Why a Monthly Usage Charge?

Our web-based software is priced using three components:

• Component #1 = Upfront price for the software
• Component #2 = Configuration, Data Loading, Customization
• Component #3 = Monthly Usage

I think the quote explained Components #1 and #2. Let me explain Component #3. This Component has three pieces:

1. Licensing of third-party code. Pentad Systems uses certain web-based code that we purchased from other vendors.
2. Web-hosting and Database-Hosting. Pentad Systems pays a monthly fee to a third party for hosting all our web-applications
3. Updates, Improvements, and Maintenance. Pentad Systems updates the core components of our web-based applications such as (a) new operating systems on the web server, (b) new versions of SQL server, (c) implementing the latest security improvements as they are issued by Microsoft.

All this is covered in the monthly usage charge.

Does it stay the same? Good question. In our five years in business, we have never increased it for a customer. Our vendors have never raised their prices to us. I can say this – I will guarantee not to raise it for a year. The good news about hardware technology – it seems that prices DROP year-by-year. Hard drives get cheaper. However, software gets more expensive. For us – it’s been a wash.