VoipNow Licensing Changes Explained
Starting with March 1, 2010 we changed the licensing methodology on VoipNow Platform. VoipNow Core is now more affordable for small customers with the new, dedicated server license for up to 250 concurrent calls. While this is a single server license, it expands to a 4Grid infrastructure able to sustain as many calls as you like. The pay as you grow, infrastructure wide licensing method is still available. In a service provider environment VoipNow Professional is available on pay as you grow licensing and also on dedicated server licensing for a small number of extensions. Perpetual (owned) licenses are available only for business customers.
Our current website should reflect all changes in licensing information. More information about the new licensing can be found here (Service Providers) and here (Direct Business Customers).
Why These Changes?
There are many reasons; I highlighted the most important ones below:
1. No SaaS licensing model
Sadly, although 4PSA developed the first product that accelerated SaaS deployments before most companies even learned the word (this was back in 2003), our old licensing model did not make sense on the SaaS market. Fortunately, the pricing was so low that the license purchase was actually more affordable than many other vendors’ monthly fees.
2. Poor correlation between pricing and costs
Speaking about price, the old price did not reflect the economics behind the product’s development, because VoipNow products are complex and expensive to produce. Even if we are a profitable company, it was obvious that we would not have been able to continue the aggressive investment in research and development no matter the pace of our growing rate. On the funny side, we lost deals in the past because some potential customers did not even consider VoipNow. They took the price as an indicator of the capabilities and quality of the product. No one believed we were so stupid to sell it so cheap 
.
4PSA has never changed pricing on VoipNow software until now, despite the inflation and product’s evolution. Before reaching the new licensing and pricing model, we studied the market intensively and discussed with our most important customers. The new licensing is still the most affordable on the market and does not substantially affect our customers’ margins.
I know that we have customers who are going to be very unhappy about this change, however I have to remember everyone that this change is in mutual benefit as it allows us to develop products faster and support customers better. This is vital for the growth of a service provider who is doing application hosting like UC. I felt many times that we could do more to help our customers to grow their business, as we have gained significant experience in the past years. Unfortunately, we could not afford to do this with all customers, due to the economics behind. The new licensing model will allow us to better focus on this.
3. Poor margin on distribution channels
The old licensing model was unfeasible for the new products we are going to introduce. Also with the old licensing, the reseller’s (the channel partner, not the service provider) margin was low. They were unable to properly scale their business and eventually to support our products on the quality standards we liked.
4. Unlimited is really unlimited
When we first introduced VoipNow Professional, it supported around 500 extensions on a server. Now VoipNow Professional is much faster, we have customers with more than 4,000 extensions on a server. With every new release, we improve performance. Back in 2006, VoipNow Professional was a single server product so we thought that unlimited is actually as much as a server can get, which was anyway limited. With the development of VoipNow and the multi-server infrastructures based on 4Grid, unlimited means really no limit. These are the main reasons why unlimited does not exist anymore.
How Is This Going to Affect You?
If you own a VoipNow Professional perpetual license under SUS, this change does not affect you, as long as you keep the license under SUS. Of course, if you need additional capacity, you will have to go with the current licensing.
If the license is not under SUS, you can still use it, but you will not be able to download the upgrades or to use our support services. You will also not be able to reinstate it anymore, so you will have to switch to the new leased licensing.
VoipNow Professional perpetual licenses under SUS are upgradable to any limit except unlimited (for example you can upgrade a license for 10 extensions to 300 extensions) until 30 March 2010.
If you own a perpetual license and you want to convert it to a leased license, we can give you a deposit equal to 50% of the license price when the license in under SUS and 20% when SUS expired. The deposit must be consumed in the first 6 months after conversion.
If you lease a license, the new licensing model is going to be effective starting with April 2010. For the month of March, there is no change in pricing. Sales will let you know about the changes personally.
More Support
I want to point to some interesting stuff with the new licensing that might not be so obvious:
- We have two licensing models. On the first one, you do not have any commitments and you get standard pricing and standard support levels, no matter how many customers you have. However, if you are willing to sign a commitment agreement with us (the commitment is quite low, but it shows that you are serious about your business) you will get better pricing and prices lower as business grows. You also get Expert Support level and even free programming services.
- When you get the commitment licensing option, you can opt for the All You Can Eat (AYKE) program for the first year. Under this program you can get all VoipNow Platform components for a flat fee. We introduced this option to better motivate our customers to proceed with quick implementation, marketing and sales actions.
- Also on the commitment licensing option, you can attend to at least four hours of free training per year (and up to 3 days), which is quite valuable for your business.
- With the commitment licensing option you get minimum 2 hours of consulting so you can build your service plans and position them properly on the market.
In the following weeks, I will focus on identifying the aspects where our customers need more help. During the last week at Parallels Summit 2010, after discussing with lots of service providers of all sizes, I have already spotted some areas where we can do better. This is still work in progress.
Finally, I want to thank you for your patience getting through this huge article. I am sure you understand that all changes described above were designed to allow our businesses to grow more in the future.
I also want to let you know that we created an email address called licensechange@4psa.com. You can send us your ideas, questions or concerns. Although it’s unlikely to make changes to the new licensing, we are ready to adjust parameters based on specific business constraints.
Join us a WebhostingDay 2010!
We are sponsoring WebhostingDay 2010, the leading European gathering for hosting companies, that will take place in Germany, near Cologne, between 17 and 19 March 2010. The event is not free, but we can send you an invitation code that covers all costs. Please contact sales@4psa.com for this.
You are invited to visit our booth #33 anytime and to attend to our CEO’s hosting.SESSION presentation about Unified Communications on Thursday March 18, between 16:00 and 16:45. We will attend WHD2010 with a team of six, but if you wish to schedule a meeting with 4PSA management, please email whd@4psa.com.
We will show at WHD2010 our latest developments, so we are looking forward to seeing you there.
My feedback on Parallels Summit
I’ve just returned from Parallels Summit 2010. I attended the summit with two colleagues, our Business Development manager and our Director of Business Operations in Americas. It was a very good event for us, with lots of discussions and findings. I will share some of the most important things below:
- VoIP gets more traction. With each year the number of hosting companies coming to us increases. They realize the importance of UC for their business.
Many hosting providers are still scared about VoIP because they don’t understand the market and the technical issues. Many of them are really interested to receive education.
- I met three different guys who built an in-house hosting platform for delivering VoIP for their hosting business. All of them want to switch to VoipNow, they realized that the business is no scalable this way – too many technical issues and always behind the market.
- Unified Communications was highlighted as the next major opportunity in all keys notes I attended to. We have known this for a couple of years, good to see that the market started to understand it. 
- I met people who still believe that cheap means good business. I am sure that some of them will have a different opinion next year, if still in business.
- We met customers/prospects that tried other products before going with VoipNow. They started to love VoipNow.
- We met people that had various problems setting up VoipNow Professional. We are working to identify these issues, in both usability and documentation.
- I learned that Microsoft could put some PBX features in their OCS in two years. I would like this to happen; more user education is needed on this market sector.
- Our Cloud Calling slogan was noticed by many executives I talked to. On a funny side of things, the summit started with a keynote from an IDC analyst who remarked that the public telephony was the first very successful cloud.
- I identified some points in our products that need investment in the following weeks. We will start this process on Monday, agility is very important here.
And not lastly, Parallels Summit is really an event to attend. Miami Beach was great, the location was very good (although quite expensive, especially the bar ) and the people exceptional.
Join us at Parallels Summit 2010!
We are going to be present at Parallels Summit 2010 that will take place in Miami, between 22 February and 24 February. The event is free and it’s going to be nice, you can register here.
You are invited to visit our booth #26 anytime and to attend to our CEO’s industry track keynote about the challenges hosting companies face when deploying Unified Communications. If you want to schedule a meeting with 4PSA management, please email psummit@4psa.com.
Looking forward to seeing you there.
VoipNow 2.0.4 and Automation
VoipNow 2.0.4 is available. It also includes VoipNow Automation, the latest public release before GA version. GA version will be out at Parallels Summit 2010, maybe the largest hosting gathering in US. I am saying maybe because I don’t know what HostingCon will do this year and in the past last two years it was a disappointment. Anyway, 4PSA is a Silver Sponsor at Parallels Summit, so you are kindly invited to attend and visit us there.
You can see above a picture of the nice VoipNow 2.0.4 cake my colleagues “developed” for the internal release party. It was pretty big
How to test VoipNow Automation?
VoipNow Automation installs automatically with VoipNow 2.0.4, in order to access it you only need a license key that enables Automation. Such a license key is available here (fixed key, thanks), pay attention that this is an evaluation license and you can not install it on a production server.
The front-end (store and portal for the customer) is available here, usually it must be deployed on your company’s website.
It is not possible to upgrade from the previous release of VoipNow 2.0.4 with VoipNow Automation Beta to the final VoipNow 2.0.4 that contains Automation RC. More details here.
VoipNow Automation Licensing
VoipNow Automation will be licensed per customer (do not confuse with extension, the customer is your end customer, a single entity that pays yours bills). There will be only leased licensing for VoipNow Automation. In fact starting with 1 March 2010 we will change licensing for all our VoipNow Platform products and we will withdraw the owned licensing option for service providers. More about this in a future post. The price for VoipNow Automation will start at 1EUR/customer per month and will lower with the number of customers. This will include a higher level of support for service providers and access to our consulting resources in order to help service providers grow the business faster.
VoipNow Automation Special Offer
Last week I made an offer to subscribe to a list in order to get an owned license of VoipNow Automation for up to 1000 customers. We received quite a strong interest on this, unfortunately I didn’t mention how someone should register on the list (other that commenting on the article). These being said, we declare the promotion open. The price of the license is 1000EUR and is subject to the optional 30% per year SUS (free updates and SUS support for another year). The offer is valid until 20 February 2010, to take advantage of the offer, please send an email to sales@4psa.com with reference code: OAUTO in email subject.
VoipNow Automation Release Candidate
We are showing VoipNow Automation Release Candidate at ITExpo 2010 East. In fact, we are going to release it in the next days with VoipNow Professional 2.0.4 GA. There are several important changes if we compare it with VoipNow Automation Beta, the most important being the support for Cloud Platform Bricks. This was something that we initially decided to bring in a future version of Automation, but eventually we reconsidered and decided to put it in the first public version, because there were too many changes for our customers.
What are Cloud Platform Bricks?
Cloud Platform Bricks is the API that allows the product to extend with support for different service delivery platforms like VoipNow Professional, VoipNow Core, Plesk, Open-Xchange etc. It comes with special primitives called bricks that allow the service provider to define service plans for a particular platform, provision services, charge customers for these, and suspend/terminate service.
Why we preferred to ship this in the first version?
The main reason is that would have been quite difficult for us to migrate from the simple interface we previously had to the Cloud Platform Bricks later, when the service provider has deployments. The second reason is the feedback we received from customers that was easy to understand: “This is very good, but I want to use VoipNow Automation for my other services as well.” Without Cloud Bricks, the implementation of different cloud services would have been quite difficult, meaning that we would have had to disappoint many customers. I am convinced that we already disappointed some customers who eagerly waited for Automation, but unfortunately, we did not have much of a choice.
How powerful is Automation on the first release?
From the architecture point of view, I do not think that we have any competition. From the features perspective, I know software packages that are able to do more. They miss fundamental parts of Automation, but when comparing side by side they have more features. Our objective was to build a very good platform and to develop it based on customer demands, not to pack thousands of features on a common package. Your feedback in developing Automation will be highly appreciated.
How will VoipNow Automation be licensed?
You will be able to get VoipNow Automation only leased licensed, with a pay-as-you-grow licensing (price per active customer account). VoipNow Automation is not going to be available as owned license. This is a risky move for us as a company because the service provider is essentially switching risk to us as a vendor (the service provider can drop the contract with us anytime if not fully satisfied). In this case, I consider the risk to be a big opportunity, because when we provide the right support to the customer, he grows and eventually we grow.
We are thinking to offer 50 owned licenses for up to 1,000 accounts at a special price for the first 50 customers interested. We want to do this in order to sustain the customers that will most likely get us the most valuable feedback. Please comment on this post if you think this is a good idea.
We will have more stuff about Automation soon; this was just a short post from Miami.
Welcome to ITExpo 2010 East – Discount Code
We want to let you know that during ITExpo 2010 East we will run a nice promotion – 15% discount for purchases of new 4PSA software owned licenses.
When you make the order in our online store, please use the discount code itexpo15.
The discount code is valid until 22 January 2010.
Once again, we expect you to visit us at ITExpo East at booth 618.
The Right Solution
As you have probably noticed, in December last year we updated our website. Together with this update a new Solutions menu appeared. While there is still much room for improvements, we really hoped that VoipNow * range of solutions will be easier to understand for customers.
After these updates it looks like customers still find some things confusing. While we plan to fix them ASAP, I think that I can answer to most confusing questions in a short post:
Question: Should I replace VoipNow Professional with VoipNow Core?
Most likely you cannot do this, because they are complementary solutions. VoipNow Core is not a PBX, so you cannot offer PBX services to your customers like you do with VoipNow Professional. Instead you can offer SIP trunking, wholesale VoIP services and you can build the core of your VoIP network by interconnecting it with ISDN PRI (SS7 will also be added).
So, VoipNow Core and VoipNow Professional are different solutions, but they are integrated in the VoipNow Platform (the generic name for the VoipNow ecosystem), which means that you can connect your VoipNow Professional servers to VoipNow Core and keep call rating and all billing components at the VoipNow Core level. Of course, you might be fine (based on the type of services you offer) with only one:
- If you offer only PBX services and you work with a decent VoIP wholesaler – you don’t need VoipNow Core at this stage. But our experience shows that you will definitely need it later.
- If you offer only SIP trunking and wholesale services using a custom Cisco, Open Source, etc. solution, the migration to VoipNow Core is the best thing you can do in order to easily grow and manage the infrastructure.
Question: Is VoipNow Automation the right solution for me?
It depends on what you expect. VoipNow Automation is a business and operations automation software. It allows you to build an online store for the products and services you also define in Automation. In the online store customers can order your services. The output orders enter into a queue and they are deployed by VoipNow Automation. At this level VoipNow Automation works with VoipNow Professional (VoipNow Core support to be added later), i.e. it uses one of your VoipNow Professional servers to deploy the order. Automation handles recurring billing (based on the utilization gathered from VoipNow Professional), processes payments, it monitors these payments and can even suspend or terminate services. Of course, this is an oversimplified overview, but I guess that you have already realized that it cannot be used as a replacement for VoipNow Professional.
There are companies that have implemented some of the VoipNow Automation functionality into their proprietary system using the API, otherwise it would have been impossible for them to grow. So that VoipNow Automation is not absolutely required in order to build the business, but it’s an easier choice that makes more sense economically.
Question: How can I get 4Grid?
First, 4Grid is not a product itself, it is just a framework. VoipNow Core has native support for 4Grid, which means that you can add as many nodes as you wish, to support the entire infrastructure. VoipNow Professional also supports 4Grid, but it cannot be managed in the interface, meaning that implementations are harder to manage. We will add 4Grid management in the VoipNow Professional web interface later this year.
Question: How far can I go with VoipNow Core?
There are no practical limits, as the infrastructure is self arranging/multi-server. VoipNow Core can be installed on a single server (no redundancy, not recommended), on two servers (simple 4Grid Lite setup) or on four servers or more (full 4Grid setup).
Question: How far can I go with VoipNow Professional?
We have customers that put on a single server more than 3,000 extensions. You can grow to more extensions in two ways: by using multiple VoipNow Professional autonomous systems (multiple non-connected servers) or by setting-up a 4Grid cluster. Each approach is correct, for example we have customers that use more than 20 VoipNow Professional servers to deliver services to over 20,000 extensions. As hardware is quite cheap, they prefer to put only a limited number of extensions on the server.
Question: When should I use the 4Grid framework?
Don’t think about 4Grid if you have less than 20 calls per second, 300 concurrent calls or less than 3,000 extensions registered to your system. You simply don’t need it at this stage. You might want to deploy it if you know that you will grow as hell in the next 3 months (and usually no one can guarantee this) .
Don’t worry about the 4Grid migration at a later date. It is very simple and it involves only a very low downtime.
Join us at ITExpo 2010 East
Happy New Year! I hope that you will have an exceptional 2010, much better than 2009.
At 4PSA everything started very fast this year. We will have a very busy Q1, with lots of challenges, which means that is going to be exciting.
The first event in Q1 we are going to join is ITExpo East in Miami that will take place between 20 and 22 January. You are invited to visit our booth #618 anytime. As probably is going to be quite crowded, you can schedule a meeting by sending an email to itexpo@4psa.com.
See you there!
Happy New Year!
On behalf of the 4PSA team I would like to wish you Merry Winter Holidays and a Happy New Year. Thank you for the wonderful collaboration in 2009 and looking forward for an even better one in 2010.
As you probably seen, there were some quiet developments at 4PSA lately that started with a new website and continued with a new product release, VoipNow Core.
4PSA is preparing a lot of new stuff and important improvements for 2010, I am sure that you will like them. But enough with these, just enjoy the holidays!
BTW, we also have a small gift – 15% discount for purchases of new 4PSA software owned licenses.
When you make the order in our online store, please use the discount code new2010.
The discount code is valid until 4 January 2010.
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