To Upgrade or Not to Upgrade? Can 82% off really be a bad deal?

General
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A year ago I wanted to upgrade my licenses. I even wrote an article about my experience.

I think this unpublished article (rejected by xDev as being too “mathematical” …) contains some things which should be generally knows to people interested in upgrading their licenses.

So I’m posting it in a new thread instead of burying it in another one.

To Upgrade or Not to Upgrade?
Can 82% off really be a bad deal?

If you are thinking about upgrading your Xojo license then it might not be as straight-forward as you think if you have a current license. I ran into this when I tried to take advantage of a “Programmer’s Day” Special.

In 2012 Xojo had a very special offer: get 24 months of updates for the price of 12 months. I’m not a professional developer, I’m a Molecular Biologist, but I could see the writing on the wall in my profession: you don’t see anyone older than 40 working in the Lab anymore as was still the case just ten years ago. At 50 I was therefore way past my “use by” date, so a career change seemed advisable. And, as if to hammer home that point, I had become unemployed just a few months before, with prospects of a new job non-existent.

So going for the update wasn’t an easy decision to make as money was tight. But Xojo had also just announced that their licenses were being restructured and prices were going to change (see http://www.realsoftwareblog.com/2013/04/coming-soon-new-pricing-recap.html):

[quote]Speaking of licenses, anyone who has or had a modern Real Studio license (2005 - present) will have their license automatically converted as follows:

Personal => Desktop
Professional => Desktop + Console + DB
Web => Web + DB
Enterprise => Desktop + Web + Console + DB[/quote]

I had an expired Enterprise license (took advantage of a very good offer to upgrade my Pro version a few years before) that was being split into Desktop, Web, Console, and Database. I had no need for Web, Database or Console, so in September 2012 I decided to renew just my Desktop license.

I wanted to extend for four years, but was that wise? Would the company still be around in 2017? After all, 2012 was not exactly a good year for Xojo. I had the feeling that the company was having some difficulties, so on the one hand I wanted to support them, on the other hand I’m not in a position to give money away. Furthermore the challenges were daunting: could Xojo Inc keep up with all the changes on the horizon: iOS, 64bit, LLVM in addition to the rapidly changing MacOS and the imminent arrival of Windows 8? Would I even still be alive in four years time? On the other hand: that’s basically 50% off, I’m a sucker for bargains, and it would be an investment into a (hopefully) bright developer future.

So after much to-ing and fro-ing I took the plunge and extended my Desktop license, and not just once for 24 months, but twice till September 2017. Risky, and a leap of faith on my part, but I thought it might just turn out to be a shrewd business decision.

And it was. In December 2012 Xojo had another great offer for me: update your Desktop license to Pro before the price increase. Which I did, so Database and Console were back with me. Note that Web was specifically excluded from the offer, so it wasn’t a “normal” Pro version.

Fast forward to now.

Big changes have happened. Xojo restructured their licenses (twice) and increased their prices, in some cases by a considerable amount: Console went from being included to €50 to €240. Pro went from €250 to being split up and not being available as an option to €800 (though to be fair it now also includes the Web edition).

I still don’t have a need for Web (and the forthcoming iOS will not be included for free with Pro, so that was not a consideration), but I’m still a sucker for bargains. So when Xojo announced their “Programmer’s Day Special” I was tempted by the upgrade offer at the bottom of the flyer:

[quote]Upgrades
Already have a Xojo license but need more functionality? Email us and ask for your specialized Xojo Pro upgrade price, we’ll give you 30% off an upgrade to Xojo Pro through Programmer’s Day!
[/quote]
I also had a 10% off voucher that I would be able to combine with the offer. So how much would it be to upgrade my Desktop/Database/Console licenses to include Web and make it equivalent to Professional? I have the expired Web edition, so I would need three renewals till September 2017 = €160*3 = €480 - (30% Special + 10% voucher) = €288. Veeery tempting. No real need, but … hmm, let’s ask for a quote before the sale expires, then at least I have more time to think about it.

So I did. And received the following two options:

Now quote 1 makes no sense. This quote is for a 12 months Pro license, so I gain the Web edition in addition to the Desktop/DB/Console I already have. An upgrade to my expired Web license would only set me back €160. Why would I pay €200 more for it???

Now quote 2 looks like an unbelievable offer at 82% off - and unfortunately it is. Don’t be taken in by the massive “discount” that seems very tempting at first sight - it is only tempting until you realize that beside paying €217 you also trade in 2 of your 3 years worth of Desktop/Database/Console … and all just for 1 years worth of Web!

I would get a €160 value (for a Web renewal) by paying €217 and relinquishing 2 years from my active licenses (worth €720) which are valid for three more years!

To be fair Pro also includes Priority support, Beta access, 3x feedback multiplier, and Consulting leads, but none of them are of any value to me. And maybe that’s the basic problem: Pro is a bundle that includes many items that are of no use to non-professional developers. Maybe there should be a bundle for them too at $599?

So what are my active licenses actually worth? Never mind what I actually paid for them: if I had to renew them from now that would be

[quote]Xojo Desktop renewal till 2017: 3x €120 = €360
Xojo Database renewal till 2017: 3x €120 = €360
Xojo Console renewal till 2017: 3x €120 = €360
total: €1080[/quote]
Or so I thought.

Xojo thinks differently. According to Geoff Perlman, CEO of Xojo Inc:

I think I see where the problem is. You are using current pricing to calculate the value of your keys. That’s not how we calculate them. We calculate the value of keys based upon what the customer paid for them and how much time remains before they expire.

This is a bombshell.

It basically introduces different types of licenses depending on how much you bought it for. Or to paraphrase Orwell: “Some licenses are more equal than other licenses.”

Let me illustrate the problem with an example: assume you bought Apple shares at $50. They increase to $700. Someone wants to buy your shares. You say “Sure, you can have them for $700”. They say “But you bought them for $50! So they are only worth $50. I offer you $60 and that is a GOOD offer!”

I don’t know about you, but I don’t think so - but if you do then let me know and I buy your Apple shares!

When Xojo increased the license price the value of my licenses increased accordingly. That is how the REAL World works. If Xojo works to a different set of rules then they need to let their customers know.

For example what about those who bought their Desktop license with the MacHeist bundle (10 apps including Xojo) for $19.99? Is their license worth only $1.99 when they try to upgrade to Pro? Can they actually upgrade or do they need to buy a new license? What about anyone buying at a “special offer” price?

So don’t be too tempted by big discounts - run the numbers. For me Xojo’s unique upgrade policy means it would be economic suicide to upgrade at any point within the next three years. That’s a shame. I have the money ready, Xojo could make a sale, but as it is I will have to wait. Only after my licenses will have expired shall I be on equal footing to other license holders again, and upgrades make economic sense again.

So can a discount of 82% really be a bad deal? Going with Xojo’s “82% discount offer” would leave me €720 + €217 - €160 = €777 worse off. So surprisingly the answer is: yes.

Well, for me at least. It would of course be brilliant business for Xojo :wink:

_______________ [End of article]

To avoid any misunderstanding:

I’m not saying that a license with 2 months left on it has the same resale value as a license with 12 months.

I’m saying that I have an active and current license that I would have liked to upgrade, but that Xojo treats the license differently because it was sold at a discount. In effect they want the discount back in order to allow me to upgrade.

So in essence I have “second class” licenses.

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@Markus Winter your entire view is wrong. Sorry mate, but you are confusing futures with assets. When you buy a Xojo license you own it for life (this is an asset)- you can use it as long as the OS you’re building for will accept that binary (short term I know for MAC). Renewals are effectively buying futures - features that will be supplied.

I have a RB2007 version that still works for me (single exe too), so everything I’ve paid for since then is features, this is the choice I make but I’m not forced to upgrade I choose to for two reasons - 1 I need this product to continue, and 2 the features are actually very cost competitive.

As a Windows user I have seen many times comments about support for old technologies opening issues for security, so as an OSX user you’re having a problem paying for this extra security?

So in essence you don’t have “second class” licenses you have licenses that will continue to be usable so long as your hardware/OS will support them, they will become redundant not by Xojo, but by the third party you purchase from.

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Again Wayne, you are misunderstanding. We are talking about upgrades, not renewals. As far as upgrading my licenses goes, I indeed have “second class” licenses. Wether the same is true for renewals has not been established .

What that all should have to do with a license being usable in perpetuity or any third party is hard to fathom…

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and compatibility with the current hardware / software (if some incompatibilities appears since the release of the last Xojo version usable with your license)

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[quote=229140:@Markus Winter]Xojo thinks differently. According to Geoff Perlman, CEO of Xojo Inc:
I think I see where the problem is. You are using current pricing to calculate the value of your keys. That’s not how we calculate them. We calculate the value of keys based upon what the customer paid for them and how much time remains before they expire.

This is a bombshell.[/quote]
First: the contract – which you entered by buying this license at that time – is still valid. What does it say in terms of upgrading?

Secondly: I don’t like Xojo’s price policy and I almost dumped Xojo entirely because of all these changes in the last few years, but this case I understand.

You’re comparisons are all wrongas they are not the same (you can’t compare shares with licenses, there is no license term on shares, etc.). If you want to compare your case, compare it with a mobile phone contract. And you will see, that it is the exact same thing when renewing, upgrading, and also when comparing the advantages new customers get.

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Marcus,
Thanks for an interesting article :slight_smile: I can understand why it was rejected. However, a license is a license. I cannot see why Your license should be viewed as a second class license. Especially as we cannot see the future at the time of buying it.

What it really shows is Xojo’s price model lack of trustworthy which is my personal opinion about the applied policy.

Wayne,
You only own the right to use the license. It’s an intellectual right and nothing else. Is it an asset? Since it’s difficult to value it, both its economical value as well as its technology value is limited for a short period we cannot justify it as being an asset.

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@Eli: The comparison with a mobile phone contract is even worse then mine. Mine was intended to show that an increase in price of something doesn’t mean you can simply treat it as still having the old value and calculate with that. If the value increases, then that applies to all items.

Maybe I can’t compare it with shares, but it doesn’t change the fact that Xojo treats licenses differently depending on wether they were bought full price or at a discount. This makes it a two class license system.

As far as I’m aware there was NOTHING said about this in the license agreement. There was nothing ever said in any promotion or bundle offer.

If you sell a lite version and a Pro version, you have a promotion to sell the lite version cheaper, then what do you do about upgrades to Pro? Charge the ones who bought the lite version at a discount more? If so, should it not be said clearly and in advance that buying at a discount does not entitle you to take part in upgrade offers unless you pay extra?

I’m not sure wether I’m more flabbergasted about Xojo or the attempts by people to justify this.

P.S. And I have bought bundled software which clearly stated that certain apps were not eligible for upgrades.

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[quote=229165:@Dennis Wallentin]Marcus,
Thanks for an interesting article :slight_smile: .[/quote]
Thanks.

Maybe you can explain it to me in a PM :wink:

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For a long time, an upgrade from the previous version was sold at a cheaper price than an upgrade from two or more previous versions (I mean MAJOR versions).

Either Real Software does that (long time ago) and the whole industry.

Then appears the NoUpdate/NoUpgrade software… Toast was in this bandwaggon, but I do not know their status nowadays…

And today, Xojo was the last paying software I gave money for… (I think I have 5 or more licenses for Toast…)

And I do not tell you the price I paid AppleWorks (for Apple II) nearly 30 years ago…

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@Emile: renewal prices is a different topic.

And I have half a dozen licenses for Toast myself …

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Du bist sauer, weil Du Pech hattest und damals falsch entschieden hast. Das ist aber nicht Xojos Fehler. Deine Lizenz ist gültig und
Du hast einen gültigen Vertrag und kannst das damals gekaufte Produkt so benutzen wie in dem Vertrag angegeben. Die Bedingungen dieses Vertrags gelten. Punkt. Schluss. Eine Firma muss nicht kulant sein, obschon es natürlich schön ist, wenn sie es ist. Ehrlich gesagt, verstehe ich nicht mal ansatzweise Dein Problem. Such Dir ein anderes Produkt einer anderen Firma, wenn Du mit dieser Situation nicht leben kannst.

Und bitte beleidige mich nicht noch Mal – Du hast in einem öffentlichen Forum gepostet und wolltest Reaktionen. Du hast meine Antwort zu akzeptieren. D.h. Du kannst gerne schreiben, dass Du nicht einverstanden bist, mich nicht verstehst, usw. Aber zu schreiben, dass Du entgeistert seist, dass ich Xojos Vorgehen rechtfertigen würde ist schon ein starkes Stück.

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@Eli: dann zeig mir im Vertrag wo steht da man die Lizenz nicht wie andere gltige Lizenzen zum Upgraden hernehmen kann ohne mehr zu bezahlen. Steht da nicht. Und damit behandelt Xojo manche Lizenzen anders ohne darauf hinzuweisen.

Wenn du das ok findest dann sag es auch. Ich finde es moralisch nicht in Ordnung.

Es geht auch nicht um Kulanz, es geht um ganz generelle Angebote der Firma. Bei denen sie dann sagt “du hast zwar eine Desktop Lizenz aber du darfst das Angebot trotzdem nicht nutzen”.

Deine Antwort akzeptiere ich, finde sie nur (a) an der Situation vorbei, und (b) unverstndlich da es ein in meinen Augen unmoralisches Verhalten seitens Xojo zu verteidigen sucht. Aber wie gesagt, ich geh davon aus da du von falschen Voraussetzungen ausgehst.

Und wenn es dich strt da ich das in einem ffentlichen Forum sage dann schreib eine PM und wir knnen dies gerne in privat austragen, oder ruf mich an. Ich geb dir gerne meine Telephonnummer.

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Juristisch ist es umgekehrt. Wenn nichts drinsteht, hast Du kein Anrecht drauf. Darum meine Bemerkung mit der Kulanz.

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One thing everyone should ask themselves is the following:

What would you say if I had put this article as a comment on MacUpdate.com, Download.com, CNET etc?

Your emotional reaction should tell you something interesting.

If you think “that’s fine, no problem, Xojo obviously behaved correctly and Markus is in the wrong” then you should have no problem.

However if you feel that it would put Xojo in a bad light (or even harm them) then I would suggest that Xojo didn’t really act as they should.

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Nein. Juristisch ist eine Lizenz eine Lizenz außer es steht was anderes drin wie “non-upgradeable, non-refundable, non-upgradeable” etc.

Das gilt übrigens auch für Upgrade-Angebote die allgemein gehalten sind und nicht bestimmte Lizenzen ausschließen, wie zB “does not apply to licences bought as part of a bundle”.

Daher hat Xojo rein juristisch sogar zweimal gegen die Gesetze verstoßen, einmal indem sie die Rechte aus meinem Kaufvertrag einschränken, zum zweiten indem sie meinen Zugang zum Upgrade einschränken.

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Tut mir Leid, komplett falsch. Frag einen Anwalt. Es ist so sonnenklar. Du verrennst Dich da in was.

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Google translate is your friend ; )

Ignoring this thread now …

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Glaub ich nicht. Xojo lag eindeutig falsch damit mich vom allgemeinen Upgrade-Angebot auszuschließen. Das wäre nur möglich wenn es entweder bereits in meiner Lizenz vereinbart war, oder wenn das allgemeine Upgrade-Angebot Lizenzen wie meine ausdrücklich ausschliest. Beides trifft nicht zu.

Wenn man Lizenzen unterschiedlich behandeln will dann muß man das auch sagen. Und zwar vorher.

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P.S.

Ja.

Nein.

Ich hab einen guten Deal bis Sep 2017. Ob die Entscheidung richtig war muß sich erst noch zeigen.

Doch. Weil Xojo im Nachhinein bestimmte daß ich das Upgrade-Angebot nicht nutzen kann. Darüber bin ich sauer.

Ich hab zwar keinen Anwalt an der Hand, aber ein ehemaliger Mittschüler ist Richter in Würzburg. Ich schau mal ob ich ihn heut abend erreiche. Falls du einen Anwalt zur Hand hast wäre es interessant was der sagt.

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@Markus Winter

Not true. Pro does include iOS and Raspberry Pi.