Business Objects recently announced a new version of its flagship business intelligence platform, describing it as “”a revolutionary step forward”” for the technology, but at least one of the company’s SMB customers wants the company to take a step backward in terms of its licensing practices.

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Howran, manager of applications services for Peterborough Technology Services (PTS) — a company owned by the city of Peterborough, Ont., that supplies the IT support needs of city and utilities staff — says changes to the licensing regimen of Crystal Enterprise made by Business Objects are pushing the reporting package out of the range of the small and medium business buyers who made it popular in the first place.

San Jose, Calif.-based Business Objects bought Crystal Decisions — and its Crystal Enterprise reporting platform — for US$1.2 billion in December 2003. Since then, said Howran, licensing and maintenance costs have spiraled, and a contentious plan to eliminate concurrent access licensing will make matters worse for SMB customers.

PTS bought Crystal Enterprise Standard Edition (SE) for about $29,000, plus $7,000 for maintenance, licences and extras. This was a lot more than Crystal Reports, but “”we felt that the $36,000 was a good investment,”” Howran said.

PTS purchased five concurrent access licences (CALs) at about $1,900 each for its 80 casual users.

In October, Business Objects told customers CALs were being eliminated in the new year. Customers had two options: Buy a named licence for every user at about $1,900 each, or license it on a per-processor basis at $65,000 each.

Either was an expensive proposition for Howran: 80 users amounted to more than $150,000, and the licence for the two-processor server would have been $130,000.

“”This is absurd,”” Howran says. “”Hello? Aren’t we talking about a report writing tool? It’s not one of my core pieces of software. I didn’t pay that much for my entire financials software package.””

There was a hedge, though — an October-to-January window in which PTS could buy more CALs, albeit at PE prices ($3,500, almost twice what Howran paid for the SE CALs). Armed with an assurance from a sympathetic Business Objects sales rep that the licences would remain valid for the next five years if PTS kept up the maintenance fees, and looking to expand the use of the reporting tool to other applications, Howran bought five more. She said the additional CALs will pay for themselves over the next four and a half years. But the original $36,000 investment will be written off over the next five years.

PTS is evaluating its options beyond those five years. Howran said PTS has been using Java for the last two years to do some reporting, a good option since much of the existing inventory of reports uses embedded SQL code that can be converted.

Java’s free, but it requires more expertise. And, said Howran, while it looks fine onscreen, Java reports don’t render the prettiest hard copies.

In an interview announcing Business Objects XI, company director of product marketing James Thomas wouldn’t directly address the issue of concurrent licensing, citing an announcement to come later this month aimed at the small and medium business market.

“”We’re going to release something new in the product line with a whole new set of licensing (plans) around Crystal Reports distribution. We’re not disclosing that (right now),”” Thomas said. “”I think it’s something those customers would really like.””

A new name

XI completes the integration of the Business Objects platform and Crystal Enterprise, plugging queried analysis, Web and OLAP intelligence and performance management products into Crystal.

Crystal Enterprise, the product, is now Business Objects XI, Thomas said.

And Business Objects XI — a free upgrade for Crystal Enterprise users on maintenance — is an enterprise-oriented product, not one aimed at SMBs, he said. The individual components can also be deployed separately for more flexibility, he said.

“”It’s really the way our licensing model has shaken out — giving people flexibility while still allowing them to standardize.””

Howran said she’s been trying to create a grassroots campaign to steer Business Objects away from that direction. That’s a strategy one analyst said is critical for customers with licensing woes.

Concurrent licensing “”is definitely a battleground for customers and vendors,”” said Amy Konary, director of software pricing and licensing with research firm IDC. Customers such as PTS feel they’re paying for what they use.

“”Vendors don’t like it because they feel like they’re leaving money on the table,”” Konary said.

But according to IDC surveys, while some vendors are dropping concurrent licensing, others are adding CAL provisions. The maturity of the package and other market-specific trends make it more or less attractive for vendors, she said.

“”Vendors don’t set out to make customers unhappy,”” said Konary, but they can’t satisfy everyone — they must aim to satisfy the majority of customers and risk peeving the rest. In the larger market, the new licensing scheme “”might be a net positive,”” she added.

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