helm t1_ixpee6a wrote on November 25, 2022 at 6:36 AM

Reply to comment by cballowe in Mercedes-Benz to introduce acceleration subscription fee by kishiki18_91

I'm unfamiliar with this pricing model. But I'm quite sure a mainframe comes with yearly service fees, software licenses, etc, that makes it quite different from a one-off purchase in the first place.

I recently helped shut down an old Oracle database (physical + software) that cost our company $100k/year. Again, different pricing models, different expectation. If you buy a house, would you want to pay a subscription fee to have access to heated floors?

cballowe t1_ixpfean wrote on November 25, 2022 at 6:49 AM

That's true. But also, you have hardware in your data center that can be turned on and off with a phone call to IBM (and assorted monthly or one time pricing). The maintenance contracts etc are tied to what you're licensed to use. Software licenses tend to cost way more than hardware, but in all of it you only pay for the things that you use. (Or ... You pay for the things you want to use, but they can be dynamically enabled or disabled.)

Other industries are trying to go a similar way. I've heard that some heavy equipment companies want to sell some sort of uptime/operating guarantees and not necessarily specific equipment. That might mean you need 5 trucks but they ship 6 to your site and some spare parts etc because that gives them the flexibility to have spares and deal with downtime/repairs while still hitting the contract requirements. If you put that 6th truck in service, those numbers might be missed or if you want to have 6 operating then the contract goes up.

helm t1_ixpgf32 wrote on November 25, 2022 at 7:02 AM

Yes, but it's clear that your examples involve a negotiation in which the supplier is trying to more effectively match the buyer's needs.

This is all about building one car for everyone, but locking parts of it down with software. This reduces production costs. The value for the customer would be to upgrade/downgrade features at will. But so far, car makers haven't sold it very well, I think.

cballowe t1_ixphb2y wrote on November 25, 2022 at 7:14 AM

I think the "car makers haven't sold it very well" is more of the issue than building one physical model and enabling/disabling bits with software to meet customer needs.

I don't need a <5 second 0-60, so the option to not pay for it makes sense. There's definitely some people who would pay for it. With gas motors you get the difference between the base model and the performance model, with electric - it's software and not a bigger motor. Seems fine to me. you need to have that base model spec available.