Are we being nickled and dimed to death?
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Few good, healthy business run their gear into the ground and good financial people look at the overall benefit to the business not just acquisition cost.
One could argue that subscription software helps to protect IT from bad budgeting and other financial decision making.
I'm always surprised to not find IT folks absolutely enamored with subscription models as we are the ultimate beneficiaries.
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Hold the phone, I'm guessing that most IT Pros would love to see subscription based everything for the reason you mentioned, but that doesn't mean we control the purse strings.
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@Carnival-Boy said:
I like to have a choice. Adobe's subscription only policy is a bit too fascist for my liking.
Yep. I ditched adobe I had a lot invested in them. My personal company almost solely used Adobe products (after we ditched Final Cut Pro when they went from 7 to X making it a consumer software). but the subscription model is not good for most small production companies. This was actually requested by big Hollywood firms and Adobe went along, they wanted to kick smaller ones out of the field so there would be less competition as little video firms give this big and over priced guys a run for their money. Small firms don't like it because in the video world you're likely to have a great few months and then some really slow with no clients which will hurt more with subscription based especially if you don't pay you can't open your files. Not Cool.
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@Dashrender said:
As for the Adobe example from above, sure you can save time, manpower, etc with new versions, SOMETIMES, but it takes a savvy person to really take advantage of that from a business side, I'm guessing more often than not businesses would see little return on investment upgrading everytime a new version came out.
Actually Starting with CS3, then CS4, CS5, CS6 (CS5.5 didn't change much from CS5). There were major changes in the applications especially in the video side of things that would save a company money in rendering time- Rendering time when you sit there doing nothing because you have to wait on a computer used to be some of the most expensive parts of video post production. With GPU accelerated rendering, It's slowly becoming a thing of the past.
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@Dashrender said:
Hold the phone, I'm guessing that most IT Pros would love to see subscription based everything for the reason you mentioned, but that doesn't mean we control the purse strings.
Sure, but it doesn't negatively affect us as IT Pros, it only positively affects us, right? It helps force IT to be better than it would otherwise. Plus it makes things like license tracking less of an issue. It's a pretty big win, I think, on the IT side.
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@thecreativeone91 said:
@Dashrender said:
As for the Adobe example from above, sure you can save time, manpower, etc with new versions, SOMETIMES, but it takes a savvy person to really take advantage of that from a business side, I'm guessing more often than not businesses would see little return on investment upgrading everytime a new version came out.
Actually Starting with CS3, then CS4, CS5, CS6 (CS5.5 didn't change much from CS5). There were major changes in the applications especially in the video side of things that would save a company money in rendering time- Rendering time when you sit there doing nothing because you have to wait on a computer used to be some of the most expensive parts of video post production. With GPU accelerated rendering, It's slowly becoming a thing of the past.
So how did the change in model hurt the SMB market? Did it raise the prices? Lower the TCO? What changed over the long haul? I don't buy CS so I don't know how the price change was, but subscription models on their own are pretty much positive for everyone. I think your actual complaint here might be that Adobe simultaneously jacked up their prices. That's an unrelated thing. If products are just more expensive, that's just a price increase. Everyone has always hated price increases. But subscription models don't mean price increases. One is a means of licensing, the other is the price.
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@Reid-Cooper said:
@Dashrender said:
Hold the phone, I'm guessing that most IT Pros would love to see subscription based everything for the reason you mentioned, but that doesn't mean we control the purse strings.
Sure, but it doesn't negatively affect us as IT Pros, it only positively affects us, right? It helps force IT to be better than it would otherwise. Plus it makes things like license tracking less of an issue. It's a pretty big win, I think, on the IT side.
It negatively affects us by being more expensive. If Windows was only available as a subscription, it would cost a LOT more than we pay today for that license. There is almost nothing (if not nothing) that's cheaper through subscription than outright purchases.
Now that said, someone will through O365 at me. OK sure, if you tried to build a system as redundant/secure/etc/etc/etc as O365 has, sure, they are probably doing it cheaper, but SMB has NEVER even tried to do that. Yes the SMB solution isn't as robust, but for the most part they found they didn't need it to be.In the case of the production company using CSx, if they had a lean year, under a purchase model, they could post pone the upgrade until they afford it, but if they're on a subscription basis, they must continue to pay otherwise loose access to the software altogether.
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@Reid-Cooper Well said. I remember that support told to buy Acrobat X because we upgraded to Office 2010.
Basically it was sorry, "we didn't want to make version 9 work, but we fixed the issue in version 10. Is there anything else I can PRETEND to help you with today?"
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@Dashrender said:
It negatively affects us by being more expensive. If Windows was only available as a subscription, it would cost a LOT more than we pay today for that license.
Nothing in the nature of a subscription makes that true. And being more expensive but providing better value (TCO / ROI) positively affects IT pros and the businesses that they support. Base cost is not important, business value is. Subscriptions can be cheaper or more expensive or the same - it is just a different pricing model.
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Over time, subscription models are likely to lower software development costs and improve support. It reduces the need to support old software which is incredibly expensive.
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@Dashrender said:
In the case of the production company using CSx, if they had a lean year, under a purchase model, they could post pone the upgrade until they afford it, but if they're on a subscription basis, they must continue to pay otherwise loose access to the software altogether.
All they have to do is not be idiots. If you have a "fat" year, you store up so that you have the money on hand. Then when a lean year hits, you have the money to keep the lights on. That's all that you are doing when you buy outright - you are paying up front for something you hope to use later. If the business has cash flow issues then you have more options, not fewer, with a subscription model since you can pay ahead or set aside the funds in the same way as purchasing would do.
Subscription pricing lets you scale up and down as needed and lowers the bar for getting started.
I think this is just bad perception. Or we are saying that SMBs are so inept that they should not be in business because they aren't competent enough to set aside funds unless forced to do so and that they need software companies to treat them poorly to help them not shoot themselves in the foot.
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@scottalanmiller said:
I think this is just bad perception. Or we are saying that SMBs are so inept that they should not be in business because they aren't competent enough to set aside funds unless forced to do so and that they need software companies to treat them poorly to help them not shoot themselves in the foot.
Tell me you don't see this be the case more often than not? And if you don't, perhaps that's because the businesses are being filtered before you're brought in?
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@scottalanmiller said:
Nothing in the nature of a subscription makes that true. And being more expensive but providing better value (TCO / ROI) positively affects IT pros and the businesses that they support. Base cost is not important, business value is. Subscriptions can be cheaper or more expensive or the same - it is just a different pricing model.
You're right, of course. But many SMBs don't see it this way. They often will run their software into the ground unless there is some outside force that gives them no choice.
Look at all of the printing companies in this country (and probably the world) that rely on XP machines to run their print systems. The software/hardware vendors either went out of business or the new versions just won't work with the old printers, and these print shops are stuck on Windows XP.
Of course the best solution would have been for those print shops to not get themselves into this position in the first place, but if not for the cheaper solution provided by making software that only works on Windows XP, the print shop possibly could never have afforded the printer in the first place - so it appears that we are in a catch-22? I suppose one could argue that if the company was truly profitable, they should have been saving money for the next unit the moment the original unit was paid off, that just rarely ever seems to be the case.
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@scottalanmiller said:
If you have a "fat" year, you store up so that you have the money on hand.
Lol, because that's how SMBs work. If you have a "fat" year the CEO gets a really nice new car.
Under the old model, companies who like to have the brand new full fat version of everything ended up subsidising companies who are happy to duck and dive and work the licencing to their advantage (by running older, cheaper versions). Under the new model, everyone pays the same. So some companies are better off, and some are worse off. All things equal, I'll always be worse off.
It's the same with phones. People who must always have the latest shiniest iPhones are better off renting their phones from a phone company and getting them replaced under contract every couple of years. Those who don't care for shiny & new are better off buying and keeping their phones until they break.
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@Carnival-Boy said:
@scottalanmiller said:
If you have a "fat" year, you store up so that you have the money on hand.
Lol, because that's how SMBs work. If you have a "fat" year the CEO gets a really nice new car.
Under the old model, companies who like to have the brand new full fat version of everything ended up subsidising companies who are happy to duck and dive and work the licencing to their advantage (by running older, cheaper versions). Under the new model, everyone pays the same. So some companies are better off, and some are worse off. All things equal, I'll always be worse off.
It's the same with phones. People who must always have the latest shiniest iPhones are better off renting their phones from a phone company and getting them replaced under contract every couple of years. Those who don't care for shiny & new are better off buying and keeping their phones until they break.
Great way to put it CB.
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@Carnival-Boy said:
@scottalanmiller said:
If you have a "fat" year, you store up so that you have the money on hand.
Lol, because that's how SMBs work. If you have a "fat" year the CEO gets a really nice new car.
Under the old model, companies who like to have the brand new full fat version of everything ended up subsidising companies who are happy to duck and dive and work the licencing to their advantage (by running older, cheaper versions). Under the new model, everyone pays the same. So some companies are better off, and some are worse off. All things equal, I'll always be worse off.
It's the same with phones. People who must always have the latest shiniest iPhones are better off renting their phones from a phone company and getting them replaced under contract every couple of years. Those who don't care for shiny & new are better off buying and keeping their phones until they break.
So basically... SMBs have no business sense and even when things are good for them in the long run? I get it that everyone thinks that the business people that they work for are idiots, but is this really true? Are all SMBs really this bad? I know that many are... but aren't those on their way out of business anyway?
No matter what, isn't this a good thing for IT, though? If it forces businesses to be smarter and behave better it benefits everyone in those businesses. Sure, the CEO can't skim money as easily, but isn't that a good thing?
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@scottalanmiller said:
So basically... SMBs have no business sense and even when things are good for them in the long run? I get it that everyone thinks that the business people that they work for are idiots, but is this really true?
AFAIK, you're the only one calling them idiots. I wouldn't and I think it's pretty arrogant to call someone an idiot just because you don't happen to agree with them.
It's not just SMBs, it's all companies. Companies generally increase dividends in fat years and cut costs in lean years. You can bemoan the short termism of capitalism, but it is what it is.
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@Carnival-Boy said:
@scottalanmiller said:
So basically... SMBs have no business sense and even when things are good for them in the long run? I get it that everyone thinks that the business people that they work for are idiots, but is this really true?
AFAIK, you're the only one calling them idiots. I wouldn't and I think it's pretty arrogant to call someone an idiot just because you don't happen to agree with them.
It's not just SMBs, it's all companies. Companies generally increase dividends in fat years and cut costs in lean years. You can bemoan the short termism of capitalism, but it is what it is.
Increasing dividends when they know that they need operating capital the next year is pretty idiotic. If it is causing the business to be at risk and have fewer profits overall... that's pretty poor planning. Call it what you like, but saying that SMBs are too foolhardy to handle simplistic financial decisions sounds more drastic than just calling them idiots.
It has nothing to do with me agreeing with them, it's about making money and having a viable business.
If a child did this you would correct them and treat it as a learning situation. You'd say things like "you should have a savings account so you can learn about money." If a college student spent their money on beer and couldn't afford their phone the next month, you wouldn't be upset with the phone company for not forcibly charging five years of cell service up front, would you?
Why do we treat CEOs and CFOs as if it is acceptable for them to be less financially responsible with corporate funds than a child with their own?
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If the businesses were happy that they were given more flexibility or accepted that they were making financial mistakes and being like "oops, my bad", it would be different. But we are acting like software companies "owe us" less good financial terms in order to head off financial missteps by management.
Step back and look at it as a neutral outsiders. The software vendors, by moving to a "pay as you go for what you use" model versus "pay up front for what you might use" is a pure win as far as models go. There is no downside except that it gives more power to the business to choose to do reckless financial things. The business holds all of the cards. It can leverage the cost savings or it can take the perceived windfall and cripple itself.
It's really unfair to be upset with the party doing the right thing and defending the one squandering critical corporate resources as "just the way it is." That's an extremely American mindset where we tend to feel that the government needs to outlaw all bad decision making and take away freedoms because "someone might abuse them." Rather than giving people the freedom to excel or fail based on their own decision making.
The bottom line is, if this causing a problem for the business, it's the business' fault and no one else's. The business has every capability to have this be in their favour. Any lack thereof is purely at the discretion of the business itself.
If you get upset about how that plays out, you need to direct your ire at the business making the bad decisions, not the vendors helping them. If you feel that executives taking that "not really profit" for themselves is fine, then don't get upset at anyone because the vendor made it possible for that flexible business decision making.
The only thing that I don't see as fair or reasonable is being upset that vendors gave businesses better options to protect themselves, grow and excel.
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I think an issue here, which maybe Scott can expand upon, is that businesses don't see how they could possibly be saving money by moving from a one time pay to a forever monthly solution.
I guess a good example could be Exchange. Many companies bought Exchange 2000 and haven't upgrade for the past 10+ years. Here's a solution where I can definitely say that company saved a ton of money over the cost of using something like Office 365. Did those SMBs have all of the DR/Backup/awesome techs, etc - probably not, but then again they probably didn't need them.
I'd be willing to wager that if they looked at their spend over the past decade for the Exchange system it wouldn't come anywhere near the cost paid for O365.
The same could be said about those running Windows XP and Office 2003 - overall there just was no reason to upgrade unless you had a specific driver (new software, failed hardware - might as well get the newer version, etc).
Converting SMBs into the mindset that they need to look at their technology as a continual expense now, instead of a once every 3-5-7 year major expense is difficult at best, impossible at worst.
And the driving force behind all of this? In my opinion it's that the vendors want a more steady income stream, even if it's just the same amount they would have gotten before, but come on, we both know it's more than it was before.
