Jim Marshall wrote:
>
> FYI to the list. Just received a quote on upgrading our user license from
> 384 users to unlimited on our 979 box.  H.P. increased the list on the
> upgrade June 1st from $8,800 to $56,434.  That's called taking care of your
> customer.

In a recent discussion on comp.sys.hp.mpe Jim Marshall noted that HP had
raised
the price for upgrading from a 384 User License level to a 512 User
License
level for MPE/Image on a 979KS Server from $8,800 to $56,434.

Since I (Dave Snow) was involved in setting the prices for the User
License
levels, I felt I should comment on Jim's question.

First let me note that this change took place on August 1, 1998 not June
1, 1999.
On August 1, 1998 HP did a significant repricing of its hardware
platforms and
its operating system/database/user license (OS/DB/UL) products.  Several
things
drove this repricing.

1)  A desire to bring the hardware prices closer if not on top of the
corresponding HP 9000 prices.

2)  Simplification of add-on HP software pricing tiers from seven to
three
(with a corresponding reduction in many servers' specified tiers).

3)  The introduction of OS/DB/UL rebates for customers buying new HP
3000 Servers
that involved trading in an old HP 3000 Server.

4)  Since we were introducing a 9x9KS platform (the 989KS/x00) that
performed
very close to the top end 997/800 platform, we felt we ought to align
the prices
of the OS/DB/UL products for the 997 and 9x9KS Servers.  So we made the
prices equal.
This resulted in the lowering of all 997 OS/DB/UL price points. It also
resulted
in the raising of prices for the 9x9KS 384 and Unlimited User license
levels which
we felt were significantly undervalued given the performance levels of
the 979KS,
the 989KS/x00 and the at the time unannounced 989KS/x50.

As a result of these changes and to be consistent across the product
line, we
adjusted all OS/DB/UL upgrade prices to be consistent.

These changes resulted in Jim's noted increase for the 9x9KS MPE/Image
384 to
Unlimited User upgrade from $8,820 to $56,434.

Yes, this is an increase in price.  However, we believe we were
underpricing
the product before.

We believe that there is still real value in this pricing.  If the
customer is
moving up to around 512 users from 384 users (adding 128 users), this
would be
only a price of $441 per seat.  If the customer is moving up to 1024
users from
384 users (adding 640 users), then this is a real steal at $88 per seat
for each
added MPE/iX and Image user.  These prices should be compared to other
data base
per seat prices (e.g., Oracle) which can easily approach $1000 per seat
for only
the data base product.

So yes we increased prices (we were underpriced before).  Our prices are
still
under other data base per seat prices for similarly performing servers.
And
the price change did not occur in June of this year but was part of the
August 1,
1998 changes.

Dave Snow
CSY HP 3000 Platform Product Marketing Manager