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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.
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.
It also cripples the utility of MS work-alike software like SAMBA. If you have your desktops on mandatory upgrade, MS can break SAMBA connectivity at will. Thus using a non-MS implementation of the protocol becomes a LOT riskier. You can't just hold off on desktop upgrades until you (or the SAMBA team) figure out what to do.
pr0n - keeping monitor glass spotless since 1981.
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?
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
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.
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.
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.
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.