MaxAva Gets Inventive With Subscription Model for HA
February 2, 2009 Alex Woodie
Maximum Availability will today roll out a new program that lets customers subscribe to *noMAX, its i OS high availability software, instead of buying it outright. By allowing customers to pay for their software on a monthly basis instead of shelling out $20,000 or more in upfront software license fees, MaxAva is helping customers fly under the radar of the budget director, while perhaps boosting its business in a tough economy. MaxAva also made a couple of new features available to *noMAX customers.
The IT industry has been moving toward a subscription model for some time. The rise of on-demand and cloud computing–where access to software applications and the underlying hardware is rolled into one tidy monthly fee–is perhaps the purest expression of the subscription movement. Many open source products are also sold via subscriptions. Even for commoditized products–middleware stacks, security software, and development tools–the subscription model makes a lot of sense.
The IBM midrange server market has largely bucked this subscription trend, which is no great surprise. The Power Systems (AS/400) industry simply does things differently and has different priorities than the frenetic IT industry as a whole, and probably always will. Moving from tiered-based pricing to pricing based on server, LPAR, or concurrent user licensing schemes has been challenge enough–no need to turn the model completely upside down.
But now, with the global economic recession causing companies of all sizes to slash their IT budgets and put on hold purchases of expensive IT items such as servers, ERP suites, and even HA packages, it could be the perfect time for System i vendors to get creative and explore more flexible licensing schemes.
That is exactly what Maximum Availability is doing with *noMAX. MaxAva has always targeted the entry-level System i market (P10- and P20-class boxes), where software license deals typically ranged in the low five figures. But even those relatively modest fees (by HA’s notoriously high standards) could pose a challenge in the brave new economic world.
“We just started thinking,” says Simon O’Sullivan, a senior vice president with the New Zealand company. “There are a lot of companies out there that still want to do something in the high availability, disaster recovery space, but they may not have access to the capital budgets during this recession.”
Under MaxAva’s new *noMAX Subscription Edition offering, customers can get started with *noMAX immediately and pay less than $2,000 per month (for smaller boxes). The hope is that an amount this small will not require same type of approval by a director or another executive that a large capital outlay would, and that it can be included in general, recurring operating costs.
MaxAva gives customers three subscription plans to choose from, including a three-month plan, a 12-month plan, and a three-year plan. The three-month plan costs the most. Customers who opt for the 12-month plan will get a 20 percent discount off the monthly price of the three-month plan, while customers signing three-year commitments get another 30 percent discount off the one-year price. MaxAva will continue to sell perpetual licenses for customers that prefer a traditional format.
All of the subscription plans include support and maintenance, which is normally 20 percent. The break-even point is three years–that is, customers who buy the three-year subscription plan will end up paying just about the same amount as customers who bought product outright and paid three year’s worth of maintenance, according to O’Sullivan.
Obviously, customers who are on the three-month or 12-month plans will have paid considerably more after three years than if they had bought a perpetual license in the first place. The trade off for this increased cost is greater flexibility and less risk.
“We’re going to make it totally flexible,” O’Sullivan says. “Maybe a customer wants to sign up for a year, and that’s all they want to do. Maybe they’re looking to move off the iSeries, and they’re not too sure about investing in our product. Maybe that they want to test it out and see how it goes. In any case, they can sign up for a year, and if they bow out at the end of the year, it really doesn’t cost them much at all.”
In cases where the customer felt the upfront fees for HA were too great, MaxAva hopes the new subscription model removes that hurdle. “Risks to critical data do not go away in a financial crisis,” MaxAva CEO Allan Campbell says. “In fact, they generally increase, so we also wanted to ensure that any cash flow barriers for new users wanting to start using HA/DR software were removed.”
MaxAva will today also unveil two enhancements to *noMAX, including Web-based training for partners and customers, and a new feature called HA Health-Checks.
HA Health-Checks automates the process of monitoring *noMAX replication processes and compiling that information into a graphical report. The feature analyzes the number and the sizes of files and libraries on the primary and secondary systems, and makes sure that all objects are synchronized. “It lets you know that everything’s in synch, so the customer can be nice and comfortable, knowing that everything on the primary box is on the target box, so they can do a roll swap if they have to,” O’Sullivan says.
The new Web-based training will enhance the company’s on-site training. Last year, the globe-trotting Kiwis held sessions in New Zealand, Australia, England, and the U.S. The advent of Web-based training will allow them to expand customer and partner support initiatives, without logging as many flight miles.
Despite the poor economy, MaxAva had a good 2008, and is actually hiring. “We’re looking for a technical person in the States, and we’re also looking for high-level sales people in the States as well,” O’Sullivan says. Considering the recent layoffs at many companies, MaxAva may be able to cherry pick from the best talent available on the market.