Last week, LexisNexis announced a change to their Annual Maintenance Policy (AMP) for Time Matters and PCLaw. The full text of the policy and announcement can be found here. In short, Lexis will charge a customer an AMP reinstatement fee if their AMP lapses and, in the future, they want to take advantage of an AMP benefit (product upgrade or technical support). Basically, this means that customers can no longer let an AMP lapse then purchase a new one just before an upgrade. My understanding is that they would have to make up the approximate cost of the payments missed.
I have had quite a bit of feedback on this policy change. My friends in the CIC community tell me they have as well. Most of the responses accuse Lexis of trying to get more money out of their customers, holding people hostage, or something similar. Without going too extensively into the fact that many other software companies have a very similar policy, I want to discuss the cost aspect of this change.
Many of you will remember how Time Matters upgrades used to work. From versions five through nine, a new version of Time Matters was released every year, usually in September. Upgrade pricing was typically something along the lines of a 55% discount if you were upgrading one version, 35% if two versions and 15% if three or more versions. So, for example, when version 8 was release, a firm that originally spent $3000 for Time Matters could expect to spend approximately $1350 if they were upgrading from version 7, $1950 if they were upgrading from version 6 and $2550 if they were upgrading from version 5. I will grant you that the software pricing in general was a bit lower back then but $3000 would equate to about 7 Enterprise users under the old model.
At first glance, the current AMP pricing looks a bit different. However, if you used to upgrade at least every third version under the old model, you come out the same or better under the AMP pricing. Your initial purchase of $3000 equates to approximately five users but the price includes the first year AMP. The AMP portion of the price is around 30% of the total, lower than the 45% you would have paid for a new version within the first year under the old system. Renewing the AMP the following year will cost another $915. Once again, this is approximately 30% of the original purchase price. However, you are now eligible for any upgrades in the two year period for a total of 60% of the original price. This is still slightly ahead of the old model which would have offered you the ability to upgrade for 65% of the original price. After three years, you fall behind 90% to 85% when you pay another 30% of the original price. After that, you are paying significantly more in the fourth and subsequent years.
Now be honest. How many of you waited more than two versions to upgrade? Very few of my clients did. Approximately 50% upgraded every year and another 40% waited two versions. In other words, the new AMP actually saves most of my clients a little money on upgrades. The support component used to be free and essentially still is when you consider that you would have spent the money on upgrades anyway.
I know that many of you feel that Lexis is forcing you to pay for the AMP as opposed to the voluntary upgrade system of the past but they already require a valid AMP in order to obtain technical support. The big change announced yesterday is that you will have to pay a “reinstatement” fee if your AMP lapses. Assuming the fee is to simply make up the payments you missed, are you really paying more? Essentially, you can stay current on your AMP and pay as you go or pay the whole amount when you need the AMP for support or an upgrade. Either way, you are paying the same or less than you were to upgrade under the old system. So, once again, are you really paying more that you were before?Annual Maintenance Plan, LexisNexis, PCLaw, Time Matters