This message was posted on Thu, 26 May 1994 16:03:23 -0400 by Jim Conklin
on behalf of Ken King, CREN's Executive Director. The message was sent to
the LSTSRV-L list, a forum for the discussion of L-Soft products. Most of
the people subscribing to this list are LISTSERV administrators, ie
people in charge of making purchase recommendations for L-Soft products.
This message was not an emotional, late-night reaction to some L-Soft
announcement: no announcement had been posted on that day, nor is this
message in reply to any recent discussion held on the LSTSRV-L list, and,
above all, the message was posted by Jim Conklin on behalf of Ken King.
This means at least two individuals were involved, and the resulting
message is by no means a spur-of-the-moment incident. For better or for
worse, it carries the full weight of the organization.
The message is being quoted in its entirety, with interspersed comments.
Because of the threat to the NJE network in point 4, I am copying this
message to the NODMGT-L and TECHREP lists.
> One of the goals of the CREN software acquisition effort is to
>protect its members from the rampant greed of monopolists. For those
>considering doing business with a company that operates in the style of
>L-Soft, the following advice may be helpful.
L-Soft does not intend to reply to such statements in kind. L-Soft's
style, for better or for worse, is to answer deprecating statements with
hard facts, products, and prices. Besides which, the fact that a
respectable, non-profit organization of higher education is driven to
such verbal extremes in the face of a company 1/10th of its size says a
lot more about the state of affairs in CREN than I possibly could with
1000 lines of carefully laid prose.
>1. Look at Schedule "C" of the CREN/L-Soft Agreement. That schedule
>states the prices L-Soft was proposing to charge CREN members before the
>Listproc acquisition was announced. At that point in time, the CREN
>transition plan from NJE to IP was presumably hostage to an IP version
>of LISTSERV.
Schedule C is a price guarantee, not a price list. CREN demanded a
19-month guarantee on the maximal prices for certain L-Soft services as a
pre-requisite for signing the CREN/L-Soft agreement. We provided that
guarantee by documenting our list prices - the corporate ones, as some of
CREN's members are for-profit organizations. CREN did not raise any
objection as to the dollar amounts, in spite of the fact that these
prices were higher than the package rates we had at that time. And it is
only natural that CREN did not object, as the everyday laws of business
dictate the use of package offers, introductory rates for new products,
and other promotional offers which are obviously more advantageous than
list prices.
>2. Be wary of prices to be set later when they have "more experience".
>For example, if a maintenance price is to be set later, and you're
>committed at that time, you may be subject to the rules described in
>item number 1.
There is no need not worry about that. The maintenance prices for the
unix version of LISTSERV will be announced and guaranteed for 12 months
when the product is released, as we have now gathered the necessary
information on the respective market shares of the various unixes, and
procured development facilities for the most popular ones. Purchasing
officers are not stupid, and ask such questions as a matter of routine.
>3. Get a complete definition of what a perpetual license means that
>distinguishes between a new release and a new product. For example,
>remember LISTSERV VM-TCP/IP is a new product requiring a new license,
>not an upgrade from LISTSERV VM-NJE.
The said perpetual licenses were granted, free of charge, to 150-odd CREN
members, in some cases as early as 1986 (note that these licenses were
granted by Eric Thomas, not L-Soft international Inc.) For 7 years, the
software remained available for free, and new versions were regularly
issued at no charge. Last summer, Eric Thomas decided to found a company
to offer a more professional (and entirely optional) service to the
existing LISTSERV users, and to use the proceeds to develop major
improvements, such as LISTSERV-TCP/IP and the VMS and unix versions of
LISTSERV. These products are now being sold by L-Soft international Inc.,
and indeed they are not available as a free license upgrade. None of our
customers so far appeared the least surprised when we informed them that
there would be something to pay. CREN appears to be alone in the belief
that LISTSERV-TCP/IP, developed at a significant manpower cost to L-Soft,
should be a free upgrade to LISTSERV-NJE.
Similarly, Anastasios Kotsikonas granted a number of free ListProc
licenses over the past few years. In March, CREN purchased the rights to
ListProc, and has since then been funding its continued development.
CREN's public message, "Pricing of CREN's ListProcessor software", makes
it clear that CREN intends to require new licenses for the use of this
new version. That is, CREN decided to make ListProc version 7.0 a new
product, and the users of version 6.0 will be required to obtain a new
license. If this is appropriate behaviour for a non-profit networking
organization, surely it must also be legitimate for a software vendor.
>4. Remember that dropping CREN membership will result in your removal
>from the BITNET routing tables.
This statement is an excellent illustration of the risks CREN alluded to
in its introduction. This threat is only effective because CREN holds,
for the time being, a de facto monopoly on NJE connectivity in the US. If
your business depends on NJE, you have no choice but to pay the price
CREN sets, or be disconnected.
Thankfully, L-Soft has developed, over the last few months, new products
and services to provide a smooth, non-disruptive migration path from NJE
to TCP/IP (and then from VM to either VMS or unix). Many former CREN
members found it more advantageous to purchase a LISTSERV-TCP/IP license
from L-Soft, at a one-time cost on the same order as their yearly CREN
membership dues, than to continue their CREN membership. Undoubtedly,
CREN's public statement will only serve to convince more CREN members of
the merits of this course of action.
There are, however, many L-Soft customers who still rely on NJE for their
business, and for whom LISTSERV-TCP/IP is simply not an option. More
importantly, a very large proportion of L-Soft's customers indicated
that, while they could abandon NJE if it became really necessary, they
would rather keep the service if at all possible. Many explained that,
unfortunately, their management was no longer willing to pay CREN
membership dues of up to $8000 yearly just for NJE. Because it is these
customers' desire to continue with NJE and because NJE facilitates the
use of certain LISTSERV functions, and in particular the file server
functions, L-Soft would be very interested in providing affordable NJE
access to these customers. L-Soft's estimate is that the actual per-node
cost of managing the worldwide NJE network is on the order of $50-70/year
(fifty to seventy dollars), including overhead. At these rates, L-Soft
would be able to bundle free NJE access with each maintenance contract
for LISTSERV-NJE. This in turn would make it a lot easier for many L-Soft
customers to get management approval for the continued use of NJE, as
they would no longer need to justify NJE access as a separate item. And,
of course, L-Soft would agree in writing and in perpetuity to allow other
companies to compete for the provision of NJE access. L-Soft does not see
NJE as a revenue-generating venture, but as a useful side addition to
L-Soft's offerings - one that would allow us to offer one-stop shopping
to our "traditional" mainframe/NJE customers.
This, unfortunately, is not possible today, because of CREN's monopoly. A
monopoly that, judging from the statement quoted above, CREN is unlikely
to open up before the July 1st deadline.
>5. In the next few weeks there may be some CREN announcements that will
>help you get an even better deal. Watch BITNEWS.
In the next few days, L-Soft will (not "may") publish announcements that
will provide an affordable alternative to current ListProc users who, not
being CREN members, do not benefit from our "75% membership" package.
This, along with CREN's price list for ListProc, which offers licenses to
non-CREN members at a rate that is usually much lower than the
corresponding yearly CREN membership dues, will indeed help the academic
market get an "even better deal".
Eric Thomas
Manager of Design & Development
L-Soft international, Inc.
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