Re: Fantastic Ada promotional piece from Rational (long)

[kdh@ocsystems.com (Kevin D. Heatwole)]

Michael Feldman (mfeldman@seas.gwu.edu ) writes:
> And Borland NEVER charged for bogus "support". If you wanted the
> new version you could buy it.

Actually, I believe that vendor pricing has more to do with the kind of
computer that the software will run on than anything else.  

For PCs, software vendors typically charge a one-time fee for the product.
You have to pay again for any upgrades.  The upgrade fee is usually cheaper
than buying the product again (but not always).

For Workstations, software vendors typically charge a one-time fee for
the product, maybe a required one-year maintenance/upgrade fee, and then 
optional yearly maintenance fees.  The yearly maintenance fee is generally 
10-15% of the "undiscounted" purchase price if it includes maintenance
only (e.g., phone support, bug fixing, etc.).  If the fee includes free
upgrades, then the fee is usually around 20%.  Ada compilers are usually
a "high" maintenance item.

For Mainframes, often software vendors will change nothing up front (maybe
just media costs) and license the software for a Monthly License Charge
(MLC).  This is almost like software "renting".

There are, of course, many different pricing schemes out there, but the
bottom line is that a software vendor must recoup his costs and make a
profit.  In fact, the trend with all the networking going on, is to
price software by its use (either by the number of concurrent users allowed
or by number of times actually used).

Regardless, I think you might be a little rough on the Ada compiler vendors
whose pricing policy is one-time charge with an annual maintenance fee.
This pricing model is used by many software vendors (at OC Systems, we
pay annual maintenance fees on just about all the commercial software
we have purchased for our workstations).

> Borland's policy is "use this version or buy the next version." I have
> no problem with that. I'm getting aded value. I am NOT getting added
> value when an Ada company says "sure, we'll sell you our compiler,
> as long as you keep paying that mandatory support fee." 

Borland is pricing software for the massive PC market.   Also, Borland's
compilers were much easier to implement than Ada compilers.  I even implemented
a Pascal compiler when I attended school in the early 80's.  Even GNAT
has taken several millions of dollars and several years to implement, and
it still has a way to go yet.  So don't expect Borland's pricing to
be the same as a commercial Ada compiler vendor just because they both
sell compilers.

> 
> NOT! I refuse to pay for something I never use. The compiler vendors have 
> finally come to understand that, as you will see if you trouble yourself
> to look at their current academic policies.

Anyway it is priced, the Ada compiler vendor must make a profit or get out of
the Ada business.  This isn't unique to Ada compiler vendors.

As for "academic" pricing, as far as I can tell, there isn't enough of
a market for Ada compilers from academic organizations that are willing 
to pay, to make it worthwhile for most Ada compiler vendors (excluding
the Ada compiler vendors that have targeted the PC marketplace with PC-like
pricing models - they may still have a chance to make a profit).  
Therefore, most vendors seem to have figure now that they might as well 
give it away (with minimal support) because this really doesn't cost them 
much.  Besides, the more users using your compiler, the more solid the compiler 
will become in the long run.  This wasn't true several years back, because
most vendors probably felt they could make a profit "selling" into the
academic market. 

Another minor point that might be hindering many Ada vendors from pricing
software cheaper is that the US government continues to be one of the
major sources of income for Ada vendors.  Often, the government will 
require a vendor to give the government "most favorite customer" pricing
(especially, if you are listed on the GSA schedule).  I think this means
that the vendor can't sell the product cheaper to customers outside
the government.  

Well, these are only my opinions and observations, but sometimes people 
on this board sometimes "bash" Ada vendors who are only trying to make
a profit and compete in a relatively small market.  

Kevin D. Heatwole
OC Systems, Inc.