Are we being nickled and dimed to death?
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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.
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I think one of the big problems Microsoft has had is that their products have become close to perfect. And once a product reaches perfection, the incentive to upgrade becomes much weaker. In early versions of Office, Windows and Exchange there were big improvements in both reliability, performance and features from one version to the next. But there are now only tiny differences - what do the latest versions of them offer over Windows 7, Office 2010 and Exchange 2010? These products reached maturity several years ago, and there isn't really much to add.
I feel that subscription is seen as a way to get out of this dilemma.
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I mean @scottalanmiller talks about subscription allowing "businesses better options to protect themselves, grow and excel.", but I can tell you that there is nothing in the new version of Photoshop or AutoCAD that will add any real value to our business.
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@Carnival-Boy said:
I feel that subscription is seen as a way to get out of this dilemma.
The vendor's dilemma, certainly not the consumer's. LOL
I agree completely with you.
I realize the same can't be said with all software, as previously mentioned, the Adobe CS suite has definitely had some huge improvements, function add. But I'd have to assume that the base product will eventually reach the same level of perfection as Office has, and short of new FXs, the base product won't change. Adobe has already seen this writing on the wall and is converting its customers to a subscription model now - which is definitely bad for the end user.
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@Carnival-Boy said:
I mean @scottalanmiller talks about subscription allowing "businesses better options to protect themselves, grow and excel.", but I can tell you that there is nothing in the new version of Photoshop or AutoCAD that will add any real value to our business.
AutoCAD you might be right, but at least the previous version of Adobe CS did add some pretty awesome new features.
