[Info-vax] 1 year.

[Kerry Main]

> -----Original Message-----
> From: Info-vax [mailto:info-vax-bounces at info-vax.com] On Behalf Of
> Keith Parris
> Sent: 28-Jul-15 11:40 AM
> To: info-vax at info-vax.com
> Subject: Re: [New Info-vax] 1 year.
> 
> On 7/28/2015 4:36 AM, clairgrant71 at gmail.com wrote:
> > If people want to turn VSI into a support organization this
>  > is the way to do it. If VSI is to move VMS forward to future
>  > platforms with updated software we need to focus
> 
> Profit margins on services like support are significantly greater than
> those on software license sales, and an organization that integrates the
> two and values both will have more money to devote to R&D and thus a
> greater chance of long-term financial success.

Keith,

I would suggest some slight modifications of your statement:

Yes, support is a significant part of today's and future revenue streams. 

However, this support revenue stream degrades significantly if you are 
supporting non-std, no longer vendor supported products like VAX, 
Alpha.

Profitable support / consulting revenues are based on standardized
product offerings (as much as possible) and/or system integration 
where the skill level requirement is high and can justify higher hourly 
consulting rates.

The HW support vendor like HP TS field services can (and do) justify 
charging the Cust much more per month for out of date HW. I 
remember one Cust paying $1000's per year on support of each of their 
many old RZ drives, but its difficult to do that for the OS SW support 
running on the same out of date HW. 

A better support model is what Red Hat has adopted:
- over time, drop as many non-X86 platforms as possible (non-X86=
non-std = high costs)
- drop/reduce one time license costs that show up as capital costs.
these have high Cust visibility and require senior Cust exec approvals
- adopt monthly support cost license model which is a OPEX expense
that only needs low level Operations Mgr approval as part of his/her
support budget. 
- provides the perception (marketing) that Linux is cheap (few people
talk about the monthly support costs that enterprises pay)

Monthly OS support cost could be based on tier, SLA level, number of 
Instances and/or other criteria. The yearly support costs could also be 
Invoiced as a single invoice in advance, but again, that simply shows up 
on the Cust side as part of their OPEX support costs.

Regards,

Kerry Main
Back to the Future IT Inc.
 .. Learning from the past to plan the future

Kerry dot main at backtothefutureit dot com