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The complete (and corrected) lapsed version penalty story

August 26th, 2008 Leave a comment Go to comments

 A reseller friend of mine set me straight on the entire lapsed version penalty story. Thanks, I appreciate it. I was making it a lot worse than it was. I have to apologize to jiminmpls for mistakenly laying into him. 

Regardless, it’s still throwing money away. The penalty was the catalyst for the whole discussion, but it turns out to be a footnote in what people are most upset about. Anyway, here is the straight scoop: 

With the new policy, effective October 15, 2008, a customer who purchases SolidWorks without subscription and decides to add subscription:

 * Purchase subscription 1-2 months after SolidWorks purchase: total cost $100 + annual subscription

 * Purchase subscription 2-4 months after SolidWorks purchase: total cost $500 + annual subscription

 For lapsed SolidWorks maintenance contracts:

 * Renew subscription 0-1 month late: total cost $100 + annual subscription

 * Renew subscription 1-3 months late: total cost $500 + annual subscription

 * Renew subscription between >4 months and within 1 year late: total cost $850 + annual subscription

* After 1 year: total cost is total years missed x $850 + annual subscription

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  1. August 26th, 2008 at 21:01 | #1

    As noted, this is a footnote. The real problem is the subscription itself. I think your efforts so far have been valuable in getting customer feedback to provide to SW in an organzied fashion.

  2. John_P
    August 27th, 2008 at 07:54 | #2

    SolidWorks used to offer an “upgrade only” option for obtaining the latest version. It cost $995.00.

    In my 10 years of selling SolidWorks only a handful of people ever selected this option. Probably due to the small price delta to purchase full subscription service.

    We offer a $500.00 technical support agreement for SolidWorks users that were not on subscription. Again, very few people choose this option.

    Based on the comments posted on this blog, these are two options that users want. From my experience, users seem to feel that full subscription service was a better value.

    Our company has continually re-invested the profits from subscription service to hire and train additional support engineers. I suspect most other resellers do the same.

    If users feel their VAR is not providing adequate support, they should contact SolidWorks and log a complaint. SolidWorks does pay attention to these issues, and works with under performing VARs improve their response time and quality.

    It is disheartening that bloggers feel that SolidWorks is some corporate giant, with no empathy towards their customers needs. I think that SolidWorks 2009 is a perfect example of their desire to provide an excellent product, with tangible results from users feedback.

    While we can all agree, more work needs to be done, bashing them in a public forum, based in inaccurate information is not going to help solve these issues.

    I realize I might sound like a naive shill, but I truly feel that SolidWorks is a good partner for customers, VARs and 3rd party software developers.

    ****
    John,

    I accept whatever criticism you have to offer. I was initially wrong about the policy. I was adding in all of the back maintenance charges. SolidWorks does not make this policy easy to find, so it’s easy to see how misunderstandings can erupt.

    Providing a $995 upgrade when full subscription is $1295 is not really cost effective. Yes it’s an option, but not a great one. Is your support really only worth $300/yr? Plus, people don’t take that option because they didn’t know it was an option. What is the option to buy an upgrade, skipping a version?

    It looks like the consensus here is that reseller support is the thing most folks want to get out from under. I can understand why people wouldn’t pay the $500 for something they don’t use. Plus, that’s $500 per license, not per company, and you wouldn’t agree to support a company with 10 licenses for just $500, would you? The 1:1 support fee per license deal doesn’t make any sense. You don’t see 10x the support traffic from 10 licenses that you see from a single license. The bigger the company, the worse the value. SW’s volume discounts are (or were in my day) laughable.

    Also as Jeffro says, this isn’t exactly the kind of conversation users can have in any sort of SW controlled environment. If we take these issues individually to SW, they will be shut down individually, divide and conquer, as I said before. The only place we can talk about this is in independent areas. I know SW is very sensitive about how much customer dissatisfaction makes its way to the ears of competitors. In fact, that is more than likely the major concern, and the reason why each of us saying this in a private enhancement request would have exactly zero effect.

    You mention 2009 as a model release. I think there was a backlash against 2008 that got SW’s attention. You say that some information is incorrect. SW is not exactly forthcoming, nor are its VARs, when it comes to information like how big a hit 2008 caused. What was the underlying cause of the penalty fee acceleration? The only thing we can do is speculate. Again, lack of information leads to misunderstanding. Even if the data were offered, I don’t trust any information that is spin doctored out of corporate. Not to say these people are dishonest, but they will frame it in the best possible light, which might include things that other people feel border on misrepresentation.

    Plus, I’m obviously not making this up. Real users have real issues here. If I were full of crap no one would read this blog, or comment on it seriously. You can’t just say all of these users are misguided. At some point you have to listen, even if you don’t agree.

  3. jeffro
    August 27th, 2008 at 08:57 | #3

    “While we can all agree, more work needs to be done, bashing them in a public forum, based in inaccurate information is not going to help solve these issues.”
    What other means do we have to voice our opinion? Through Enhancement Requests or the VAR channel? They are both black holes that ideas get tossed into. The majority that have posted here on this topic have been professional, respectful and constructive in their criticism. I think your statement that this is a public bashing is inaccurate. I would say that with the visibility Matt gets on this blog that a good number of people will speak up and either post here or respond in the Customer Portal forums. It would be interesting to hear your ideas on a better means of communicating these issues. And please don’t say a conference call with Mr. Welch.

    “I realize I might sound like a naive shill, but I truly feel that SolidWorks is a good partner for customers, VARs and 3rd party software developers.”
    While at one point everyone would probably agree with that statement the fact is that SolidWorks has become more focused on gaining new users with shallow flashy features and losing the respect of experienced users who have been patiently waiting for better performing software, better documentation and for SolidWorks to turn back to a user driven company. In my opinion they have “jumped the shark” and there’s slim chance of turning back.

  4. Rick McWilliams
    August 27th, 2008 at 13:39 | #4

    Solidworks is sending small users a message with this penalty and catch up fee schedule. The message that I receive is Solidworks does not care about users, productivity, or documentation. I an looking for alternatives. I know of three small companies that have single user Solidworks who decided to discontinue subscription because of the bizarre penalty policy.

  5. Kevin Quigley
    August 28th, 2008 at 08:53 | #5

    I’ll throw my comments into the ring as well but mainly about pricing in general. As everybody knows SolidWorks is a lot cheaper to buy in the USA than anywhere. I have asked some very senior people in SolidWorks about this over the years and I get the same response all the time – costs of marketing, costs of localised ofices blah blah blah. That might have been the case in pre-internet days but not any more. These days development is done globally, marketing strategy is global via the net, and advert artworks are pretty much global as well (aside from languages). Delivery of media is cheaper now via internet and DVD.

    Getting onto subscriptions now. In the old days we used to recognise that subs paid for updates and service patches. The first company I bought SolidWorks for paid the VAR £250 a year for telephone support – per seat – on top of the £1000 a year for maintenance.

    These days however we have online support via forums (official and non official), the blog squad, and other commercial and semi commercial online sources. In all seriousness there is nothing I can ask a VAR that I cannot get an answer for – quicker – via a forum.

    So what are we paying for again? Let us remind ourselves.

    1. Access to the customer support portal
    2. Access to maintenance patches (read bug fixes)
    3. Major upgrades
    4. VAR telephone support

    Now here in the UK the cost for this is:

    1. Standard – £1000 a year (approx $2000)
    2. Office Pro – £1250 a year (approx $2500)
    3. Premium – £1500 a year (approx $3000)

    These prices are on a par with Inventor, SolidEdge and Pro/E BTW.

    Leaving aside currency variations, support is a global offering. So why do I pay nearly double for the SAME product, with the only variant being VAR support?

    Maybe the VARs are taking a huge slice then? No. I know a lot of VARs in the UK and they are all pretty uniform in the comments. It would be cheaper for them to fly to the USA, buy a copy of SolidWorks fly back to the UK and sell it for standard UK price – if they were allowed to do so.

    The VARs need to make money as well and a good VAR is worth their weight in gold, but VARs really only make any money on the multiple seat deals where they can justify having a separate support contract deal.

    In the AEC sector for example, most VARs offer upgrades plus a support contract covering the company or per incident costing. This is what Microsoft do as well.

    To me it is a simple equation:

    1. Access to bug fixes in major releases – should be free (I mean, if you buy a product and it has a defect you are entitled to get it repaired or replaced, right? Why should software be different? Has this ever been tested in court?). This free update is offered by everybody outside the MCAD sector from Microsoft down to one man band software houses. So why do we pay?

    2. Major upgrades – pay – obviously. Upgrade price is based upon the level of package you currently use. So from the most recent to the latest it is one price, from 2 versions back higher, etc. Up to a limit of maybe 60% of the cost of the new package (which incidentally ties in with what the likes of Adobe and Microsoft do). This price should be global or as near as damn it.

    3. for multiple seat installations or anyone else the VARs can offer their own support structure priced accordingly.

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