[Info-vax] VSI Subscription Licensing Response Letter

[Arne Vajhøj]

On 5/27/2021 8:11 AM, Simon Clubley wrote:
> On 2021-05-26, Arne Vajhøj <arne at vajhoej.dk> wrote:
>> On 5/26/2021 2:54 PM, Simon Clubley wrote:
>>> If the vendor is willing to sell a new support contract at a reasonable
>>> price increase but the customer says no, the escrow becomes invalid
>>> and cannot be used.
>>>
>>> If the vendor is only willing to sell a new support contract at an
>>> extreme markup then the escrow triggers (provided the escrow agreement
>>> was written to handle this).
>>
>> There are no escrow contracts that works that way.
> 
> I disagree. That is a natural thing for any customer to worry about.
> 
> If this isn't addressed, then what is to stop any successor organisation
> to VSI demanding a 500% increase in the annual licence fee in order for
> the customer to continue receiving licences ?
> 
> They know the customer would have to pay the fee or the customer could
> go bust. Any reasonable customer is going to want to make sure they do
> not find themselves in this position.

I totally agree that it is a natural thing for customers to worry about
and that it needs addressing.

But to get it addressed then we need a model that makes
everybody happy.

Customers need to know that they can be sure to have a license for
a number of years.

VSI needs revenue.

VSI creditors needs asset preservation.

>> Try to turn it around. What if VSI wanted customers that buys a
>> license for X for N years to deposit a huge sum of money that
>> would go to VSI if the customer did not want to buy a new
>> license period. Totally crazy right. But the other way around
>> is just as crazy.
>>
> 
> Not the same. VSI wants the customer's money and so the customer
> gets to decide the terms under which they are willing to hand over
> money to VSI in return for VSI's products.

That is not how business works.

If it was then I would go down to the Rolls Royce dealer and
ask  for a car for 100 dollars.

A business agreement requires two parties to agree on terms, so:
* customer must be willing to hand over the money for the
   good/service
* vendor must be willing to hand over the good/service
   for the money

The problem with escrow is a little special because VSI
most likely do not care at all - it will will only apply
if VSI goes under - if they don't they don't care - if they
do they don't care.

The problem is with VSI creditors. They will not like
VSI assets to be given to customers as part of an agreement
made by VSI.

And in the end that means a risk to the customers. VSI creditors
could go to court and claim illegal transfer of assets. Maybe their
chance of success is only 5% or 10%, but could customers live
with a 5% or 10% probability that their in escrow permanent
licenses would be invalidated by court? I don't think so.

There are many other models.

The escrow model could be changed to a model where in case
of bankruptcy customer got the right to buy permanent licenses.
As soon as it is a buy not for free, then it becomes very
hard to ask for voiding as an illegal asset transfer.

There is the model I suggested with rolling license
extensions to ensure people have 5 years. Or maybe increase
to 8 years. VSI will not complain about more prepayment. And
I don't see VSI creditors being able to complain about
VSI entering multi-year contracts.

VSI already said that it would be possible for some (nuclear
power plants was given as example) to still get permanent
licenses. Maybe that could be extended to cover more - maybe
everybody that does the appropriate song and dance with their
sales rep.

There may be other models.

But everybody that has a good idea should not just think
"does this solve the customers problem?" - they should also
think "will this work for VSI and VSI creditors as well?".

Otherwise the chances of acceptance is small.

We need a win-win-win proposition.

Arne