Author Topic: Bentley, Schmentley!  (Read 17719 times)

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M-dub

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Re: Bentley, Schmentley!
« Reply #15 on: June 09, 2008, 09:16:10 PM »
I don't have the numbers with me and I've read so many now that I can't remember what they are, but we figured out that it would take 12 years of NOT buying an upgrade of AutoCAD to justify NOT going with subscription.  Meaning the cost of subscription would take 12 years to accumulate and equal the price of a seat of AutoCAD.  Now, for some reason, I was surprised by this, thinking that a number was off somewhere, but I don't think so.  NOW, the numbers were different for LT and Raster Design...

Bentley, on the other hand... If one seat of Microstation is over $6100 and Select is $940 / year, that means that if you wait 6 - 7 years between upgrades and DON'T keep your Select fees up to date, you'll be about the same.  Any sooner and it just pays to stay on Select.

So, in theory, it is twice as cost efficient to be on the subscription program with Autodesk as it is to be on Select with Bentley.  Based on numbers we were quoted, anyway.

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Re: Bentley, Schmentley!
« Reply #16 on: June 09, 2008, 09:23:13 PM »
What is Select?  Bentley's version a Subscription?
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M-dub

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Re: Bentley, Schmentley!
« Reply #17 on: June 09, 2008, 09:25:43 PM »
What is Select?  Bentley's version a Subscription?

Yessir and their version of a network license is called a "perpetual license"

mjfarrell

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Re: Bentley, Schmentley!
« Reply #18 on: June 09, 2008, 10:24:35 PM »
What is Select?  Bentley's version a Subscription?

Yessir and their version of a network license is called a "perpetual license"

Lets use a pizza analogy here (I know software and pizza are not equal)

Subscription is a great idea for LOCKING your customer into their software decision.

Think about it, you walk into my pizza place, and order a pizza.
Then I force you to subscribe (by making it appear cost effective) by making it sound like paying for your next pizza from me is a good deal. Because your next pizza is going to cost you more than this one if you don't.
Then you get the pizza, and well it just isn't that good.
So you leave thingking the next one must be better.
The good news for me is,I have your money for the next pizza wether you eat it or not.
I also have your money even if you don't like the pizza.
For you the customer, then next time you think about a pizza, you come to me.
Why? Well it isn't because the pizza is any good, it's because I already have your money
and you keep thinking its a good deal. Why because the salesmen and the marketing folks have you believing it is a good deal.

This is how it works, they have convinced you that it is a good deal. It isn't, given that in most instances companies do not install the new version they paid for. No matter how much you think you saved you didn't.
Worse because you have bought in to this model, you remove the market incentive to produce a better product.
And because they have you money already they do not care if the market hates the new product. Because they have your money, and you do not matter after that.

A 'fair' practice would be more or less along these lines:


The cost of the product is whatever it is.

A new version will only be released when new tools or increased functionality is added to the product, and the product will remain compatible with itself so that version compatibility is not an issue.


When a new version is released, new customers pay full price.

Now here's the fair part:

Current users that have contributed to product development through involvement with the BETA team, and or active feedback with development team. (Error reports, emails, etc.) they get the product at 25%. Because they have helped develop the new thing I am selling. This way I am paying them for testing and suffering through the new stuff.

Users that upgrade after one (1) year of ownership or less without helping on product development they get the product at 35%.

Users that upgrade after two years get the product at 40%

Users that upgrade after 4 years get the product at 70%.

Users that do not upgrade after 5 years, are telling you that your product has no compelling reason for them to upgrade. And then you know that you need to work on a better product. Not a new interface, or forced file format change to make them upgrade. Either your product does all that they need, or your new product does not meet their needs or expectations.

If users want or need support, that is a different fee.

If a user wants to be in an active update mode, where they get any and all new features and or functions the instant they pass beta (subscription), they then pay Full price for the initial version PLUS 15%, with 15% of the new price each year thereafter.


I think that if you 'do the math' the software company still makes money on this arrangement, and the customer gets a better product.

As it stands no one can not say that their ROI, of any autodesk product is 100% the first time they use it.
Now this statement isn't true for SINCPAK3D, or perhaps even the product you sell. However if you think about, subscription is extortion. Pay us now, or pay us more later, even IF the only reason you are upgrading is because WE changed the drawing format on you, and all our other customers. Doesn't sound fair at all.


I do not even subscribe to magazines for similar reasons. There are some issues that I either can't or do not read, and If I do not actual get some utility for my money (read the magazine) I did not save anything. And this is often the case with autodesk and bentley and the subscription sales pitch, users have the new product, they do not install that new product, often running 3 releases behind in implementation. This folks is not saving money, this is spending money hoping the new product wont cost you more later when and or if it's is stable enough to transition to and not lose productivity along the way.


« Last Edit: June 09, 2008, 10:33:04 PM by mjfarrell »
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CADaver

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Re: Bentley, Schmentley!
« Reply #19 on: June 10, 2008, 12:58:15 AM »
Pizza is a very poor analogy here.  You consume the pizza and its gone, to get another you have to pay full price (or extortion by some definitions).  It isn't extortion as you are quite free NOT to pay it, or buy something else (MicroStation), or pay upgrade fees instead of subscription, or draw with a pencil, or use one of the wonderful FOSS CAD applications.

Why 15% for an annual subscription?  15% of what number?  What is your basis for that number?  Does it cover the cost of development? What makes you think 15% is 'fair'?  Why not 30%?

Why should I get a 75% discount for making a suggestion?  Would ANY suggestion/participation qualify?  Who evaluates the suggestions/participation?  What does that cost?

Why should I be extorted out of an addition 10% just because I haven't the time to do a complete beta test of the product and want the next release this year?

Wait a minute I missed the cut-off date by a month and it cost me an additional 30% to upgrade?? That's extortion.

~~~~~~~~~~~~~~~~~~~~~~~~

Basically your model is no different than the one Autodesk employs, except the numbers are a little different.  To upgrade from R2006 (non-subscription) to R2009 is currently around $1500 (adding subscription), roughly 25%-30%.  Subscription is $450 (about 8%), for a total of about $2000 or around 35% of retail at three years ... well maybe the numbers aren't that different.  Seems, for all your complaining, you came up with Autodesk's business model.

Yes the numbers are there to generate revenue.  Guess what, they are 'business' to generate revenue, big surprise.  That's why I'm in business and I'm guessing its why you're in business.

CADaver

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Re: Bentley, Schmentley!
« Reply #20 on: June 10, 2008, 01:11:14 AM »
Don't punish anyone for upgrading, i.e. come up with a model that makes sense without offending your customers either way.
Why is paying for an upgrade a punishment?

Price the product for what it is worth. Price the support for what it worth.
What' is it worth?  If I'm only making pennies with the product, its only worth pennies to me, but if I'm making millions with the product its worth ...

Don't force a subscription on anyone otherwide you have created the scenario described, and it does offend the customer.
Subscriptions are NOT forced.  I have a seat of R2006 that is not on subscription and I can upgrade it to R2009 without subscription at a discount until November, 2008 or with subscription until January 2009.  After that I'll just buy a new seat and have two, one at R2006 and one at R2009.

Time for a shift in the business model....just because that is the way you do it, or it has been done, does not make it right, or the way it should be done.  

Time for some creative thinking.
Cool, let's hear it.

MickD

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Re: Bentley, Schmentley!
« Reply #21 on: June 10, 2008, 04:48:02 AM »
>>Time for some creative thinking.
>>>>Cool, let's hear it.

Well, I'd like to see software be available like a heavy machinery hire service, ie. dry hire - they supply the machine, you supply the operator.

You can pay per month/quarter/year, whatever suits but you have access to the latest software available and the vendor is responsible for upgrades, development and support (training type support would obviously be extra). If you want to change, just adjust the hire rate/s to suit the application.
This could possibly be more profitable than a sales/subscription scheme. It would also enable the vendor to provide decent support/upgrades and realistic productive product enhancements rather than the big push for more bells and whistles for the next release.
I don't think you would even need a 'release' for that matter, just version upgrades, some with new features.

While I can't see companies like adesk adopting this sort of structure (they are too entrenched/shackled in their current business model) it would be a good basis for a new or more flexible business.

just my 2 cents.
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mjfarrell

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Re: Bentley, Schmentley!
« Reply #22 on: June 10, 2008, 08:39:21 AM »
Key point that you miss about the model I am discussing, and it throws your math out the window.
This model does not issue a NEW version every year. This model will release  a new version only when application development warrants it. Thus we do not have people holding out (like R14) for 8 years or more and not upgrading.
The product is market driven, not the other way around as is current practice.

Product 'involvement' would require more than a single comment. The user must be actively engaged in the process.

This model actually pays the user in the form of a discount to participate in the beta. At present they seem to think that it is our privilege to beta test the product for them, and pay for the opportunity to do so.  (Error report any one!)


So go do 'the math' over and consider that it is not an annual upgrade, and you will see the numbers are different.



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Michael Farrell
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Re: Bentley, Schmentley!
« Reply #23 on: June 10, 2008, 08:50:35 AM »
So, Michael, is it your contention that there was no product improvement from R14 to R2000? I simply don't agree, in fact, IMHO, it was probably the best upgrade of all the Autodesk upgrades.

Regardless, people do have the choice, there is no extortion going on, period. You can choose to pay for the subscription or you can choose to not pay for it. You can choose to upgrade each year, intermittently or never. You are never forced to upgrade.

If you contend that the ROI for a seat does not warrant an annual upgrade, then perhaps you shouldn't be using the software.

I can pay for an annual subscription to Autodesk with the profits from a single client. Others may not have that luxury or ability. Perhaps they should look at cheaper alternatives or a different field.
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mjfarrell

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Re: Bentley, Schmentley!
« Reply #24 on: June 10, 2008, 10:27:22 AM »
So, Michael, is it your contention that there was no product improvement from R14 to R2000? I simply don't agree, in fact, IMHO, it was probably the best upgrade of all the Autodesk upgrades.



No I did not say there was no product improvement. I am saying that people are still using R14.
If the product was improved enough to justify needing or wanting to upgrade because there was sufficient improvements there would be no need to force users to upgrade with format changes and compatibility issues.

Make the product better with each release such that it justifies the upgrade, not because of interface, or file format issues. Make the product that much better that the customer INSISTS on upgrading because the tools are vastly improved.

As I said, no ROI from the initial use of the product. Sure over the life of a contract with a particular client, there should be some return unless your business model does not charge for the value of your services, in which case you need to be in another business, not just shopping for cheaper software.

Sure there is a choice, unfortunately the 'choice' is forced on you by the economic model they employ. It should not cost a user to not upgrade, and their product should not become incompatible thus forcing them to upgrade, and then paying the penalty for having not done so every year.
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Re: Bentley, Schmentley!
« Reply #25 on: June 10, 2008, 11:35:07 AM »
Sure there is a choice, unfortunately the 'choice' is forced on you by the economic model they employ. It should not cost a user to not upgrade, and their product should not become incompatible thus forcing them to upgrade, and then paying the penalty for having not done so every year.

I think that is a pessimistic viewpoint. You say that a person who does not upgrade with each release is penalized, by having to pay either full price for the seat or at very least a higher price than their neighbor who upgraded each cycle.

I tend to see it from another perspective. If the cost to upgrade is not on parity with those who choose to upgrade regularly and those who choose to upgrade infrequently, then you are indeed penalizing those who do what you want them to do. Upgrade cycles are timed to maximize profits, I don't think there is any debate about that. As such the software companies want you to upgrade at each cycle, there is also no debate about that. If you do what the software sompany wants and upgrade each cycle, you are rewarded with a lower price overall, however, if you do not upgrade each cycle, (i.e. you are not doing what the company wants you to do) then why should they feel compelled to treat you the same as those who are?

Life isn't fair, never has been and never will be ... but, if you play the game by the rules of those whose game it is you are playing, you will invariably be treated better than those who do not, or at least you should be.

Lets look at Microsoft for a minute ... For $300 per year, I can put just about every piece of software Microsoft produces on 5 computers and in some instances 10 computers. However, I must agree to do this yearly, on subscription. If I choose to do like most people and upgrade whenever the mood strikes me to do so, then I can expect to pay $279 for a seat of MS Office or $129 for an upgrade. Overall, I win and they win. Autodesk is no different.

I believe your contention that the product is poor and/or there is little new development is inaccurate, even if the enhancements are incorporation of already existing lisp tools into the base package.
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M-dub

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Re: Bentley, Schmentley!
« Reply #26 on: June 10, 2008, 12:20:20 PM »
Here are some numbers to chew on a bit.

I don't have the actual cost for one NEW seat of Microstation because they're "So Good" at getting back to me in a timely fashion.  Maybe they're getting back AT me (for referring to their "Awesome back-fees") and not TO me. So, I'm just using the number that he gave to me verbally.  $6,100 for a new seat of Microstation.

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Re: Bentley, Schmentley!
« Reply #27 on: June 10, 2008, 12:26:30 PM »
Does subscription costs change at all?  Or do you lock in?

M-dub

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Re: Bentley, Schmentley!
« Reply #28 on: June 10, 2008, 12:30:02 PM »
Does subscription costs change at all?  Or do you lock in?

Well, that, I don't know.  I was just assuming that all costs would stay the same.  The chances of that happening, I would say, are slim.

CADaver

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Re: Bentley, Schmentley!
« Reply #29 on: June 10, 2008, 06:50:06 PM »
>>Time for some creative thinking.
>>>>Cool, let's hear it.

Well, I'd like to see software be available like a heavy machinery hire service, ie. dry hire - they supply the machine, you supply the operator.

You can pay per month/quarter/year, whatever suits but you have access to the latest software available and the vendor is responsible for upgrades, development and support (training type support would obviously be extra). If you want to change, just adjust the hire rate/s to suit the application.
This could possibly be more profitable than a sales/subscription scheme. It would also enable the vendor to provide decent support/upgrades and realistic productive product enhancements rather than the big push for more bells and whistles for the next release.
I don't think you would even need a 'release' for that matter, just version upgrades, some with new features.

While I can't see companies like adesk adopting this sort of structure (they are too entrenched/shackled in their current business model) it would be a good basis for a new or more flexible business.

just my 2 cents.

There are a couple high-end packages that employ that model.  Its a nightmare of management for the large user.  If I need to add five seats to a project that is currently underway using several dozen seats, its on me to make sure the versions match and are compatible with the database application engine.  I currently have four versions of the same application running on seven different projects, each employing a different database application version.  We keep them on four separate application servers just to keep track of licensing.  Throw on top of that the exponentially increased involvement of the applications vendor in heavily supporting older releases at the same time supporting the new releases and you wind up with an application that comes in over $600 per seat/per MONTH leased. 

While it is flexible for us, add a seat when we need it, lose it at will, it is an overhead anchor for the vendor, one for which he doesn't mind charging.