you have no business telling me how to run my business. Survey companies try to charge per submission... to surveys running on my hardware. Analytic tool vendors try to charge me different pricing because I analyze other's data instead of my enterprise's.

Let's take the tool analogy one step further. If I buy a hammer for use around the house, I may buy a very affordable one. I can use it for 24/7 construction, but it won't last. I won't pay per use, but it won't scale. Now, I can buy a really nice hammer, a professional grade one. It will cost more, but it will last me until I need new features (handles which absorb vibration, for example). I won't pay per use, because I paid more up front. And I don't get additional features for free, I have to buy a new hammer. And I can give it to a friend, but I can't use it at the same time.

What part of this model doesn't make sense in today's market? Oh, the part I left out about "take every penny you can while you can".

Lifetime value is far more important than short-term earnings at the expense of churn. And the smaller your market (Crystal is big in the reporting space, but a joke compared to MS Office), the mre true this becomes. The value of my continued payment of your licensing fees, recommendations, and public support is far more important than a short time boost in fees for a quarter... because now you have to go acquire new ones to replace the ones you pissed off. Its like someone telling you "You can have $1 doubled every year but you can't spend it til 5 years out, or just take $5 each year and enjoy it". Sure seems smart to let the money grow with happy customers, right?

I understand the future of the pay-per-use media such as digital music and movies. I understand that software companies have to make their money. But restricting use is the best way to start a customer looking for a new solution.

You don't have to be an analyst, or even a marketing expert to understand this.

Takeaway: If you believe your customer is "locked in" and you can institute abusive licenses... that's your first sign that the customer is already accepting bids to replace you.

* * *


  Textile Help
Please note that your email will be obfuscated via entities, so its ok to put a real one if you feel like it...

powered by Textpattern 4.0.4 (r1956)