Dear VMS Generations,
Thank you for your letter about VMS Software’s Subscription model. We appreciate your comments and feedback.
VSI’s Subscription program is a change for OpenVMS O/S customers. However, it is not a change for anyone who has used or purchased other software products. So, hopefully, the concept is not foreign to OpenVMS users. We moved to this model as it does offer customers and VSI benefits not available through the historical perpetual licensing model. For customers, it allows them the ability to plan and budget using Operating Expenses (Opex) instead of Capital Expenses (Capex). It allows them a steady commercial model of predictability of what they would pay year over year and with VSI Subscriptions, they receive the Rights to New Versions (RTNV) which can have a financial advantage for customers including those moving to our x86 product. Also, as we are going to a core based x86 model, the use of subscriptions may offer greater flexibility especially for those taking their OpenVMS environment to the Cloud thru hypervisors. It also may give customers valuable flexibility, since they can add and remove servers with less costs (compared to a perpetual model) and adapt swiftly to their changing needs. For VSI, it helps us to build a Book of Business which is more consistent and sustainable which allows us greater options for our future.
In reviewing your letter stating the group’s concerns, you are absolutely correct that just like many other SW license subscription programs the licenses expire if not renewed regularly. In the case of VSI subscriptions, we are providing a few basic methods which provides the customer alerts that they need to renew there subscriptions. First, there is a message that the operator sees once the subscription license is within 30 days of expiration. Second, VSI issues subscription renewal quotes to customers at least 30 days before expiration so that the customer is full aware of the need to renew their subscription. And third, in case the customer fails to enact their new subscription in time before license expiry, we add an extra 90 days “grace” period before the license will truly stop working. By providing these three actions in advance of the expiration date, we are trying to help customers not let their subscriptions expire. Plus, our support team has the ability to provide short term temporary licenses as an additional backup.
Regarding the point of “whether or not” VSI will be in business even in the next 3-5 years. No one has a crystal ball, but during the last few years we have gone from a “start-up” company to a small sustainable business backed by a significant investor (Mr. Johan Gedda) who views VSI as an integral part of the Teracloud Corporation. For the first time in 2020, we achieved a positive EBITDA which means instead of taking away from our parent company, we gave something back which ultimately is good for VSI customers, employees and our parent company. And, even if for some reason Teracloud Corporation decided not to keep VSI (which we do not envision), with sales of over €20MM in 2020 and improvement on this in 2021 and beyond another entity would see the business as having value.
It is also important to recognize that when the original agreement was made between HPE and Teracloud Corporation (VSI’s parent company), HPE chose to partner with VSI because they felt we could provide the technical competency and had the financial stability to properly service the OpenVMS market. Plus, they did not hand over everything at one time to VSI. Over the last 6 years, the transition from HPE to VSI has taken place in order to ensure that VSI could indeed take care of HPE customers. We passed this test and now are the complete solutions provider for OpenVMS customers.
Having said the above, we do recognize that there are specific situations that are so important to human health and wellness that even the idea of an expiring O/S license in a critical situation would not be the “Right Thing” to do. Therefore, to those customers who may have specific situations (i.e. nuclear plants, military armaments, local infrastructure projects, other key government agencies that protect their citizens, etc….), we will grant an exception to this policy and allow VSI Perpetual licenses to be provided. The key VSI person who reviews such matters for French OpenVMS customers is our European Sales Director, Mr. Adam Hoff-Nielsen. I would encourage any member of VMS Generations to engage with Mr. Hoff-Nielsen for such a discussion. We truly want to provide solutions that make sense for both the customer and VSI.
If I have not addressed all of your concerns and you wish to discuss this important issue, I am happy to arrange a conference call with Adam and myself to discuss with those interested parties. Thank you for your consideration and your interest in the OpenVMS Operating System.
Regards,
Terry R. Holmes
Chief Revenue Officer
800 District Ave Suite 530, Burlington, MA 01803
vmssoftware.com
