The complacency of subscription income

All large CAD vendor yearn to have all customers on subscription or maintenance. That gives the vendors regular paycheques, and tends to lock in customers for one more year. 

(There was some resistance towards renewals from some customers during the recent recession, but vendors fought back by pointing out that fewer subscribers at one site meant lower discounts and higher costs to the customers.)

Yesterday, I wrote about Google's J Rosenberg's insight that...

Complacency is the hallmark of any closed system. If you don't have to work that hard to keep your customers, you won't.

The purpose of subscriptions is to blinker the customer, allowing the vendor to operate in a closed, monopoly-like environment. A friend working at a mechanical design firm tells me his company is paid up to SolidWorks 2010, but continues to use 2007.

The complacency of subscription income could endanger the future of CAD.

Comments

[Dave Ault]

Truer words were never spoken RE cad and cam companies regards for current user woes. When selecting a program for daily use becomes a matter of picking what flaws you can live with best there is a serious problem. And then you see subscription money spent on window dressing for enticing new customers and the long standing serious impact your day stuff does not get fixed for years. And the idea of using current subscribers as beta testers and CHARGING them for that is another great benefit of yearly fees. I know a number of people that have bought the Alibre program while on special as they are thinking hard about value for money. I had to laugh while reading this article as there was an ad for Alibre on it. And you know what, I am going to buy it to because if I am going to have to deal with never ending problems at least if it costs a lot less my feelings won't be hurt as bad. Now after some use if it does what I need why would I ever go back. $3,000.00 per year fees for my current two programs has got me thinking very hard here about value for money spent.

[Tony]

We've dropped our SolidWorks subscription -- SW2010 doesn't look interesting, and there are better things we could do with the money.

[Mplafleche]

Subscription service is typically split with the CAD Vendor and the CAD Value Added Resellers. The Value Added Reseller uses this revenue to employ technical support engineers that the customer uses. Some of our customers stay on older versions of software to stay on the same version with supply chain partners. They still remain on subscription to take advantage of tech support services.

[R. Paul Waddington]

Two things, in particular, have been happening here in Australia in relation to subscriptions;
One is that Autodesk staff have been ordered to and have been ringing - customers with lapsed subscriptions - directly, not through the dealers and, leaning on those customers to re-subscribe using Autodesk's much 'higher from next year' fees for software as the scare tactic. Pressure selling at its worst with no regard to whether or not the customer will be better off.
This is neither an intelligent move by a technology tool supply company and not, using Ralph's words the way a 'business partner' would or should behave!

The second thing is to do with me personally and what has come to head when renewing my subscription; some of your readers Ralph, but not all, are going to be somewhat surprised when I detail the events of the last few weeks surrounding the recent actions of Autodesk Australia, two leading Autodesk dealers and my subscription renewal. But that's for next year.

For the moment I am going to enjoy CHRISTmas and I wish you Ralph, your family and readers seasons greetings and hopefully a pleasant and rewarding 2010.

[Kevin E]

Does R. Paul Waddington have to supply any proof about the things he says?

[Devon T. Sowell]

My company has been paying SolidWorks Subscription Maintenance for 9 years: 9 x $1,500.00 = $13,500.00, that's for one seat. In 2009 I called my VAR for Tech Support 3 times, that's $500.00 per call. Every year, my wife asks me, "Why do we pay this?" I'm starting to have my doubts too.

Devon Sowell
http://www.3-ddesignsolutions.com
http://www.pdmsolution.com

[R. Paul Waddington]

Kevin E,
What proof would you like and for which component?
- That Autodesk have been ringing customers easily verified by any individual.
- That there has been difficulty with my subscription renewal - you are soon to find out why!
- Or that I was going to (and now are) enjoy CHRISTmas and hope that Ralph, his family and readers (you included) also have a pleasant season and a rewarding 2010. (proof available now and at the end of 2010 - I guess)