Thursday, 14 July 2011

The increasing margins of Hardware and Software vendors

I read with great interest tonight that VMWare have introduced a new pricing model for their latest iteration of VSphere.  Instead of pricing per CPU or per machine the new version will price their product on the amount of RAM spread across the virtual environment.  Doubtless in this scenario the only winner will be the software vendor.  

As margins for the sale of hardware drop and products become more and more commodity, vendors are dreaming up ever more imaginative ways to eat into the average IT budget.  The last recent example of this I came across was Avaya's change of model for licensing their IP telephony.  Traditionally the number of IP handsets connected to a PBX was potentially unlimited, and you paid for the number of channels of VoIP you wished to convert into calls to be placed across the PSTN by licensing the voice compression channels.  This recently got changed so that the number of compression channels are only limited by the hardware capacity and you get the privilege of paying per handset for anything more than a very modest quantity.  A minor change in model which has added several hundred pounds to the cost of an SME sized installation.  

From a reseller perspective it is also becoming increasingly difficult to obtain products on a Not for Resale or demonstration basis without massive limitations to the product which, IMHO is not doing anything to aid "The Channel" which the majority purport to require desperately as their primary route to market.  

Left unchecked, I suspect ultimately one day the entire IT market place will be controlled by a handful of conglomerate organisations that govern every aspect of our technical lives.

Corporate generated IT socialism . . . .not on my watch!

No comments:

Post a Comment