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Corporate America Wary of Subscription Software
medical_geek writes: "According to this
article
on cio.com,
MS's subscription service is failing in the business world. I guess
that personal users are not the only group that balks at paying a yearly
fee for software. My question is have you at your job bit the bullet
and signed up as an early adopter, or are you rolling the dice and seeing
if this experiment fails?" This article focuses only on Microsoft, but the same analysis probably explains why ASPs haven't taken off like they were supposed to, either.
We have the same problems in going out to market. We face customers that want to control their own destiny and not completely give up control of their core business.
I believe that unless the technology is a complete commodity , no company is going to be excited about signing up for something thats subscription and reley their business on it.
That is, if you subscribe to these upgrades, you kind of feel you will have to upgrade when something new comes along, even though you do not have to. That takes time, especially in larger offices/companies/megacorporations. Time often much better spent on actually getting some work done. Hehe. No, I don't speak of necessary patches and such - although that is a huge cost (in time) when dealing with MS products too.
So there is no reason at all to subscribe for the newest software, I would upgrade when I must (or when it pays off in better efficiency). I really understand why these big customers don't want to have their IT administrators get their timetable from another company (MS).
And I really understand those that see a bit further and refuse simply because they don't want to be (even more) locked in.
Just remember, when you are subscribing to a service, rather than purchasing an upgrade, you have a lot less leverage as a buyer to control your costs. The CIOs, mostly managers of 'corporate cost centers', obviously recognized that.
Second, the technological rate of progress for a service provider will always be slower because its so much easier for the vendor to retain its existing revenue base than to take the risks of developing new products. For example, I predict that the more you see Microsoft switching to a subscription-based software business model, the less focus you'll see on features (needed to get new business) and the more focus you'll see on risk-averse issues (like security and availability) to insure nothing rocks the revenue boat. Oh wait, Microsoft just announced that, didn't they?
--LP
Trust:
8. A combination of firms or corporations for the purpose of reducing competition (c.f. *) and controlling prices (c.f. **) throughout a business or an industry.
Surely someone here can help me resolve my confusion.
Apologies for posting as AC - can't remember my password.
You forgot #4 - what happens when the software company goes out of business? If your business revolved around their subscription-based software, then you're pretty much hosed unless you don't mind "warezing" it somehow (which isn't exactly recommended for a BUSINESS). You're pretty much tying your future together with that software company. Not a very comfortable position to be in.
I'm sorry... but I'm just not going to buy into any subscription-based software. Unless it's something that's absolutely completely new and hasn't been done before, I can always buy old software that gets the job done. Who _really_ needs Office XP when 97 gets the job done, like you said?
People want to buy and then own a copy. Even if it's a little more expensive they want the deal done and out of the way instead of having continous costs that software-as-a-service gives them.
Yeah, but you dont get postslapped by a slash-god if you are just plain off-topic or trolling. You get modded down, and quite rightfully. However, if you criticise slashdot, they bitchlap you all the way into obscurity of -1. The fact that criticising slashdot is never on-topic is due to the editors unwillingness to talk about it. The moderation on that post demonstrates quite clearly that the community wants to discuss this. So why dont we talk about it, get it out in the open, so we can get back to talking about much cooler stuff.
I can see this festering if there isnt a legitimate thread on it soon.
Big companies are reminding me more and more of great, stupid, predatory animals. They fish the seas dry, annihilate competition, and chew down more of their prey each time. There's no intelligence, no forethought, it's all one-way traffic, with consumers as food.
When a predator gains an overwhelming advantage in a natural system, they typically exhaust their entire food supply, which in turn triggers their own extinction. I suppose this is what comes from skipping those elective natural science classes to focus on your MBA.
Microsofts licensing charges are proportionally steeper than the software systems we have.
Also licensing, typically, gives you technical support and escalation facilities.
Will we be able to ring them when things break?
Good department. Certainly appropriate.
We're talking about a company here that wants to milk as much money out of its' customers, with the least effort required.
They're certainly working well toward that goal -- look where we are now!
- We have a 'server' OS that differs from the 'Ooo, SHINY!' home version by virtue of just a few registry settings!
- Microsoft will accept NO liability for its' software, neither for fitness for purpose, the accidental destruction of your company, or the surreptitious mailing of your anti-government rants to the FBI.
- Two words: Product Activation. Once upon a time, the MS Office license actually allowed you to install it on your home & work machines. Gee, Microsoft sure is a nice company! They're cute and cuddly, too! Now that everyone's used to it, all of a sudden we have to pay for every copy -- you can't tell me that wasn't a patiently engineered plan.
If Microsoft wants to make subscriptions attractive, offer something in return -- we already get all the benefits of WindowsUpdate, are they going to take that away? What is needed is a guarantee of fitness for use, stability, and timely repair of problems. And by timely, I mean 'timely from the customer's definition', not Microsoft's!(Why does a server need Media Player, DirectX, Active Desktop, and all the other home-version 'shell-upgrade' tweaks, anyway?!?)
If I go to Ford and buy a dump truck, I am guaranteed that it will haul N tons of material, or N cubic meters, whichever is less. If I bought a 10-ton truck, and the wheels fall off when I put a 5-ton payload in it, I can sue.
Apply this comparison to Microsoft: I purchase Windows 2000 Server, Exchange Server, and the recommended hardware to run it on, and when it fails at half the advertised max load, Microsoft will gladly bill me for a support incident to tell me I need better hardware! ...And there's nothing I can do about it.
I know this comparison isn't perfect, but it certainly makes the point. I know a lot of companies are sick and tired of buying something advertised as suiting a particular purpose, only to find it lacking.
If the subscription allows me to hold MS accountable, I'm interested. Otherwise, forget it.
"...America's great minds of today, teaching America's great minds of tomorrow. Poor bastards." -- A Beautiful Min
We have just removed a program that has been in service for some 30 years on our mainframes. It has been modified, upgraded and bug fixed in that time, but it has been in constantly in use over 3 decades.
We want a similarly stable service on our other systems, including desktops. Admittedly we don't necessarily want the same software lifetime. But given that we have some 50,000 or so desktops we don't want to be patching or upgrading the software on them very often. It takes a lot of effort to plan and install a new piece of software across all our desktops.
At a cost-level, paying for one Unix admin at $100k a year who knows your network inside and out, and saving $1,200/workstation on Microsoft Licensing, it only takes 83 workstations to recoup the salary that you're paying your Unix admin, and that's just in licensing. Add the decreased downtime, faster trasnsitions and upgrades, and so on, and the Unix admin comes out much cheaper.
Also, Unix admins tend to be very self-motivated and self-managed. They don't need micromanagement. Give them a task, they run with it and it gets done. No questions. These people excel, and make good managers overall. You can save the cost of yet another employee in IT to manage your Unix admin, if you hire wisely.
It's much cheaper to keep the Unix admin on staff, when you aggregate the overall costs of the less-technical MCE you would have hired.
good windows admins are hard to find too. a windows admin job is easy to busk even when you don't know what your doing, hence all the mediocre fucktards flooding the market and giving windows admins in general a bad reputation.
update comments set karma=-1, reason='offtopic' where sid=26315
I am not going to debate with anyone whether this is a major reason why DEC (Digital Equipment Corp.) failed... but I believe it was part of it. I worked for the US Gov't in the late 80's and we had a lot of VAXes running VMS. EVERY STINKING YEAR we had to pay money to upgrade our licenses.
This idea came and went, and I for one am personally very happy that Micro$oft has chosen such a moronic policy that has, in part, caused other companies to fail. Here's to your self-inflicted demise, Bill!!! "Have at it, and good luck!"
I don't think the security problems come into the upgrade decision. These are the main problems with upgrading to XP on a corporate level (at least where I work):
1. It's still too new. Wait for a couple of service packs.
2. It's too new. Budget for 2002 at the place I work at was worked out last July, no space for XP in that budget.
3. It's too quick after W2K. We are only just getting around to upgrading to W2K from NT 4. These things take time when you are upgrading several thousand PC's (hw and sw), training all the staff, etc. It's expensive.
4. The big question though is WHY? NT 4, and particularly W2K, easily provide all you need in an office environment. The W2K upgrade was mainly done because we are suspicious that we will soon be getting software that won't work on NT4, which I suppose is why we will eventually be forced to upgrade again.
Everyone tech support person I know hates to work on the migration projects. Everyone in the org has an opinion (usually totally uninformed) and the people who have to decide just get hassle from all directions.
This upgrade hysteria has got to stop. It's costing far more than its worth.
Just my 2 (euro) cents.
Autodesk has been trying to do this this with AutoCAD for the past couple of years. The reason that it has met resistance there is the fact that every other realse has been a failure (Release 11, 13, 2000). I am worried that they will upgrade a good release with a bad one.
They say that they will have a way of backing out of the subscription upgrage. I just want to make my drawings they want a steady stream of money. Maybe I could pay them to leave AutoCAD alone.
It's neither imo.
The problem is that WinXP adds nothing to Win2k from a corporate point of view.
The new GUI? No use, since the older one is known by the users since 95, and the new one can be disorienting, despite Microsoft's claim of the contrary. Re-training is expensive.
Movie Maker and Media Player? Puh-leeze, Windows installs already enough time-wasting stuff on the OS without needing those.
MSN Explorer? Many businesses restrict access to the Internet, why would they allow looking at MSN?
.net? Pure vaporware so far as far as real-world applications go.
Internet Explorer 6? It doesn't offer much over Internet Explorer 5.5, which is already widely deployed, and besides it's just a download and remote installation away.
Server-side, WinXP is just not there(TM), and it offers a total amount of nothing over win2k.
Also, software compatibility is still to be tested.
Or VMS, or bespoke, which is what most of the monitoring and control systems in the nuclear industry runs on. But this was becoming too expensive, and when last I was working in the industry, NT 3.51 had been settled on as their new OS of choice. I thought (and said) at the time that it was insane, but the decision had been made.
The point is that developers supplying this industry (and any other safety critical industry, think air traffic control or hospitals) absolutely have to be able to replicate older systems when they do any fixes or replacements. It's a contractual requirement, and it should be obvious why it makes sense.
As Microsoft moves towards software as a service, that's becoming harder and harder to do, and I shudder to think of the consequences of an applications contractor replacing an NT 3.51 system with an NT 4, Win2k, XP or (god help us) .NET system simply because it's too much trouble for them to get their hands an NT 3.51 install, or to source new hardware that NT 3.51 has drivers for. Think 5, 10, 15, 20 years down the line. How many 1982 OS's will run on modern commodity hardware?
Ironically, the reason for the move from VMS and proprietary OS's to MS was that the industry was instructed to cut the ties to proprietary solutions for budget reasons (sourcing old hardware to replace broken VMS consoles cost a fortune). So now they're tied to MS, who have a clearly stated obsolescence policy. It's practically guaranteed that 2002 vintage WinXP won't be installable on 2022 hardware. NT is already unsupported, and 2K will be when .NET rolls out. So we're back to the same problems of replicating builds and sourcing old hardware to match the OS.
Was that clear enough? Corporate America is not just cube farms writing documents and browsing Dilbert, it's the very infrastructure of the country. Sections of that infrastructure cannot (or should not!) allow themselves to be railroaded into using systems with built in obselescence, which is why software-as-a-service is going to have a very, very hard sell in those sectors.
If you were blocking sigs, you wouldn't have to read this.
If you rent software, it's on the books as an expense.
If you "buy" software, it's on the books as a Capital Expenditure, i.e. an asset.
Soooo, given a choice which one will the bean counters choose?
~~~~~ BigLig2? You mean there's another one of me?
For 2, you're underestimating the cost of upgrading in an enterprise. If those 10,000 users are spread through 50 offices then the costs of upgrading are huge, both one time and on going. This is very different to the cost of a few hundred hard drives.
For 3, even the most closed software is still customizable. Our copy of office has had templates added, to give company standard documents and presentations.
For 4, it's nothing to do with the newness or size of the company. Even the biggest company or organization can have their websites hacked. However, if it is an ASP, then the company which owns the data has NO possibilty of preventing or correcting the problem.
Still, outsourced software provides real value in many cases, and companies want it dearly. For example, if you have any idea how expensive it is to pay IT staff simply to support MS Exchange for a medium to large-size company, the costs are huge. Several companies are currently making a living hosting Exchange, Oracle Financials, and other "hostable" commercial software packages because over time it is actually cheaper to pay someone else a flat monthly fee to manage it than to hire your own staff, especially if you are a large organization. Intermedia [intermedia.net] is one ISP I've seen that hosts Exchange, for example.
How can it be cheaper for you to to hire the staff than it is for me to hire the staff? We both need the same number of support staff to support my users. But now I have to pay for your proffit. For small companies I can see where paying someone else to manage your email severs may be cheaper, but for a large company, where the need is large enough for economies of scale to kick in, I don't see how it is possible for you do do it cheaper and at a proffit.
At our small to mid size government shop we looked long and hard at the subscription service. The flaw for us it that the subscription service is based on upgrading every two years. We do not have the resources to roll out new OS/Productivity every two years. We are now upgrading from Win95 to Win2K and that will take 2 years alone. We calculated a 4 to 5 year cycle and with that purchasing the software outright is cheaper.
As a M$ shareholder, I beg to differ. When they were selling product in the normal way (with perpetual licenses and no asinine "activation"), my shares were worth $135 or so, and split fairly regularly. They bombed down to around $40 because of the DoJ thing and the general dot-com slide, but that's become a non-factor -- by now everyone knows M$ is going to get away with whatever they want, and the dot-bombs have all long since detonated.
IMO the biggest reason M$'s share price has not rebounded (and is still hovering at about $60 and hasn't split in ages) is NOT because of ongoing fear about M$'s future under the DoJ's eye, but because subscription licensing, WPA, the overblown cost to value ratio for WinXP, and similar bullshit, have degraded the value of M$ where the real money is, in the corporate purchasing dept.
So as a M$ shareholder, this nonsense is COSTING me money. It sure as hell isn't doing anything positive for my stock value!
~REZ~ #43301. Who'd fake being me anyway?
It's the expensive subscriptions that don't. Who wants to pay full price for a new copy of MS Word every year when the one from five years ago still works. A $5-$10 a year subscription over the lifetime of a product would go over very well, but a $50-$100 one will ALWAYS fail.
"Your superior intellect is no match for our puny weapons!"
I think the big problem with software as a service is that people think they own software right now. Most home users I know don't bother to read the license -- they think it's a combination of a warantee and a "do not copy" clause. Most corporate users I know think the same thing -- and some of them think that the license exists to protect THEM (this has come up in some of the Free Software conversations I've had: "but there's no license! Who can we hold responsible?").
They are, of course, wrong from a legal standpoint. But the interesting thing is that whatever reality is, perception affects buying just as much, and since buyers currently think they actually purchase the software, trying to get them to do something else is tricky.
It will, of course, be interesting to see what happens as technical efforts to drive the legal reality of not owning software home increase. I'm not sure if it'll result in people raising hell and a revolution, or if they'll just lowe a little and move along like so many cattle.
Libertarianism is rich wolves and poor sheep playing gambler's ruin for dinner.
hehe that's what mine are set to :P What I'm curious about is why you can't change the password of a user properly in XP? I go to change mine, apparently everything's all cool. However, I forgot one for another one of my accounts on my computer. Oops. Oh well, I have an admin account for that, log it in.. go to change the password, and I get this message:
You are resetting the password for Blah. If you do this, Blah will lose all EFS-encrypted files, personal certificates, and stored passwords for Web sites or network resources.
To avoid losing data in the future, ask Blah to make a password reset floppy disk.
Is this so people can't change the password, log in as the person, and access their files? Seems quite annoying with limited benefits.. Better hope your network admin doesn't have it set up to automatically encrypt user's files, cuz if you ever lose your password and that floppy disk went bad (since it will 2 seconds before you need to use it, invariably), you're screwed. And most likely, the user didn't know his stuff was encrypted, didn't care if it was, and never heard of a password reset floppy disk.