WebCT pricing and some open source developments…
Hmmm… interesting… from Stephen:
“I have reports coming in from more than one institution that WebCT is asking for significant price increases (in the 60 percent range) for its Campus Edition learning management system for upgrades to CE version 6. This is combined with price increases for the database licenses necessary with WebCT”
Reminds me of a discussion we had about WebCT Campus, Vista and the future a bit back. From which I quote Karen Gage (VP Marketing at WebCT I think):
“Our next major release ‘WebCT Campus Edition 6.0′ is targeted for availability in the first half of 2005; WebCT Campus Edition 6.0 will run on a relational database and will include a wide range of new features and enhancements to our existing teaching and learning tools. We do not expect license fees for this new release to increase significantly over current license fees.”
Maybe today is a good day for the release of Sakai 2.0.0 and a very favourable review of the use of an open source VLE, Bodingtin. (thanks to the Scott for being the OLE-maven :o)
I guess I don’t need to go into the whole ‘lock you in through non-interoperable and extremely-particular systems and then bump up the pricing’ thing again, do I?
Update: Just remembered that I received this comment overnight from Christopher Sessums:
“Our institution was offered a WebCT Campus Edition license several years ago for $500 a year. Folks got hooked, then WHAM! Out comes the new pricing structure and lo! our institution must now pay multiple thousands of dollars per annum to keep this product mainlined.
Drug dealer analogies aside…”
Now am not sure if this is same thing that Stephen is talking about… could be…
June 21st, 2005 at 8:19 pm
“I guess I don’t need to go into the whole ‘lock you in through non-interoperable and extremely-particular systems and then bump up the pricing’ thing again, do I? ”
Would that be the old “I told you so” thing by any chance?
June 21st, 2005 at 8:35 pm
Ahhhh, I could probably run a productive search or two through my archives…
June 22nd, 2005 at 5:12 pm
By the way, back in 1998, WebCT used to have a commitment not to increase their prices by more than 10% per year (that was when they were still a spin-off from UBC). Shame: it looks as though the Wayback Machine didn’t archive that particular page on their website!
NB - I know that the product is considerably better than it was in those 10% increase days!
June 23rd, 2005 at 9:47 pm
Some interesting reading for anyone who was surprised by this:
“The Economics of Software”
http://blogs.sun.com/roller/page/bmc/20040828
key section:
“And of course, your friendly software vendor knows that your demand tends towards inelasticity — which is why they so frequently raise the rent while offering so little in return. We’ve always known about this demand inelasticity, we’ve just called it something else: vendor lock-in.
If software suppliers have such unbelievable pricing power, why don’t companies end up forking over every last cent for software? Because the demand for software isn’t completely price inelastic. It’s only inelastic as long as the price is below the cost of switching software. In the spirit of the FYO billboard on the 101, I dub this switching point the “FYO point”: it is the point at which you get so pissed off at your vendor that you completely reevaluate your software decision — you put everything back on the table.
What happens at the FYO point? In extreme cases, you may decide to rewrite it yourself. Or maybe you’ll decide that it’s worth the pain to switch to a different (and less rapacious) vendor — or at least scaring your existing vendor to ease up a bit on their pricing. Or maybe you’ll ramp up a new project to replace the existing one, using all new components — thus normalizing your demand curve. And increasingly often, you decide that you’re not using half of the features of this thing anyway — and you start looking for a “good enough” open source option to get out of this ugly mess once and for all. (More on this later.)
Now, your software vendor doesn’t actually want you to hit the FYO point; they want to keep you far enough below it that you just sigh (or groan) and sign the check. (Which most of them are pretty good at, by the way — but of course, you already know that from all of your sighing and groaning.)”
Follow the link for more (and explanatory graphs).
It looks like WebCT have worked out that their customers have reached the point where the cost of switching systems is rapidly increasing, and they can raise prices at the same rate.
In my opinion this can only be a good thing. To extend the drug dealer analogy, and spread the blame around it bit further, it’s time for education to move beyond the “Woah, cheap drugs!” approach to IT procurement to something healthier and with a bit more long term vision.
June 23rd, 2005 at 10:15 pm
You may want to update your post in response to WebCT’s (rather pernickity) email to Stephen Downes on this matter:
http://www.downes.ca/cgi-bin/website/refer.cgi?item=1119469767&sender=SENDER
The point they are making is that you are not paying to upgrade to version 6, you are paying just to continue using any version of WebCT Campus Edition. The price increases therefore only kick in when your current licence term runs out and not when you upgrade.
The WebCT users I have spoke to have mentioned 30-40% price increases just to continue using version 4. Obviously if they actually choose to move to version 6 they will also incur the extra cost of:
* more servers (WebCT recommend at least two more than you already have in their migration FAQ)
* a licence for Oracle or Microsoft SQL Server
* an Oracle or SQL Server expert
* staff retraining (there appears to be large technical support and interface differences as this is basically a complete rewrite using parts of the Vista codebase, though WebCT do claim it will be ‘easy’)
And you’ll have to make the transition within a single year as apparently that’s all the time their licence will allow you to run both in parallel.
I was also told that many of the advanced features of this version are actually packaged as seperately purchasable ‘Add-ons’, rather than being rolled into the single purchase price. It’s always tricky to get exact list prices on these things but people did seem to feel they were expensive too.
June 30th, 2005 at 2:21 am
Every heard of moodle?