Ben Langhinrichs

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December, 2005
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Civility in critiquing the ideas of others is no vice. Rudeness in defending your own ideas is no virtue.

Wed 14 Dec 2005, 12:27 PM
A couple of months ago, we made a change to our Midas Rich Text LSX pricing, and never really talked about what the changes were and why they were made.  The changes only effect Enterprise licenses for now, but we may adopt the same change in the future for other license levels, or perhaps make it optional for those levels.

The change is simple.  We now charge 20% annually for maintenance on all Enterprise licenses (or equivalent size licenses).  We have never charged for maintenance on our Midas Rich Text product line, but we actually instituted this change based on a suggestion by an Enterprise license customer.

But why?  Why would a customer who isn't paying for maintenance want to start paying for it?  Well, in this case, the customer is also using another of our products, CoexEdit, which does have a maintenance charge.  The customer said (and I paraphrase slightly):
If you release a major release for CoexEdit, it doesn't cost me anything extra, but if you release a major release for Midas, I have to face paying 50% of the cost all over again.  That is going to be hard to get through approvals.
This comment set me to thinking.  If we release a new major version of Midas every two and a half years and charge 50%, why not just charge a standard 20% per year and not charge to upgrade.  That would be easier for most companies to swallow, and would encourage people to upgrade more readily.  (I know, I sound like IBM, but it really is true)

Of course, there will be the rare company that would not have upgraded that now pays extra.  There will also be the companies who got an Enterprise license a year before a major upgrade and only paid one year's maintenance before upgrading, thus saving 30%.  Since the vast majority of Enterprise license customers upgrade to major versions, I think the majority of customers will wind up saving money.  In addition, maintenance is standard enough, the people who need to justify upgrades will have a much easier time, and companies will have a more predictable cost for planning purposes.

So there you have it.  Saving customers money by charging them more.  I should be in sales or something.

Copyright 2005 Genii Software Ltd.