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Late renewal fee

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AnthonyK

AnthonyK

Mechanical
Oct 11, 2007
12
Hi,

Today our VAR intoduced, as he told us, new SolidWorks Late renewal fee policy: the longer You are not on subscription, the bigger late renewal fee (a penalty?) You will have to pay when You want to be on subscription again.
1)Is it everywhere or just here in Latvia?
2)Is it correct to demand money from customer just because he had not used Your services for some period of time?

I hope it is allowed to ask such questions here...

Best regards,

Antons Kuzmins
CAD administrator
Sidrabe Inc.
Latvia

 
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I believe SolidWorks is implementing changes something of that sort. However, your VAR might be using it as a scare tactic. It's not so serious as that. The costs are not going to gouch you.

Matt Lorono
CAD Engineer/ECN Analyst
Silicon Valley, CA
Lorono's SolidWorks Resources
Co-moderator of Solidworks Yahoo! Group
and Mechnical.Engineering Yahoo! Group
 
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I'm not certain about that being the same here in the USA, but I remember my previous VAR mentioning something like this several years ago.

Perhaps the thing to weigh is whether you need the subscription service--software upgrades and support--to the degree that you must pay for them in maintenance contracts. Weigh that with the actual costs of allowing maintenance to lapse for a while.

For example, here the lapse fee used to be ~$500. So you could drop your maintenance after each contract for, say, six months. Since maintenance costs tend to be near ~$1,500/year, that saves you ~$250 each contract renewal, and you're typically not falling too far behind with such a method. Maybe this strategy is what SolidWorks is attempting to avoid by increasing their "reinstatement fee".

As to whether charging a customer for reinstating lapsed maintenance--no, I think that's a cheesy way to run a business.



Jeff Mowry
What did you dream? It's all right--we told you what to dream.
--Pink Floyd, Welcome to the Machine
 
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Paul Salvador mentioned this a couple months back on the comp CAD forum. According to his info the new penatly fee for not renewing subscription is pretty harsh. It's actually cheaper to purchase a brand new license then let your subscription lapse for 3 years and renew it, or something like that. Seems unreasonable to me.

Rob Rodriguez CSWP
Eastern Region SWUGN Representative SW 2007 SP 2.0
 
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FYI,

I am still using 2005 and this copy has never been on maintainance. About a year ago I asked the local VAR for a quote to get on maintainance. At that time, I was told there was no reinstatement fee because I never was on maintainance, only the regular maintainance fee. About three weeks ago I got another quote which now included a $500 "late initial subscription fee" in addition to the regular maintainance fee. For me it appears to be cheaper to get on maintainance than to buy a new license.

Timelord
 
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That's what the VARs told me before as well. Perhaps they've changed their policy without letting you know? If you ask very nicely maybe they'll drop the fee (I've seen that happen with clients). Or maybe they're PTC in SW clothing...



Jeff Mowry
What did you dream? It's all right--we told you what to dream.
--Pink Floyd, Welcome to the Machine
 
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Rob,

I'm too lazy to go find it, but I think Paul's posting showed it was cheaper to let it lapse for three years than to pay the yearly subscription. I could be wrong, of course.

Matt Lorono
CAD Engineer/ECN Analyst
Silicon Valley, CA
Lorono's SolidWorks Resources
Co-moderator of Solidworks Yahoo! Group
and Mechnical.Engineering Yahoo! Group
 
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Just curious...what's stopping you from buying a "personal" license or a license for a phantom company in order to avoid a "late initial renewal fee"? Might be a little devious, but then I like to stick it to The Man when I can.

Dan

 
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Thank You all for interesting answers.

Yes, previously, it was something about 500EUR (at least here in Latvia) for Late renewal fee without taking into account, how long You have not been on subscription. Now our VAR is telling: for EACH year You are not on subscription, Late Renewal fee is getting bigger and bigger...
In my opinion, it is like You go to dentist with toothache, and he tells You: you have not been here for 2 years, first pay for not going to me regularly, and only then I will take a look at Your teeth...
Like a fine for NOT using their service. Not pretty at all.

Antons

 
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Dan,

Latvia is a small country, and it is hard to make a deal with some phantom company without VAR knowing what is going on. And as far as I know, it is not allowed to resell SW if you are not an official VAR.

Antons
 
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Jeff,

When Late renewal fee was only 500EUR, it was a normal practice also here in Latvia to make a discount for it, but it seems that this is no longer the case.

Antons
 
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This is just a trend in how SW is starting to treat the user base. I hate the new licensing process and it is a real pain in the azz transferring and problems that happen when you do it. On top of that, what happens in a couple years and they quit supporting license transfers if you are not on maintenance and then you need to transfer to a new computer. I have always thought their should be two types of maintenance for SW , one for if you want the updates and a second for support from the VAR. I hardly ever needed VAR support so I hated paying for it.
 
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Hi again everyone,

Some more info from our VAR: from now on it will be impossible to upgrade to new version without taking subscription service (is it everywhere or only in Latvia?). So the longer You are not on subscription, the less motivation (regarding money: penalty is getting bigger and bigger) to upgrade to new version, eventually less motivation to work with SolidWorks at all.
IMO, in the end they will lose a lot of clients that way.

Best regards,

Antons
 
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Here is a copy of Paul's post from comp.cad that outlines the new fees.

At $2500 for reinstatement after a 3 year lapse plus the $1200 maintenance fee you're only a couple hundred short of just buying a new seat license.

Paul,
After July 16th SolidWorks will increase the fee to renew an expired SolidWorks/Cosmos to $850.00 per year. This fee will increase an additional $850.00 per year thereafter.

Example:
Seat expired 90 days to 1 year - $850.00 plus Annual Maintenance

Seats expired 366 days to 2 years – 1700.00 plus Annual Maintenance

Seats expired 2 years to 3 years - $2500.00 plus Annual Maintenance

GoEngineer did not want any of our customers to miss the opportunity to reinstate any expired SolidWorks/Cosmos asset at the existing rate. Reinstating your expired SolidWorks/Cosmos assets between now and July 16th 2008 can be done at the existing rate of $500.00 per seat plus Annual Maintenance.

Please contact your Customer Service Representative.

Customer Service Representative
GoEngineer




Rob Rodriguez CSWP
Eastern Region SWUGN Representative SW 2007 SP 2.0
 
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It seems that Solidworks is becoming more like Autodesk every day and that is not a good thing.
 
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"The question is, why should anyone pay for services they didn't get. Does SW magically go back in time to offer support to the client retroactively? :) "


I agree with this theory, but if you carry it through then why should anyone get upgrades they didn't pay for? So if you skip two years of maintenance and want to get back on should you get the latest version without an extra fee? I think not b/c you never paid for the previous two.

Cole M
CSWP, CSWST, CSWI, CPDM
HP XW4300, 3.4g proc, 2.5g RAM, ATI Fire GL 3100
Dell M90, Core 2 Duo, 2g RAM, Nvidia Quadra FX2500M
Equus (custom), P4, 3.4g proc, 3g RAM, Nvidia Quadro FX3400
 
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