Hello? <vent>

[James B. Byrne]

On 29 Oct 98, at 13:10, Robert J.M. Edis wrote:

> My understanding is that software pricing is a complex issue taking into
> account a) what the consumer will pay, b) how much it costs to create and
> support the product and c) what competitors are charging.  
> 

There are only two things that a business cares about when it 
comes to pricing a product; how much a potential client is 
willing to pay, and how much the competition is asking for the 
nearest equivalent offering.

The cost of the product simply determines profit or loss on the 
transaction.

> What a product is worth to a customer is based on more than just its
> purchase price.  Besides that and support charges are "can I find people
> who know this product and what do THEY cost?", "How robust will my
> application be if made with this product instead of another?", "How quick
> can I build/upgrade my application in this product vs another?", etc.

What something is worth, and what a client can afford to pay 
for it are two very different things.  Cognos seems to believe 
that people will pay whatever a thing is worth.  This is not true.

However, the entire concept of "worth" in this context is very 
peculiar.  Consider a firm that has used Powerhouse for its 
development since 1981.  What makes Powerhouse worth so 
much to them?  The intrinsic value of Powerhouse as a 4GL 
application generator, or the thousands of man hours of their 
15 year investment into designing, building, and refining an 
application specific to their needs?  

How is it then that Cognos assumes the value of such 
investments as an intrinsic part of the value of "their" product 
and then effectively uses this as a lever to extort (in a non 
criminal sense) more money out of a luckless user?  The 
ethics of this practice are very, very dubious to my mind.  The 
whole principal of 4GL was to LOWER overall costs, not to 
move the cost of development out into the upgrades fees paid 
to a vendor.

Our firm faced this issue with Cognos back in 1993.  After a 
very unpleasant set of exchanges, where departure from the 
HP3000 platform entirely, along with Cognos, was actively 
considered and discussed with both Cognos and HP, we had 
our support contract changed so that we have a fixed number 
of user seats, regardless of platform.  Now our contracted 
upgrade fees are solely for the administrative effort on Cognos' 
part to change their records.  These fees are still far too high 
for what is actually done by Cognos in this event but I am not 
going to quibble over a nominal amount every four years or so.

Now however I read indications that the web enabled version of 
PH is NOT going to come out under support contract as an 
upgrade, rather it will be a new PRODUCT which we will be 
expected to purchase.  We pay a significant amount of 
change here every year for the infrequent opportunity to 
educate one or more Cognos service people in the intricacies 
of their product.  I believe that I have called support four times 
since 1996 and we have received exactly one (1) update since 
1996. That one (7.29C8) I had to call and ask for this year. 
V8.19 has just arrived, which is nice if a little more than 2 
years late, but if the web version of Powerhouse comes out as 
an option to purchase rather than a part of the core product 
then I believe that our firm will have to revisit the matter of the 
value of a Cognos support contract.

I think very highly about Powerhouse as a product, and also 
about the people that work at Cognos, many of whom I have 
known for better than 15 years.  That said, Cognos' pricing 
practices relating to machine upgrades by clients on support 
contracts are totally abhorrent to me and diminishes the 
worthiness of the entire organization in my eyes. 

Regards,
Jim
---
James B. Byrne                Harte & Lyne Limited
vox: +1 905 561 1241          9 Brockley Drive
fax: +1 905 561 0757          Hamilton, Ontario
mailto:byrnejb@harte-lyne.ca  Canada L8E 3C3
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