Subscriptions vs. Outright Purchase vs. OpenSource

[frederick]

I've cruised the forums, these last few days. I've had NOC duty, stupid short straw...I own majority of this company and I get stuck with read a book for 5 days...

But anyways, I've learned a lot, and I have to say, good setup, I like the feel of the room, some really good advice going on. But I would like to throw this down if you will:

1) I look at the customer first. And by this, I look at how I can save them money, while I make money. People ask me why I don't sell parts, or sell computers. Well I do, but I never push them to buy what they don't need. If you don't need a new computer, and I can get your computer back running like new in under $200, I'm happy, your happy, I'll see you again. I think a lot of that boils down to my experience. And that's why a lot of my customers are repeat, my experience, as well as my employees do it right, do within time, and get it done the first time.
2) I've bought a few programs in my day, and I paid a subscription for them, but they were also MMO's. I was paying for support, updates, and to fly space ships and go pew pew. I was using their SERVICE and their PROGRAM.

So this is where I am getting.

Subscriptions, they are nice, granted. But I dislike them, a lot. I don't care if its a dollar a month, per license, per use, whatever. Sometimes, I think it is warranted, when I am using their SERVICE.

By service, I am specifically referring here to we have left the program, and now I am using their servers, their internet, and whatever they need to provide me the said content. This is called an ASP, or application service provider, for those not in the hip with acronyms. If I buy your program, and then I have to pay a monthly fee, for each use, then I better be using your SERVICES as well. Subscriptions become a cost that I can never recover from. Let me explain. I purchase something for $1000, I can charge a customer said cost + a little extra for me. I can recover the $1000, and I can keep the cost down so I can offer it to my customers at a lower rate. Especially if it is a continuous service, like say remote monitoring. I can easily recover my $1000 over time, while paying my employees and having little effect on my customers. Now if I have to pay say $1000/month for a program, I will never recover that $1000 because the debt will always be there, and because of that, I can not give my customers a lower price, because I have to charge them the $1000 + a little for me + pay my employees. My profit gains are less. This may be exaggerated, but you get the idea.

If I buy your program (disk, download, whatever), and I do not use your SERVICES, then why should I pay for a subscription? You might say something like continued updates, continued support, etc. But here is the thing, why should I pay for updates, when you released a program full of bugs. You said it would work on this computer, you said it would work on this build, and neither of them are the cause of the bug. You are now responsible for this said problem. Are you not responsible when you install a server and the OS is unstable from the start? Who pays for that cost? You do. If I purchase your program, I should be entitled to a limited time of support. For example, I have a client, he bought a program for $8,0000, no joke, for his business. I love and hate this program because it is difficult to integrate and get going, and over the last few months, their technical support has assisted us in making sure we get it going. By the way, our free Technical Support expires in 5 months, but that's ok, we can buy additional support, for another year for $500, but only if we really need it, otherwise its something like $13/hour for technical support. What about upgrades? What if I don't need an upgrade, what if I'm happy with what I have? When I need an upgrade, I'll call you. Same goes for windows, you buy windows 7, and you can upgrade to windows 8 at any time you so please, that's why I like windows, they never pressure me to upgrade, or even to update (cause it either does it automatically or I do it when I feel like it).

OpenSource. Apparently this is the bad monkey in the room, that must be beaten to death and kicked out. I've mentioned somewhere on this forums I use Nagios Development Core. I've transformed it in to what I need, and yes, it does take man hours to implement and integrate in to my clients network, but because I use a probe to auto discover, and then configure it to it report back to our NOC, and we from there can tell it how it will report, what it will report, it makes customization nice. Where you are spending money on a subscription, and charge your customers accordingly, I don't. I charge my customers simply the monitoring fee, rather that also for the program. I think OpenSource is amazing, it allows me and my techs to keep up on our development skills, troubleshooting, and also brings a little pride in to them when they can stand there and say "i did that", and they actually know why it does what it does, and what to do when it doesn't.

So this all comes back to the customer. With a subscription, my cost for my services will always be higher. With a purchased program, costs are marginal. With OpenSource, I am more than capable of charging my customers what I want, as low as I want for the service. I have enough overhead: electricity, maintenance, payroll, sending my techs to training, etc. Why would I want to add to that for a program that sits on my server/computer and uses only my resources or my clients.

Now I'm not going to knock anyone for using a subscription, but a lot of people continue to say "you pay for what you get", while this is true in a lot of cases, paying a subscription does not mean it's better. Cause I stand by my server, that runs my Anti-Malware Scripts, that I update regularly, and go, I can charge for less to remove a virus from your computer than that guy over there, because all I have to do is plug your computer in to this and walk away for a couple of hours. It will let me know when it is done. I'm basically charging you for electricity, and upkeep for the software and script.

Don't knock opensource. It may take me time to get it doing what I want, but at least I can keep my costs down, because I don't pay a subscription.

Each day, we find improvements on deploying our stuff, each day it is easier and easier. Though we are still wanting a replacement for Nagios, but not if the only options are pay a monthly/yearly ransom.

 

[moss]

I use virtually nothing but open source/free software at home, at work (large organisation) I have implemented Fog for desktop deployment (http://fogproject.org/) but 99.9% of the software we use is commercial/propitiatory/closed source. Fog is an absolutely fantastic piece of software for image based desktop deployment. This is the second organisation which I've used Fog to replace commercial solutions and the speed/cost savings must have saved tens of £1000's.

I've recently been testing Icinga/Icinga web which is a nice front end for Nagios and Ninja from op5 looks quite nice too.

I'm looking to start an IT business in the near future and although I love open source/Linux etc its not something I plan to push onto customers too much, at least at desktop level. I do plan to implement Nagios based solutions over commercial based solutions when it comes to monitoring and possibly use free software for other back-end/server solutions.

 

[YeOldeStonecat]

there are some decent open source products out there, we've used many of them, they have their place.

However, a lot of your logic below doesn't settle in right.

If I buy your program (disk, download, whatever), and I do not use your SERVICES, then why should I pay for a subscription? You might say something like continued updates, continued support, etc. But here is the thing, why should I pay for updates, when you released a program full of bugs. You said it would work on this computer, you said it would work on this build, and neither of them are the cause of the bug. You are now responsible for this said problem. Are you not responsible when you install a server and the OS is unstable from the start? Who pays for that cost? You do. If I purchase your program, I should be entitled to a limited time of support. For example, I have a client, he bought a program for $8,0000, no joke, for his business. .

"when you released a program full of bugs". By that logic, you're saying that every software product should only have a version 1...that is never further groomed, never updated...because it work 100% perfect from day 1? By releasing version 1.1...the developer is admitting that version 1 was faulty and he was premature in releasing it?

Nah ah.....software is always developing. Operating systems get updates...both bug fixes, performance enhancements, security holes filled, new features...tons of reasons for various updates. Because of those, software that runs on it needs to be updated to remain compatible. Not to mention..when a whole new operating system platform comes out..."the latest version of Windows"...software that runs on it has to be overhauled and updated as well.

Lots of businesses run on LOB (line of business) software that needs to be continuously updated. Accounting firms for example...their software is continuously updated, almost every month..with updates for tax rules. Healthcare agencies run on software that is continuously updated with new data, and medicare submittal tools that are continuously updated. I could spend hours and hours and fill pages of this forum with software that needs regular updates for an actual legit reason other than "bug fixes".

You say you "have a client that spent $8,000 on a piece of software, no joke"...is "no joke" meaning we're supposed to be in disbelief? 8 grand is nothing for an LOB app for businesses...I have some clients that have spent over 100 grand on software, with annual support that is over 10 grand. And I'm just SMB....these are clients of under 100 staff...wait til you see what larger and enterprise companies spend on their main apps.

From a business perspective...you (your time)..and your techs...time that you spend working on, figuring out, developing, customizing, fixing, troubleshooting....yes at the end of the day you can say "I did that!". that's all great 'n all...but "I did that" doesn't pay the bills, doesn't pay the mortgage, doesn't put food on the families dinner table. But more importantly...the point I'm getting at, is with this approach...you ARE paying a subscription fee that is holding you ransom. Your time..and, unless your staff are volunteers....payroll! If you were to run time management at your office, and you added up the time that you and your employees spent supporting your own sourceforge house projects...and calculated the cost in payroll to cover those hours, you end up actually spending more! You can counter with "but I'm supporting myself and my employees"...well, if you want to cover yourself that way, it's your choice. But I'd rather spend that time otherwise....by going out billing, or getting new clients, or catching up on paperwork on my desk, or spending time with family.

Effectiveness of sourceforge products....I can't say the always stand toe to toe with commercial big names. I'm not alien to open source, I've downloaded and played with and used way more opensource products that most techs even know exists. But I don't want to support it. Because that takes time. Time that I can't make up...time that takes me away from billing.

I'm a reseller of Untangle...the base version of their product is free, open source. But we resell the higher end packages to our clients, namely for support..and to make money. If somethings wrong with it, I can spend 5 minutes on the phone with Tony from support and it's fixed. Rather than spend lots of my time trying to pour through their forums.

We sell a monthly service to our clients....spam/virus filtering of their e-mail. MX record goes to our appliances, and then to their exchange servers. There are no open source mail filtering packages effective enough for this...I've played with lots of them...and the basic combination of spamassasin and clamav is not effective enough. Plus..I don't want to deal with spending my time to fix an issue. Just last week I had 1 client on our appliance that had some issues, for some reason legit e-mail for his office was being rejected due to failing recipient mailbox verification. I opened up a ticket with our appliances support..30 minutes later support e-mailed back saying they dialed in, found something unique with the latency with this client causing DNS delay, he made some tweak in the appliance specific to this clients mail relay..and it was done. All while I was out doing other things.

To recap...I never call open source the monkey in the room that needs to be beaten. Like I said, I've used lots of it over the years. Early on I tried using as much open source as possible to give us the tools that the big boys had. And it's natural for startups with limited budgets to try to do that. But I found out..time is money..and that includes my time. I want to be an SMB consultant...not a developer.

 

[brandonkick]

Having studied software development / engineering, I can say your attitude about putting out perfect software the first time is just plain flawed.

The development life cycle continues for more reasons then one, and that development costs time and money. Sometimes bugs are found so late in the testing stages that it would mean a huge loss to send it back "around" for fixing. They calculate how critical the bugs are, and how much it would cost to let them go as is and fix it later vs putting it through another development cycle.

It shouldn't be seen as "Well screw that, I know it's perfect but that isn't coming out of my checkbook". There should be a fundamental understanding that perfect code isn't a realistic target. Properly functional code with acceptable performance is more of a realistic target.

As far as subscription models go, think of it from the developers point of view.
Development costs are often astronomical compared to what the average uniformed person might think they are, and those costs not only need to be recouped but exceeded if the company hopes to stay in business. In order for a company to sell that software for a one time "reasonable" fee, their would need to be a large target base with a good percentage of adoption. Otherwise the one time cost would go way up and almost no one would buy it.

As far as the open source stuff goes, you need to consider if it is worth "reinventing the wheel". There are tons of great premium joomla plugins out there, and while you can write the code yourself there is no point most of the time. Unless you a really fast, really good code writer with no other betting things to be doing with your time.

 

[frederick]

Time management is something I'm very familiar with. I'm not saying they have to release an unflawed program the first time, I know how the development process works. We do prototyping, and db creation for businesses as well as some software. We know it has bugs, and at least for the software side, we have to release updates.

I've seen a lot of animosity on the forums about open source. And open source has been amazing for us. Weve gotten more out of it than a lot of the programs we test dove. As far as our employees time, its what NOC duty is for. He who is in the NOC typically acts as dispatch, watchs the monitors, answers the phones, does shop work, remote support, and works on development. In actuallality, I have an employee, who is doing his job, and more. So it doesn't cut in to my profits. Why have all my techs in the shop doing the same thing when one can work I the shop getting stuff done and directing us? I don't know about you, but we don't get a lot of computers needing to be torn down everyday, or have a lot of computers needing to have a tech over it for hours, run a scan, do something whole it runs, get back to doing whatever else. If you have techs sittig in your shop, we just have 1, then keep them employed.

This is why opensource works for us. Subscriptions for a lot of the programs I've seen have not shown me they are worth the long term investment. If you are telling me they need to cover their development costs, then maybe they aren't charging correctly. Versions exist for a rwason, new features, new capabilities, etc. I get the update thing, but how often are you going to send out an uldate? How often am I going to call support? I don't see the ROI on this

 

[brandonkick]

So then it seems for you, that the open source software fits your needs very well. It does what you need it to do, you can configure it to do what you want it to do and you don't need premium support or consistent updates.

But I can see the flip side as well, where the subscription cost is easily worth the time and money it saves.

 

[Magic Miguel]

Time management is something I'm very familiar with. I'm not saying they have to release an unflawed program the first time, I know how the development process works. We do prototyping, and db creation for businesses as well as some software. We know it has bugs, and at least for the software side, we have to release updates.

I've seen a lot of animosity on the forums about open source. And open source has been amazing for us. Weve gotten more out of it than a lot of the programs we test dove. As far as our employees time, its what NOC duty is for. He who is in the NOC typically acts as dispatch, watchs the monitors, answers the phones, does shop work, remote support, and works on development. In actuallality, I have an employee, who is doing his job, and more. So it doesn't cut in to my profits. Why have all my techs in the shop doing the same thing when one can work I the shop getting stuff done and directing us? I don't know about you, but we don't get a lot of computers needing to be torn down everyday, or have a lot of computers needing to have a tech over it for hours, run a scan, do something whole it runs, get back to doing whatever else. If you have techs sittig in your shop, we just have 1, then keep them employed.

This is why opensource works for us. Subscriptions for a lot of the programs I've seen have not shown me they are worth the long term investment. If you are telling me they need to cover their development costs, then maybe they aren't charging correctly. Versions exist for a rwason, new features, new capabilities, etc. I get the update thing, but how often are you going to send out an uldate? How often am I going to call support? I don't see the ROI on this

YeOld doesn't have a shop where people bring stuff in to him, he's focusing on where the money is at, businesses. He isn't a break/fix guy. All the stuff he posts makes complete sense. He stays away from things like open source, Best Buy specials, etc. so that he and his clients are both happy. It makes sense if you open your mind up to it. I know being a tech, sometimes perhaps even having asperger's syndrome can kind of shut your mind off to other opinions or alternatives out there but they're out there, be a little more open minded. You've come out of the gates swinging at everyone on this forum from all of the posts I've seen from you. It seems like you're very argumentative. Relax a little, go out and find more work so you're so busy that you can't even post on the forums anymore!

 

[altrenda]

Can you give an example of the type of software your are referring to?

Alos, I have not seen open source ridiculed as you say. There are many fans of Linux, both as an OS and as a useful tool in the evaluation and repair of computers. Lots of other Open source or GPL'd software, like DDrescue, Memtest86+ get mentioned here daily.

Not everyone has the luxury of utilizing "free" downtime like you. We don't run a NOC, so we don't have an employee sitting around getting paid. if we are waiting for a scan or or something, we work on other projects that we can bill for. Its not unusual to bill 4 customers an hour each in a 2 hour period.

Modifying Open Source software works for you. That's great. For us, when a customer has a problem that we have not seen before, it's nice to rely on the developer who maybe has seen it many times and knows a quick solution. We fix the customers problem, they get back to work and we move on to the next one. That works for us.

 

[codegreen]

Personally, I run most of my own business using open source software. I have various clients using Linux servers, and I support quite a bit of open source software, all of it top quality stuff. For example, I have set up several clients with Alfresco, a top-notch document management and collaboration system that compares favourably to any proprietary software in the same space. One of my clients in the mapping business makes heavy use of open source geospatial software, which I happily deploy and support. Plus, I use Nagios myself to monitor all of the Linux servers hosting these open source applications, and Puppet for administration; they're high quality and perfect for this situation, so it only makes sense.

When crafting an IT solution for my clients, I always keep two things in mind: what is best for the client's business, and what works for my business? "Open source" is a very broad category of software, and there is a lot of crap in that category... just like there's a lot of crappy proprietary software. And yes, more than a few techs equate "open source" with "freeware" or a cheap solution, but let me assure you that when I set up a Debian-powered Alfresco collaboration server, it sure ain't cheap, price-wise or quality-wise. But it does mean that the client's upfront investment gives them a predictable, stable upgrade path with no ongoing licensing costs.

I do think you're off-base slagging off subscription services in general, though. For example, is it possible to offer managed services to Windows-only businesses using nothing but open source software? Possibly. But it would mean taking a lot of time researching, testing, customizing and deploying, not to mention the expense of hiring at least one developer on contract to make the needed source-code level changes. I can't see any reasonable business case for it when I can choose from a variety of excellent managed service subscription options that are ready to do the job as soon as I sign up. When I compare the profitability to my business, and the level of service to my client, there's simply no justification for me to cobble together an open source system that still couldn't do half of what GFI Max or N-Able can do. And what in the world would I use for a managed antivirus product? (ClamWin? ) For this situation, going with open source to save on subscription fees is penny-wise and pound-foolish.