As someone who is not a fan of tier pricing, but also as a company who does,
for some products we integrate, price on tiers, let me throw my two cents
into this.

I can see both sides of the coin.  There are software products for which
tier pricing (within reason) is justifiable, as the product provides more of
a benefit in the higher processors.

For one product we integrate, we price on only three tiers, following HP's
new tiers either very closely, or exactly.  In the original message, we
would not charge more for the additional processor - all 99x systems are in
the same class.  The product, in this case, Linkway, an ODBC driver,
provides higher value due to the faster processor speeds and the ability to
handle more of a load on the higher-class machines.  This product was priced
on more than 3 tiers, and on MPE User Limit tiers as well.  THIS IS NO
LONGER THE CASE - because the load an ODBC driver can handle is proportional
to processor and system speed, not MPE License Count.  The higher the speed
of the system, the more clients it can handle in a timely fashion.

For a product such as Adager, which we also handle, it performs the same
function, whether on a 918 or a 99x machine.  Adager dosen't price on tiers
- never has.  We follow that not only contracturally, but also because it
simply does not make sense to price Adager based on tiers.

There are vendors, however, who feel that having thirty tiers, and charging
outragous fees between tiers is justifiable.  I have to agree with the
original post - that would anger me to no end.  These vendors, and I don't
have to mention names, have to realise that to charge these outrageous
prices drives people away from the platform, or will drive them away from
their products to competing products.  We do not deal with these vendors
either, by the way.  We feel that if a product provides an increased value
based on a higher processor, we'll work with that vendor to allocate three
tiers at most, and price fairly.  If we can't get that, then we don't work
with that vendor.

This may sound like "having our cake and eating it too" - but it's not.
Another example of software we use (not sell) is NetMail.  It's tier priced
based on number of mailboxes.  I can justify this in my mind because the
higher the number of mailboxes, the more value it has to the user.  The two
mailbox version is free, the eight mailbox version is not, and the twenty
mailbox version costs more than the eight.  Again, more value is gained.  It
dosen't limit me to 2, 8 or 20 "addresses" - we can use any number of
aliases, but there is a limit on the number of physical mailboxes.

And tier pricing is not just limited to the HP3000 platform, but you'll find
this on all platforms.  Even Microsoft tier-prices: on functionality, on
number of users, etc.  Get Visual Studio in several flavours - Learning,
Professional and Enterprise (functionality).  Get Backoffice in 5, 10, 25
and higher user varieties (user based).  The difference between the tiers
can be thousands of dollars.

One can't say "No Tier Pricing!" because that's not reasonable.  Tiers are
proper in certain cases, they are not appropriate in others.  The acid test
(other than "is it a good product") is two-fold:  (1)  Do I realize
increased performance, and therefore, value with the tier pricing as shown,
and (2) Are the number of tiers excessive and/or the cost between tiers
excessive for the value gained?

I'll grant that there is some predatory pricing out there by some companies
that think that they can get away with it.  Most other companies that do
price on tiers are not doing so to gouge the customer, but to sell the
product and realize a decent profit.  Without profit, there's no product
(and the research and development that goes along with it), and without
product, there's no company.  That's simple economics.  We may do it for the
love of the platform, but that dosen't pay the bills, folks.

Have a good weekend all,
Joe (getting flame suit on)

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Joe Geiser, President and Managing Partner
CSI Business Solutions, LLC
Phone: +1(215) 945.8100   Fax: +1(215) 943.8408
Toll Free (US/Canada): (877) 945.8100
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