Why do you pay for PLC programming software?

J

James Ingraham

Tony, there's a big difference between an end-user application and a required configuration tool for hardware. Note that the VFD's you mentioned often have free configuration software. True, PLC programming software is rather more complicated. That doesn't stop Visual Studio Express, Eclipse, and Netbeans being free. All are at least as complicated (and usually vastly more so) than the $5000+ PLC programming software.

By the way, making me pay $5K for PLC software is a bad business model. It means that I can't use your PLC on a one-off project, and I don't want to switch from my current vendor to your brand because it means I'd spend tens of thousands on licenses for my engineers and technicians without getting any improvement in my processes. It also puts you at a severe disadvantage against a company (e.g. Turck) that gives away their programming software. In fact, the original post was a troll / leading question pitching the fact that his company's software was free.

Direct cost isn't the only reason that "free as in beer" and "free as in speech" are better for me, either. Keeping track of licenses is a major pain. A laptop hard drive goes out, and suddenly I spend two days on the phone trying to get everything straightened out.

So no, this ISN'T "the dumbest argument ever." Software is one of the great enablers of productivity, and cost-benefit analysis is an important part of any modern company's business.

Tony: "If you're good enough to earn a living programming then you should have enough to pay for the software."

That's a nonsensical statement. Are you honestly saying that every software package is priced perfectly for every individual and company as long as they're competent? If so, a one-man online T-shirt shop should run SAP and Oracle, and write his business logic using Rational.

-James Ingraham
Sage Automation, Inc.
 
James,

I hate to put it bluntly but, I know who you work for and I know some of the history of Sage Automation. I suggest before you keep on about businees models you have a decent chat to Andrew and learn a few things.

I have worked in manufacturing (special purpose machinery) on projects as little as $20k. I now work in resources (yes I whored my self off to WA inc.) and have worked on multi-billion$ projects. When you did your businees degree and learnt terms like "business model" did you also learn about "economies of scale".

To a small project under $100k an RS5000 or Step 7 license is about %5 of the project cost. On a $1B iron ore project a license for each PLC is a fraction of a percent. Each trainload of iron ore earns about $1,000,000 net. Go have a good look at what production machines are worth and what they earn per hour, what you are talking about is near meaningless.

You want to talk about real money then talk about downtime. Most customers have very little of variety of PLC or DCS or robot, or VSD for the simple reason it saves on cost and the biggest cost is downtime. How many places does Sage work at where there is great variety of PLCs. Your client GM in Adelaide. What does their main line cost to be down. Or Ford in Melbourne for that matter. I know Sage works at both. How many differant type of PLC do they have or safety systems or other things? Its got nothing to do with licenses and everything to do with service/maintenance/downtime. Even better consider the tier 3 supplier who makes some little widget for Ford or GM. Do you really think when his machine is down and he faced with a penalty clause for failure to deliver that he is going to stop and worry about his PLC license.

If you doubt this go and have a good long chat with Andrew. Do you think he went from his garage to where he now is without learning the real value of things.

For the rest of you. Next time a client asks for a particular PLC, VSD, whatever and you don't have the software, ask to USE THEIRS. The main reason most specify these things is beacuse its WHAT THEY ALREADY HAVE and most importantly SUPPORT.
 
$1200 for an automation software isn't really that expensive for the responsibility it holds right? Few hundred bucks you are looking at widely sold Windows Vista... Microsoft Office, Adobe Photoshop aint cheap either. I don't like the renewable license fee idea but an office worker probably cost more than that per month right?

There are things like patent, proprietary stuffs where the main purpose is so the holder can make profit out of it and other competitors cannot simply clone them. If the software can be easily replaced, of course it's good for end user but would be more competitive for suppliers.

The real killer is not the software license fee itself as you'r just paying $1200, but isn't it normal for suppliers to charge much more on slight modification/configurations?
 
J

James Ingraham

Tony-

You suggest (twice) that I should talk to "Andrew," but I'm afraid I don't know who that is. You also mention GM and Ford as clients of my company. To the best of my knowledge we have never done any work for either of them. Perhaps there is another Sage Automation that you are confusing us with?

Tony: "When you did your businees degree and learnt terms like "business model" did you also learn about "economies of scale"."

While I suspect this question is facetious and rhetorical, yes, when I studied for my business degree we covered economies of scale.

Tony: "To a small project under $100k...a license is about %5 of the project cost."

Five percent is huge. Even 1% (and a half-million dollar job is about normal for us) is certainly something that can make or break a sale.

Tony: "Go have a good look at what production machines are worth and what they earn per hour, what you are talking about is near meaningless."

In theory, perhaps. In practice, every customer I have will fight to get the initial price down as low as they possibly can, regardless of what the production will eventually be worth.

Tony: "How many places does Sage work at where there is great variety of PLCs."

This is a more interesting question than you might think. Quite a few of my customers specify the type of PLC, but not all. And even the ones that spec it inevitably have some odd balls. The overwhelming majority of my customers prefer Rockwell / Allen-Bradley. Still, there are PLC-5s, SLC-500s, ControlLogix, CompactLogix, MicroLogix (in various flavors). Some plants have switched brands, but lots of the old stuff is still around. One customer I have has a company-wide spec for ControlLogix... and then had two major projects that spec'ed Siemens.

Tony: "Do you really think when his machine is down and he faced with a penalty clause for failure to deliver that he is going to stop and worry about his PLC license."

He'd better. Because thanks to his stupid $5000 license he's about to get hit with a multi-million dollar penalty clause because the one laptop that had the right software went dead, and the floppy disk that the license came on is corrupted, and he can't get tech support to get his license fixed because the group that handles licenses doesn't work nights and weekends, even with a Gold Support Contract. Oh, and the install disks are fried to, but he can't just download the files over the web, he has to wait for the physical media to show up.

"Next time a client asks for a particular PLC, VSD, whatever and you don't have the software, ask to USE THEIRS."

How do I support the machine? They call me at 3 in the morning six years later, and I can't even look at the code.

I stand by the statement in my last post (on Feb 7) when I said that the DISCUSSION is worth having. Licensing, in terms of cost and execution, matters to PLC vendors, OEMs, and end-users.

-James Ingraham
Sage Automation, Inc.
 
C
Perspective again....
What if you are not making money selling machines but, instead have to support a dozen brands and a few decades of PLCs because you are in an industry where the machinery comes from vendors that have no reason whatsoever to standardize or to switch to your standard. A couple grand to do one upgrade is insane.

You are pretty much over the barrel. RSLogix is borderline worth the cost because I do a dozen or so new PLCs a year. But the majority of the equipment is something else and spread among everything from ABB to B&R to ERNI with some Mitsubishi and even Omron thrown in. This is a much different situation and the software cost is prohibitive. Not to mention the nightmare of getting every kind of DOS and Windows environment running and fixing crashes because every last one of these guys assumes their software will be the only thing you will attempt to run on the machine.

And relying on vendor service is untenable from a downtime perspective. I agree if you have the optimum situation it's not a big deal. If you don't, the current model is a major PITA.

Regards

cww
 
I find it amazing that the people who laud the vendors who give their software away don't honestly come to grips with what is almost universally true. They give it away because they couldn't sell the crap in the first place.
When something is given away, what does that say about its value?
Profit centers don't exist to support products with resources when there is no realized payback.
 
M

Michael Batchelor

Sorry, but this is a piece of the puzzle regarding why manufacturing is fleeing North America.

It's hardly the only reason, but sometimes it's less expensive to pay lower wages to do by hand than to pay for maintenance on automation.

Stupid and sad, but true.

MB
--
Michael Batchelor
www.IndustrialInformatics.com

Industrial Informatics, Inc.
3281 Associate Dr.
N. Charleston, SC 29418
 
J

James Ingraham

You are very wrong, Orion. For example, the configuration software for Hilscher's Profibus adapters is better than HMS's, but HMS is the one that makes me pay for it.

You ignored quite a few examples of high quality free software that I and others mentioned. Visual Stuido Express, NetBeans, Eclipse, Linux, Apache, the GCC, Sun's Java runtime and JDK, OpenOffice.org... There are a lot free-as-in-beer applications out there that are superior to any program Rockwell or Siemens has ever sold at any price.


Orion: "When something is given away, what does that say about its value?"

I take it you didn't see M Griffin's post. To paraphrase, would it make you feel better to pay for them?


Orion: "Profit centers don't exist to support products with resources when there is no realized payback."

In the case of selling PLCs, it this HARDWARE that makes the payback. But without programming software, the PLC is a big paper weight. It's like buying a car, and then they say, "Oh, you want the steering wheel so you can actually drive it? That'll be extra!"

I cannot use Company A's PLC without having the software for it. Therefor, if Company A charges me for their software, it gives me a disincentive to buy their PLC.

-James Ingraham
Sage Automation, Inc.
 
In reply to Curt Wuollet: I've seen people tear out AB PLCs on brand new machines and throw the PLC in the garbage because it was cheaper to replace the AB PLC with another brand than it was to buy and maintain the software to support it.

On a related note, no doubt many people have noticed the low cost of "netbook" computers (less than $400), and how they seem to be more durable (solid state drives) compared to traditional laptops. I have to wonder whether it would make sense to give every maintenance electrician and technician their own troubleshooting computer instead of having them share one between them. At $400, its cheaper than a Fluke multimeter.

If you have to equip each one with $10,000 worth of software, then it's out of the question. If the software is free though, it's entirely a different story. The computer and software become just another routine tool instead of a special case (and management headache).

It's something to think about when you look at what hardware to buy. It's not just that the software is expensive. It's also that the cost of the software is dictating how you manage your factory.
 
You know, I don't like it either. But there is a lesson there. The RS of our world have figured out what the value of their software is. You and every one else who's thinking it would be nice if it's free better start thinking about what your value is in the equation, and start charging at that level or else you cheapen yourselves down to nothing. Yeah, it's tough asking for the fair value you are worth, but the sooner you get on with it the better for all concerned. (Hey, and it would finally kill this thread).
Hugo
 
C
That's interesting too...
I find the free software I have is far more valuable than the extremely expensive drek I work with. For one thing the expensive variety always belongs to someone else and the FOSS is mine. If things change, as they are extremely likely to do lately, which has the greater value to me? Even if you have the illusion you own commercial software, that's only because you haven't read the license.

Regards

cww
 
Having some detailed knowledge of one of the major suppliers, I certainly can confirm that the largest portion of profit is made on hardware. However, while I was with that "major", and after being beaten up often about not making that same margin percentage on services, its not surprising that most majors charge for everything they can. The business model I operated under expects to make a similar margin on all the different areas of products and services they provide. This includes programming software. It is not a model that necessarily looks at the overall package and value to a customer.

The Rockwells and Siemens of the world have an installed base that they can depend on for continuing income, thus they can charge for software/services that some smaller suppliers cannot. The cost to change vendors (with the associated training and spare part support) is just too high except in exceptional cases.

All for profit businesses are designed and are expected to maximize shareholder value. End users are a part of a business activity only if the end user generates shareholder value. I guess I'm just saying that most any company will charge whatever the market will tolerate. If Rockwell Software can charge $1000, $3000 or $10,000 for the same package, what do you think will be listed on the PO?

Maybe opearting under a different business model would make additional money for a supplier but that is not something an established company is willing to do unless they are under duress.
 
Hugo wrote:

>You and every one else who's thinking it would be nice if it's free better start thinking about what your value is in the equation, and start charging at that level or else you cheapen yourselves down to nothing.<

The potential value of a project is determined by the owner, not the suppliers. This value is somewhat fixed. If one supplier sucks up so much of a project's cost that the other suppliers cannot add their own products or services to the cost, and keep the project within budget, the project just doesn't get done at all, and no one wins. You cannot just have everyone raise their price because one vendor thinks his products or services are immune to the owner's budget.
 
C
That's the interesting thing about this thread. There are many to defend the Major Vendors with their $400 serial cards and ridiculously spendy software and the protection racket after the sale where you get to pay for any of the numerous bugs they may have fixed and get some new ones in the bargain.

And the arguments are often that it somehow is akin to how we, the users and commissioners of systems get paid, as if pushing exorbitant equipment adds or relates to our value in building solutions. But, you and I get paid exactly the same for using a Koyo as we do for using an AB and except for rare exceptions, either will solve the problems that PLCs are good solutions for.

Yet few would insist that you should buy your PC from IBM or Apple because they have "found what they are worth". (Yes, I know IBM doesn't make PCs anymore) And PCs would still be $2500 if they did.
Most will agree that clones do just fine. And although it's still difficult to buy a PC without Windows on it, few would agree that Windows is worth what ever MS decides to charge for it.

I just wish that enough people would see the parallels to make the more "user friendly" competitors more of a threat. And make big automation actually compete on merit and customer relations. And make lock-in the exception rather than the rule. I just don't see a downside for automation people. The wasted money doesn't end up in our pockets.

Regards
cww
 
C
By insisting on a little less one-sided terms, we could easily provide that duress and all would benefit.

Regards
cww
 
I have found that if I purchase my hardware from a company that sells reconditioned plcs, I can save aproximately 50 to 75% from Allen Bradley's list price. This way I can justify the software cost. The company I use is Tek Supply and they give the same 1 year warranty as AB. Their web site is www.tek-supply.com

Regards,
Bill
 
E

e: Why pay for software

Lee,

why does it have to cost that much,nobody asked you to develop such costly software in the first place. you decided that type of application. Omron, mitsubishi, A.B, ect, ect. plcs softwares should all have the same software application to cut cost and also to make it easy for users. instead of having to spend money learning different applications. users do not have any say in what is going on. untill users decide enough is enough and vote on a single application, plc and software cost will always hold us hostage.
 
J

James Ingraham

" ... plcs ... should all have the same software application to cut cost and also to make it easy for users."

Hopefully not. I would call that a disaster.

What might be nice is a standard FORMAT that any software application could save and open. Like how OpenDocument Format and PDF are all handled by myriad applications.

-James Ingraham
Sage Automation, Inc.
 
C
I suppose it would depend on which one. Having RSLogix work with all would generate a lot more enthusiasm than having say, Step 7 as the one. But it is interesting that the general software market seems to want only one product per catagory e.g. Office, AutoCAD, to the detriment of all others.

Meanwhile, the automation world has dozens of incompatible ways to product functionally identical results. Common formats and file compatibility would ease the incompatibility but would do nothing to mitigate the enormous cost of developing, maintaining and supporting the dozens of duplicative software packages which is obviously passed on to the customer.

It is even more interesting that there are business models that support both incredibly expensive software as a second profit center and those that give the software free as a part of the hardware business. I submit that using a common Open code base would cost less than either model. This means that it stands a chance of coming to pass, as is happening in the cellphone, netbook, and embedded markets. All we need is for sales to tank a little further where price begins to matter more. I am curious why you think that would be a disaster, well, except for the Step 7 case.

Regards
cww
 
In reply to James Ingraham: A standard format won't do you much good without standard content. A lot of newer PLCs use the programming software to pre-compile the program and add run-time libraries before downloading it. The vendors don't have a standard binary download format even between different models of their own products, let alone work with anyone else's. That's why you have to upgrade your programming software to use a new model of PLC.

Open formats only work when different parties are willing to work together towards a common goal. You mention OpenDocument, but you might want to remember that Microsoft was one of the last to implement it, and they still managed to produce a version that was incompatible with everyone else. What was the reason for that? Simple incompetence, or was it deliberate? We *know* that the only reason they implemented it at all was because they were told by a large number of major customers that they could forget about bidding on future contracts for office software if they didn't have it. That apparently didn't constitute enough incentive to actually do a good job of it though.

So, the question has to be why would any of the major vendors want to be compatible with anyone else? If customers didn't need to buy expensive vendor software to use their PLCs, how many of their existing customers would buy it? 10%? 5%? Programming software is a profit centre for the major vendors. Why would they want to give that up?
 
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