A long time ago a vendor wanted to charge 1+ Million dollars for an upgrade for their software. The company dumped the vendor and went with another (after a lot of haggling and the vendor took a you have to pay period line) the company went with another vendor who was a little more flexible (the money helped of course). This was in the 1970's (or early 80's) back when a dollar was worth something (name of company provided off list). Another company discussed here on the list was quite rigid. The CIO and others went along until they advertised on the Super Bowel and that was the wrong thing to do as my management came down with orders to get rid of all the products as we were not going to be subsidizing their ads anymore. In less than 2 months we got rid of the products and cancelled all their products. Some were extremely easy to displace and litterly no change was involved others were found to be obsolete and were being paid for, for no reason. I think we saved $500K (US) a year. The 500K probably went to bonuses as the peons (us) never saw it but the bigger cars in the parking lot next year spoke volumes.

Ed

On May 31, 2012, at 1:49 PM, Vernooij, CP - SPLXM wrote:

We did.
After changing our z9's to z196's, a vendor asked such a ridiculous
price for one product that we took the jump to convert to the IBM
version of this functionality, where installing a new product, training
on it and converting the database and procedures and even getting used
to the IBM peculiarities was more than benificial...

Kees.


"Hal Merritt" <[email protected]> wrote in message
news:<[email protected]> ..
.
Our economic culture demands growth. If a publicly traded company
cannot sustain grown in revenues and profitability then investors get
annoyed and move their money elsewhere.

An incumbent ISV can take a calculated risk and increase prices
because we are very reluctant to change products. There is the cost of
training and sometimes conversion. And the cost is sometimes not so much
money as it is clock time.  Not to mention political issues.

But we all are being pushed and pushed hard to cut costs and grow
profits. At some point it starts to make business sense to look at
competing products. And at some other point I guess it makes sense to
change products.





-----Original Message-----
From: IBM Mainframe Discussion List [mailto:[email protected]] On
Behalf Of Shmuel Metz (Seymour J.)
Sent: Wednesday, May 30, 2012 3:41 PM
To: [email protected]
Subject: Re: ISV software costs based on MIPS

In <[email protected]>,
on 05/30/2012
   at 03:26 PM, Hal Merritt <[email protected]> said:

No ISV wants a pricing strategy that potentially reduces income.

Does that include a pricing policy that gives customers an incentive
to switch to a competitor?

--
     Shmuel (Seymour J.) Metz, SysProg and JOAT
     ISO position; see <http://patriot.net/~shmuel/resume/brief.html>
We don't care. We don't have to care, we're Congress.
(S877: The Shut up and Eat Your spam act of 2003)

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