February 2, 2010

Thoughts on Paid Upgrades

The new fad in ExpressionEngine Land appears to be paid upgrades. EllisLab is charging $50 to upgrade EE1 to EE2, and what’s more, they plan to charge for some 2.x upgrades as well. Following EllisLab’s lead, Solspace has announced that they will start charging for major upgrades as well. They’ll begin with User 3, which will cost $9.95 to upgrade from User 2.

I’ve got major updates planned for a few of my add-ons, so naturally the prospect has tempted me as well. Why give new features away for free, when I could seize the opportunity to squeeze more money out of my customers? On the surface, it sounds great. And as EllisLab pointed out, this is the traditional approach to software upgrades. I wouldn’t expect Adobe to give me a copy of CS5 for free, just because I paid $∞ for CS4. So why should I expect any different from EE and EE add-on upgrades?

Well, because ExpressionEngine and its add-ons aren’t traditional software. By and large, my customers are web agencies who are developing multiple sites a year. And if other agencies are like the ones I’ve worked for, they follow a pattern: Build a site for a client with the tools that are currently available, and then move onto the next one. Maintenance is something that’s only done at client request. (After all, we use ExpressionEngine to cut down on the maintenance, right?) And I can’t imagine many clients are requesting the latest version of Wygwam, so long as what they have is working for them. So in the end I’m lucky if my customers are upgrading at all, let alone pitching paid upgrades to their clients.

But let’s say I’m wrong. Let’s say there’s a significant number of people who would pay for an upgrade if the features are worthy.

Currently if someone finds a bug in Wygwam, I can fix it, release it, and point them to the latest release. But that wouldn’t be so easy if I were to start charging for upgrades. I can’t imagine telling a Wygwam 1.x customer “That’s been fixed in version 2” would be very well-received. So whenever I fix a bug or plug a security hole, I’d need to reapply that change (and re-test) for each previous version that’s behind a pay wall. Frankly, that sounds like a lot of added effort for a few extra $10 bills in my wallet.

So I don’t suspect I’ll be joining this fad. For my sanity’s sake (or what’s left of it).

mahalie

Yet another reason why you’re the best!

Ray Brown

Brandon,

It’s people like you that make the ExpressionEngine community really shine.  While this may be a decision that focuses mainly on your sanity, it positively affects the masses who purchase your add-ons.  I can understand making people pay for upgrades from ExpressionEngine 1.x to ExpressionEngine 2 since they’re completely separate entities, but I feel that charging for updates outside of that realm is a bit much.

ExpressionEngine, with its extensible nature, allows me to build highly advanced sites easily by using add-ons, but I have enough trouble managing licenses for the handfuls of add-ons that I currently purchase for each of my clients’ sites.  Managing multiple versions of each add-on would be quite a pain in the ass.  It’s not about the money, which the ExpressionEngine add-on developers fully deserve; it’s about detracting from the ease of use that ExpressionEngine has come to be known for.

Kudos for taking the approach that you have.  Keep up the great work!

Brandon Livengood

I agree with you totally.

Paul Burdick

You bring up a good point regarding sanity.  Mitchell and I had a debate about this yesterday as we were considering releasing User 3.0 today and completely skipping the whole update process because we would have to hack Simple Commerce even further.

However, upgrading User 3.0 to work in EE 2.x was a great deal of work.  It was released four years ago now.  Should a person who purchased it way at the beginning still be able to upgrade to the most recent files without helping support all of that development?  We’re not trying to “squeeze” money out of anyone.  I am sort of insulted that you are implying that we are.  We are trying to support a business.  Pure, rational, honest economics are in place here.  Development and support need to be paid for.

Our customers (and clients) continually upgrade to the most recent versions of our Add-Ons.  We add new features and improve the code for exactly that reason—people want to upgrade to get new abilities.  We’re still debating the merits of charging for major upgrades that come about every 12-18 months, but I hardly think of the arguments in support of doing so as a fad.

Nathan Pitman

Yay for you. Glad to read that someone is doing the right thing. Sounds a very sensible approach to me. :)

Richard Lomas

If a lot of new features are added, and it’s not just bug fixes and tweaking existing features to work the way they should, then by all means charge for the upgrade.

That said, there are a few add-on’s for EE that I’ve used that don’t fully work that great to begin with, and then the developers have released a “new version” that really just makes it work how it probably should have in the first place.  And they want more money for the new version.

No need to name people specifically, but I echo a previous statement.  You’re the best Brandon and the approach you’re taking proves it.

In the long run, you’ll get more of mine and my clients money by operating your business how you are.

Erwin Heiser

Interesting take on the matter.

I for one don’t mind paying for the occasional upgrade if the new features are compelling and if it guarantees continued development and support. We’re all in this to make a living, after all.

Especially for business clients, the amount for upgrading a few extensions/plugins is trivial, compared to the ease of mind that comes with knowing their EE site is up and running in optimal conditions.

It’s not like (as you state) paying through the nose for the next iteration of Adobe’s bloatware suite.

Brandon Kelly

Paul – I don’t dispute that giving something like User a major overhaul is quite a large amount of work. And you should be paid for that work.

What I’m saying is that, given the fact that we’re really selling site licenses rather than personal licenses (for the most part), you’re already going to be paid for that work because your customers are going to continue buying your product.

I guess to me, the work involved in actively developing add-ons is really just to keep my customers coming back as they continue developing new sites, rather than to convince them to upgrade their previous licenses.

Charging for upgrades clearly isn’t a bad thing though. Solspace might have more resources, so maintaining multiple branches might not be such a big deal. I just don’t see it as a practical option for myself.

Rick Ellis

Hey Brandon—the problem with your model is it won’t scale. It’s great when you’re a company of one and your operating costs are trivial. But at some point, all growing software companies face the same reality: There is not enough revenue from first time buyers to subsidize all future development, nor the ongoing support and maintenance costs of existing customers. You can mask this reality for a while if your market is expanding rapidly, but eventually all markets slow, competition increases drastically, and market share becomes more fixed. The difference between good companies and bad ones is *how* they deal with this reality. We’re treading very carefully.

Euan

As someone who uses EE to develop sites as a hobby I have purchased a fair few add-ons from various developers.

I would certainly not be against paying for upgrades to add-ons. As Solspace have announced, a $10 upgrade fee to get v3.0 is not bad (albeit I don’t know what new features are in it).

As such, I think there are a number of factors that I would need to consider…

1. How many new features were in the upgrade
2. Security fixes should remain free for all versions
3. The cost of the upgrade
4. How long ago there last ‘upgrade’ was released

I wouldn’t expect to see a ‘paid’ upgrade more than once every 12 months. If there is v1.x and the new is v2.0, I would expect security updates to remain free for v1.x.

Just my thoughts.

Lee Bolding

I totally agree with Erwin - but would also add 2 points :

1) Maintenance releases are NOT upgrades, and should NOT be charged for

2) Nobody is holding a gun to anybodies head forcing an upgrade. If it aint broke, don’t fix it - if you DO, you got’s to hand over some cash (but in that case, you’re upgrading for a reason, right?)

Euan

Lee, very much agree, Upgrades to add-ons, are in my opinion a feature release and that anyone buying v1.x should expect it to fully function without any need to upgrade to v2.x and so on.

Brandon Kelly

Rick (!) – I guess my basic assumption is that, so long as I’m selling per-site licenses, I’m mostly immune to saturation. Even if every web developer in the world ends up using EE and my add-ons, so long as they keep making new sites, they’ll keep buying new EE and add-on licenses. My goal in maintaining add-ons is to ensure they continue to choose my add-ons.

Of course you’re speaking from actual experience, and I’m all theory at this point.

But I’m beginning to think that ExpressionEngine economics differ from add-on economics. You guys probably have a much higher percentage of new-to-EE customers, who may or may not continue to buy new licenses. Whereas people who take it a step further and also invest in add-on licenses are more likely to be experienced with EE – people who have already decided to make EE their go-to CMS going forward. My purchase history seems to indicate this as well – roughly half of new purchases are from repeat customers.

Jonathan Matlock

I think I’d have more confidence in buying from a developer who is charging for upgrades. I’ve always wondered how the EE community hasn’t done this in the first place. I want to buy you guys for you’re awesome add-ons so you can keep on keepin’ on.

At least give me a place to donate to Playa 3. :)

Joel Bradbury

I agree with Brandon’s assessment of the differing economics between the Core EE products and addons.

As an EE developer at a large design agency I know that the only time’s we’d approach updating a specific addon for on a _completed_ site would be when an issue has been raised that we know the update will address (such as playa’s recent update fixing a performance issue we were having with 4000+ items).

BTW really nice to see the big names’ reasoning on this kinda of thing (Rick & Paul etc),

Otto T Freeman

What you are doing here Brandon, is simply an honest and good business practice. Practical for you and beneficial to your new & existing clients. This is the silver lining which cannot be economically measured but is the key ingredient for the longevity of a business. Rick’s pragmatic wisdom reflects poorly, coming from a successful company, which has diversified with a suite of quality products to build a powerful presence in the market, exactly without such (double squeeze) practices. Treading carefully….?

Oliver Heine

I wouldn’t mind paying an upgrade fee when switching from an 1.x to an 2.x version. Myself I will probably not charge one, though.

But I can imagine the administrative effort it would take to handle paid upgrades within the same major version of an addon might quickly turn into a nightmare. If anything, that download renewal fee after a set time like we had with EE 1.x licences seems to be a sounder approach for a one-man-enterprise.

Lee Bolding

@Oliver, maybe a licensing platform, that would handle licensing, upgrades etc for developers would be a better idea? imagine something along the lines of the App store (not simply a storefront selling add-ons, which would be both lame and pointless)

I spoke briefly to Brandon about this at EECI…

Oliver Heine

@Lee, I think a more severe issue than the accounting side of things, as Brandon points out, is backporting bug fixes and other changes to a growing number of releases.

Say you have version 1.0. Then you add a lot of features and charge an upgrade fee for 1.2 and again for 1.3.

Now when you find some general bug, you need to update, test and roll-out three versions. The current one and those for the peeps that never (or just partly) upgraded because they were content with the limited feature set but deserve a bug-free product nonetheless.

As development continues you might not only add new stuff but also change or rewrite existing features or low-level parts of the addon so that differences between the versions will significantly increase.

And then you have to support all those versions of course…

With the one-for-all approach you can just tell your customers to upgrade to the latest version and then you are talking about the same thing. In the multi-version scenario you either need to constantly un- and reinstall your own stuff in order to do serious testing or maintain multiple parallel EE installs or devise some other extremely clever mechanism to handle that part.

And this is just for one addon…

Julian

Thanks Brandon. Maybe a little donate button when upgrading would work also. I just purchased the new EE 2.1 and feel like I paid full price to be a beta tester. EE2 still needs a ton of work. Thanks again for great apps.

Lightnin'

I don’t really care what the policy is. If you have attractive women telling you, “You’re the best!” then it’s a good policy.

Lee Bolding

@Oliver I can see your reasoning there, yes.

I guess for most developers, how they choose to deal with updates v’s upgrades will be on a case-by-case basis.

It’ll be interesting to see how this develops…

Danny Tam

I think both business models have their merits. What Rick was pointing out regarding competition makes real sense. Chris Anderson of Wired made this exact point in Free, when referring to economics and competition. That said, Chris Anderson also believes in ingenuity in finding different revenue streams, and I think that your model runs relatively well.

The open nature of the internet has presented itself an opportunity to push business models out there that rely more on good faith, and I think yours is exactly what that is — I suppose the overarching issue is if there is enough customers to offset the development costs, and if so, will it persist to be enough when competition offers similar prices, similar products, and so forth?

As a consumer, I enjoy the per-site business model. If I’m a small-time developer or operate a few personal sites, whether I am paying for major upgrades or for site licenses is insigificant because prices will be relatively similar in difference. When I go upwards though, the business model, I feel, tends to favor per-site licenses in terms of sheer revenue.

Something I would be interested in, as an add-on consumer is commercial micro add-on’s. There are tons of high-quality little add-on’s that function — but the problem with them is that they are loosely maintained. When push comes to shove, when a bug fix needs to be put out, or a super tiny feature request is made, I enjoy the peace of mind in knowing that these will be taken into account. That to me alone, is worth a small consumption fee.

Tyler

We recently went through this debate ourselves when we released Socialee. It was a huge upgrade over RPXee (we didn’t plan to release so much so soon), and the work we put into it was certainly worth the difference between the old price and the new price. In the end we decided to just give away the upgrade to the folks who had just bought RPXee (released only two months ago). Not sure if that’s what we’d do again, but for sanity’s sake…

Gerasimos

I built a client website on EE just because of your extensions. I have another 2 - 3 in line. From what i hear a lot of people are using EE just because of playa, fieldframe etc. IMHO you shouldn’t give upgrades for free. I am new EE user but an old developer and i have to say if only EE shared half the magic of your extensions it would be a better CMS.

Your decision though, and trust me on that, makes you stand out of the EE crowd. When i decided to move on EE, it took less than a day to find out about your extensions and your support.

Thank you for sharing with us all this magic for so little.

clarinet supplies

on that, makes you stand out of the EE crowd. When i decided to move on EE, it took less than a day to find out ab

clarinet supplies

that, makes you stand out of the EE crowd. When i decided to move on EE, it took less than a day to find out about yo

Locksmith Hialeah FL

Fabulous task ! Your website page has provided me the majority of the strategies I required .

mkvtoavi

I suppose the overarching issue is if there is enough customers to offset the development costs, and if so, will it persist to be enough when competition offers similar prices, similar products, and so forth? Thanks

Buy Silver

$50 to upgrade from EE1 to EE2? Man in this economy that sucks.

Post a Comment