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18-Opal
September 22, 2015
Question

Change Maintenance & Licensing model to better stimulate innovation

  • September 22, 2015
  • 18 replies
  • 4502 views

Currently, I think that PTC's business model is killing innovation and is a lose-lose situation.  Currently maintenance includes technical support, minor version updates/builds/fixes, and new major versions.  This means that PTC has very little stock in improving its own software.  This hurts both PTC and the customer.

 

I propose reconsidering this business model by doing the following:

  • Split current maintenance cost into 2 categories: Maintenance and new products
  • Maintenance cost should only be for maintenance.  More specifically the following:
    • Technical support
    • Patches
    • Builds (including software compatibility updates)
  • Why are major upgrades included in the cost of maintenance?  New products should have the mutual incentive to get more capability for the user and more money for the software company (PTC).  If the capability is not with the cost to upgrade, then the user doesn't pay for it.  If the user sees significant improvements, than the user buys the new software.  If PTC doesn't earn the business, they don't get paid.  If they earn the business the get paid.

 

This would put huge emphasis on PTC adding value to their software, and make sure they get a piece of the cake too.  That way everyone wins.  In order to essentially increase new product cost maintenance cost would have to be proportionally reduced.  Otherwise companies would be very upset at paying the same amount for less value.

 

Like anything there is a good way to implement this and a bad way.  The bad way would be to lower cost a few buck, remove major releases, charge a lot for major releases, and then major releases mainly contain fixes and software compatibility updates.  The good way is to create an incentive for product innovation so that the CAD industry does not remain "stagnant" towards innovation.  How many areas of Creo have received NO updates in the last 10-15 years yet are in drastic need of even basic updates.  What motivation does PTC have to fix?  They are not going to get new money if they fix these things.  They are just trying to keep people not upset enough to change to a different cad vendor (which they know is extremely difficult/costly so they have a large frustration tolerance).

 

Please post comments below as this could produce some good helpful discussion.  if you think I am wrong post why and suggest better ideas.  I just think cost to use licensing is killing product innovation and am brainstorming for a better way.


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18 replies

LawrenceS18-OpalAuthor
18-Opal
September 29, 2015

I should think that this is a good spot to deal with anything to do with how they license and innovate.

As for what they innovate and specific details on how they may seem like a good PLM, I should think a good place would be in the following thread, where that discussion is already taking place:

Windchill vs competition

It was started by a Chris C, but it seems there are multiple Chris C's on this forum so not sure if that is you or not...?

Look forward to hearing both aspects from you!

1-Visitor
December 15, 2015

Subscription selling models will hurt everyone in the end, especially when they eliminate standalone software. Think of the cost of moving everything one piece at a time when the costs get out of control and they stop adding features.  They change the file protocols for storage to save space on their side and in order to go to a competitive cad package you have to wait for that software to catch up.  Basically you are stuck paying a subscription and are no better off in the long run.  No control over pricing do to you needing a license in order to continue working or suffer the down time migrating data over to a new system.

Don Anderson  

LawrenceS18-OpalAuthor
18-Opal
December 15, 2015

DON ANDERSON , Don't forget to vote if you agree that they have to change the way they are handling licensing.

I agree in so much as I don't like the idea applied to subscription licensing only.  That being said, it makes more sense for the aspect of system management or drive storage involved.

For example paying $100/yr for Office 365 is ridiculous to me.  However I do understand that subscription for OneDrive type services makes a lot of sense.  Then they blur the line by including cloud storage with licensing cost, which is frustrating!

12-Amethyst
December 16, 2015

Hi Lawrence

I think life is going to become more expensive for end users.

I personally hope that PTC will keep their existing models (buy software and maintain it) but also add in parallel the subscription models.

I see advantages for both depending on your business needs.

A company who has a core business with a core number of people (that is have ~100 engineers year after year) is better off buying the software. However a company who is more project oriented and have resources going up and down very quickly may be better with subscription.

Ideal, I should be able to buy the software as required. Ie buying the software when I know some people will need it for many years but also subscribe on ad-doc basis.

I am learning more and more about Windchill 11 and there is something I clearly do not like.

It seems that PTC is keeping their traditional licencing model for what already exist such as Creo/PDMLink etc… but all the new modules and functionalities what they call the Windchill apps are all on subscription models (including things like Thingsworx).

I see a strategy here where more and more of new functionalities  (modules,. Apps whatever you want to call them) are having only one type of licence ie subscription and in a few years, this will represent most of the portfolio so someone at PTC will say, “You know what 10% of our licences are still on the old model (buy the software), let’s crap that now since all of our customers are now used to subscriptions.

Well, I hope I am wrong. I do not want to be FORCED to subscriptions. We know that it has little benefit to end users. The only benefits is revenue for the manufacturers. A mix of both for the reason explained above is definitively a benefit for end users.

Someone to challenge my view

Best regards

12-Amethyst
December 16, 2015

To be more specific to your comment.

I see no reason why being of the cloud drive to subscription. Private Cloud could be the answer

23-Emerald III
December 16, 2015

How do you handle a subscription license when you are not connected to the internet? My production environment has no connectivity to the internet so all web-based license and support models are useless to me.

I have had many discussions with PTC, up to the VP level, on support when PTC is spending their money developing web-based support tools. When I have a problem, I need to talk to someone about it and have them give me solutions. I cannot run some special diagnostic tool that generates reports to be emailed directly to PTC. When PTC wants to see a log file, I have to print it, scan it back in as a PDF and then send them that. No files come off my production system electronically.

12-Amethyst
December 17, 2015

Hi Ben,

fair enough. I guess within their customer's portfolio only a limited number of customers are in your situation.

However, this is what I mentioned, they should continue with the current model and also provide subscription but NOT replacing current model with only subscription.

Best regards

LawrenceS18-OpalAuthor
18-Opal
December 18, 2015

There seems to be some confusion over what Subscription Licensing is and means along with what pros/cons it may have so I started a separate discussion of this on the following page.  I hope that allows more people to be involved in this focused discussion (remember not everyone can see Product Ideas).

Subscription Licensing (w/o Cloud) VS Perpetual Licensing (w/o Cloud)