Gartner has gone on the warpath, smacking down proprietary vendors' practice of discounting upfront license fees in order to lock customers into lucrative, ongoing maintenance contracts. The ironic thing is that it sounds somewhat similar to how commercial open-source companies price their software, except that there is no upfront license fees.
The difference is that open-source vendors aren't using inflated license fees to set the maintenance price (typically around 22%, on average) and don't force customers to pay extra for the right to updates. Customers subscribe to the open-source vendor's services, which include maintenance, support, and updates/upgrades: Not so in the proprietary world:
[Gartner] said upgrade cycles can push contract costs up by as much as 50%, with an average rise of 35% for SOA deals....
Maintenance and support costs are the surreptitious money spinners of software contracts, according to Disbrow. She said vendors will drop software costs by more than 20% or bundle 'free' software to lock customers into mandatory support maintenance and upgrade cycles....… Read more