Are we being nickled and dimed to death?
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@Reid-Cooper said:
I think that it is mostly the pilot problem. All studies show that having a commercial pilot fly you is far safer than flying yourself. Yet people are afraid to fly but not afraid to do more dangerous things. Why?
Because they like the sense of control. It isn't good for them. It is not in their interest. But people like the sense it gives them.
I think buying vs leasing software is the same. People like the feeling of control.
Its all about cost. Its cheaper to get a pilot's license than to pay somebody to fly you around for years. Also if you have time invested in a plane and use it on a daily basis, you are stuck paying the pilot to fly you everywhere. You can either ditch the plane and start over which will cost alot, or you can keep paying the pilots salary
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@Reid-Cooper said:
Buying up front does not pay off as much as people think.
Depends. In a lot of cases, we end up using software and hardware way beyond our original estimates. If making a choice between rent or purchase, we'll typically assume a useful life of the product of between three and five years. That could be for a new printer, or Office licences, it doesn't really matter - we'll assume four years on average. In reality, we typically end up using those products way beyond four years. In the case of printers, it could be ten years! Our ERP system is about to replaced after 15 years of service. Our PBX was recently replaced after nearer 20 years of service.
Whether that's a good thing from a user perspective - we end up running out of date hardware and software, which effects productivity. But from a beancounters point of view, purchasing sometimes looks more attractive when taking account the actual life of the product. Users like the rental model because they get new stuff all the time.
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So many great points - but I'll go with Carnival Boy's last one - most everyone I know runs their equipment into the ground - heck look at the machine @scottalanmiller uses. It's 4+ years old, he simply upgrade to an SSD and some more RAM and he's still totally happy with it.
I just replaced 70% of our machines here - I fully expect most to make it at least 5 if not 7 years (just in time for Windows 7 to be retired from support). So paying up front in my case will almost certainly save us money in the long run.
I feel the same way with the rest of these new'ish services - they may be great services, but the prices, OUCH, they just really add up and affect the bottom line a lot!
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.
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It's like buying a car versus leasing. Sure leasing is convenient and can make financial sense in some situations. But if you buy the car, then when times are tough you can keep driving it into the ground and keep it patched together with duct tape. If you're leasing and go through a rough patch, the spigot gets turned off as soon as the money flow stops.
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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?
