Letters To The Editor: More On Pricing To The Web

Our article on Novell’s new pricing got a speedy reply from Novell, who wants to point out that for customers who are setting up web sites to interact with specified customers (or in the case of governments, citizens), their model is less expensive and appropriate.  We stand by our previous comments, but wanted them to be able to have their say.

Thanks for your thoughtful reply and offer to publish my letter. I’ve taken the liberty of revising it to address your concern about how the licensing scheme operates in a self-service environment.

While it’s true that Novell’s software is based on a named user license model (although some products are available on a CPU basis), it’s not fair to state “that Novell ... continue[s] to show a remarkable lack of understanding for their customers’ needs.” We have spoken with our customers about their usage of these licenses and this model does meet their needs.

Novell’s customers are not using these licenses to maintain a web site visited by casual anonymous browsers. They are using our secure identity management products (such as eDirectory and iChain), to enable and manage access to internal information resources. Given this scenario, the usage of named user licenses is perfectly appropriate for corporate and government customers, who need to actively control access, based on the users’ profile.

Novell customers are not required to “identify in advance and buy a license for every potential customer or citizen [they] might need to service.” They can purchase a pool of licenses in units from 1 to 100,000 (or more) at time, and replenish the pool as users are registered and licenses are consumed. They also have the option to pay for the licenses in arrears, as they are used, rather than up front.

The process of creating a unique profile for an external end-user can be configured to automatically provision the appropriate license key(s) for that user in a self-service scenario, without requiring manual intervention by the site administrator. Of course, the system administrator has the ability, using Novell’s tools, to modify the profile, if needed, and change the user’s ability to access internal information resources. If a profile is deleted the license can be allocated back to the pool for reuse.

Given that the premise of Novell’s secure identity management products is that the customer needs to know who the user is, in this case the “thinking behind the business models” is appropriate.

Bob Craig  
Analyst Relations  
Novell, Inc.  
rcraig@novell.com

Bob,

I appreciate the differentiation you’re making in that where the buyers of the software are buying the software with a need to identify their customers, named licenses might be deemed less onerous, but I don’t agree that this is the right approach.

That’s because of the administrative style that managing a successful and highly scalable web site requires.  So much depends on being able to offer self-service.

I don’t want to say that you can’t use the Novell pricing model and make it work.  I do want to say that I believe business customers (owners of consumer or government web sites) do not find it the easiest or most preferred model to work with.  I was using Novell as the poster child for a favorite complaint of mine, as I hope I was trying to make clear -- that traditional software vendors may not understand that new pricing models may be required for new architectural and service models.  I regularly take vendors to task for doing this.

We are expecting two things to happen this year and next:

1. Lots of new, purpose-built-for-the-web software which is priced with the self-service model in mind (no named user pricing)

2. Some traditional software vendors moving to per CPU prices for situations where the customer needs an intranet or extranet without the need to administer named users.

We think the market will make it clear what it prefers.

Amy  

 

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