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.

Comments

Working for a ASP company...

[Pengo]

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.

The 'cons' of subscription software/services

[LinuxParanoid]

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

I must really not understand antitrust law

[electroniceric]

How can it not be illegal for a company (which by any measure is either a near-monopoly or monopoly) to demand (*) that you refuse to consider any other product in exchange for (**) not raising prices?

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.

Re:Add in the costs for upgrading.

[flacco]

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.

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.

"from the oooh-look-how-fine-this-print-is dept."

[Raetsel]

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!
• 
  (Why does a server need Media Player, DirectX, Active Desktop, and all the other home-version 'shell-upgrade' tweaks, anyway?!?)

• 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!

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.

Re:As much as I hate to bring it up...

[hacker]

Unix sysadmins are far more expensive then windows, however i dont know about the coders. Good unix admins are hard to find, and expensive, you can picup your average windows admin from any PC store for a couple of bucks :)

However, most Unix admins are also programmers or heavy scripters, and can fix nearly anything with perl, bash, or C. They understand computers inside and out (not just with a mouse), and they understand networking, topologies, and generally how things operate. Your typical MCE (Magazine Certified Engineer) gets paid less, because he KNOWS less, and isn't quite capable of understanding heterogenous envinronments with varied networking and computing topologies.

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.

Re:More quality than price, I think

[kinkie]

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.