Changes to Integrator Program as a business decision

#1

Mostly posting to get the official denial, but the changes to the discount structure, along with the free certification, feels like Inductive is positioning themselves for a buyout. Increased revenue (by decreasing discounts) and a large registered integrator base (via free certs) would definitely be two big factors in establishing a sale price.

Does anyone else feel like this is a possibility, or am I misreading the tea leaves? Given the NDA’s required for these kind of discussions I know that IA will have to deny it, but I’m curious if any other users / integrators are getting the same “vibe”.

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#2

I’ll give you your official denial, but I won’t censor any wild speculations you guys care to make!

This is the internet after all… no theory is too insane :slight_smile:

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#3

What changes are you talking about?

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#4

They sent out an email that shows the new discount structure for integrators. For us as Certified Integrators, our discount is going from 30% to 10% as of January 1. The rest of the tiers are seeing similar reduction in discount.

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#5

While I can not speak to the pricing of the product, I would be a good example of why the cost of the certification (final exam) should be lowered. I used to work in the two-way government radio niche. In November, I started working automation* and have readied myself for a final certification on Ignition 7.9 - now working on Ignition 8. Now think about that from my employer’s perspective… Would $2000.00 for two FINAL tests to cover Ignition 7.9 and 8.0 be a good investment in the business? ( This, given that many clients are still using 7.5 and other software because 8 has big changes in Java use ). It benefits small Integrators to get fully qualified programmers, yet it also benefits Inductive Automation if the cost is not so high that owners have to select which programmer is fully certified.
*Automation both programming and actual site hardware work eg. calibration, in three states so far.

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#6

I am just waiting for them to go public!!! I’d buy some.

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#7

Don’t hold your breath. The owner has stated at the community conference that no borrowed money or Venture Capital money has been used–he’s not beholden to anyone. This was in reference to maintaining the company’s ethical and customer-focused operating principles.

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#8

The assumption that reducing discounts will increase revenue is difficult to support. I would suggest that it will REDUCE revenue.
IA has built its success in part due to an enthusiastic and motivated Integrator base.
Halving the discount will HALVE that motivation.

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#9

Tend to agree with jrd. Putting some (round) numbers to it:

Low end system is going to be about $10k (almost certainly more with drivers and what not). 30% discount is 3K. A 10% discount is 1K. That $2000 difference would have paid for jlivingston’s training for 7.9 and 8.0 on the first system out of the gate. Given that the $10,800 system is almost certainly going to require add-on modules, he would have done better with the old system and pay the certification than to go with the new system.

Now double those numbers for Ignition Pro, and Mr. Livingston could have himself and his partner both certified on 7.9 and 8.0 with the money from the first system, and be raking in the margin on the sales for every system after.

I think the end result is that this is taking money out of the integrator’s pocket and putting it in IA. My question is what is motivating this change? Inductive has historically been amazingly disruptive by not following the trend of other SCADA providers draining the integrator and user pockets.

Does the owner just want a bigger chunk of cash, or is there something in the works that would precipitate a need for higher profit margins for IA?

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#10

For the best. As if I had a pot of money to buy any anyways :sweat_smile:

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#11

Totally off topic of this thread, but this line is interesting to me. Ignition 7.9.11 and 8+ actually improve the Java situation dramatically, as we have fully licensed and embedded it, such that the end user no longer has to worry about java in any way (installing, maintaining, and any current or future licensing changes). I don’t want to hijack the thread, but if you have specific questions on this, maybe create a new topic for further discussion?

The change had absolutely nothing to do with profit margins, getting more cash, “stickin’ to integrators”, etc. I think someone might give you a more full response, but the boring non-answer of it is that there are a number of factors in play, and this just made the most sense right now. One component is our effort to build an international network that actually still prioritizes integrators. That is, we need to build a program that works around the world, even with international distributors. That doesn’t help you, of course, but that’s why we’ve been looking hard at the ways we can replace that value in other ways.

These changes aren’t fun, given the choice between “more or less”, nobody would ever choose “less” (well, maybe if we’re talking about taxes…), but sometimes we have to do it. We spend a lot of time analyzing these changes, and actually talk to many many customers, and so far the response to this has been very reasonable. The vast majority of our integrators don’t sell the software to make their money on the margin, but instead use it to drive their integration work, which has a much higher payoff.

Finally, unequivocally, there is absolutely no buyout situation in play. All of the conjectures of motivation in this thread are just simply wrong.

All of that said and out of the way, please feel free to continue the discussion on the integrator program, your other points are perfectly valid.

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#12

I have to respectfully disagree with Mr. Clegg about Versions of Ignition being totally off-topic in this thread, but then more explanation of why I think so is in order: 1. Oracle has changed the policies about newer versions of Java when used for commercial purposes, yet it is still ‘free’ to students, etc. While Java is now ‘included’ in Version 8, there are other reasons why some customers might not want to just jump from 7.9.12 to 8.0.4. They are spelled out in the guides. While the end user may be happier in some cases, the new integrator staff might wonder if they want ‘free’ versions on personal PCs knowing that they might get put into business service later. Knowledgebase https://support.inductiveautomation.com/index.php?/Knowledgebase/Article/View/87/0/running-multiple-versions-of-java-on-the-same-windows-machine. 2. I started training on Ignition version 7.5 in November, since then I changed from my home PC to one that was supplied by my employer to learn Ignition 7.9 ( and lately, Ignition 8.0 ). Because the software is that much different, I can only guess that my employer might have me take two tests ( 7.9 and 8.0 ) when I complete study of 8.0. Yet he might also wish to provide those same final tests for another employee. So I think that the test cost might lead to more ‘certified’ Integrators, who might sell more product. Then the development cost might be spread out and become more reasonable per license copy. ( maybe… ).

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#13

This comment displays a serious lack of understanding of the current state of the world of Java. Commercial vs. open licenses are purely a matter of obtaining support, not a matter of running Java legally. The 2015 knowledgebase article you linked is not relevant–it says nothing about Java licensing. The following blog entry from last year is far more helpful. Pay particular attention to the role of OpenJDK.

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#14

Prior to making all certification tests free, we always made the Upgrades tests free. So you would pay $1k for the v7.9 certification test, then take the v8.0 upgrade test for free. On the upgrade tests, you’re only tested on the new features for that version.

You only had to pay for the first certification test unless you failed the test twice, which is extremely rare. After that, maintaining your certification was always free.

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#15

Whether it cost $2000.00 or $1000.00 per employee is not ( I am certain ) as important as the overall cost. He actually had considered taking on another employee, a previous co-worker. The time spent on study is likely a bigger expense, and Ignition has changed rapidly in the last six months. Yet it still comes down to what he can directly bill to the customer compared to training cost- I realize that as happy about a free test I may be- he may be less thrilled about estimating migration costs to an existing customer base. So my personal and professional attitudes toward the pricing changes differ.

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