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Jan 20, 2005



What TomorrowNow has shown is that enterprise customers are tired of paying 18-20% maintenance rates to vendors at monstrous gross margins, when the excuse for those maintenance revenues is either (1) maintenance costs, when a quick glance at the gross profitability of a maintenance revenue stream on any public enterprise software company's latest quarterly SEC filing will show you that these costs do actually not, in fact, exist or (2) to fund future R&D an product improvements, which are benefits that accrue to purchasers of future products, which you will be forced to upgrade to when support is discontinued on the current product.

I think TomorrowNow's early success with PSFT customers highlights the fact that enterprise vendors selling perpetual licenses are facing increasing pressure to greatly reduce maintenance fees.

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