Renewal Time - Prices have jumped 3x for us

[jeffbourassa]

Hi All

We are in the process of renewing our Veeam Subscription/Support - we do our renewals every 3yrs. We are currently on Veeam Enterprise Plus.

Our quote for 3yr renewal is 3x (3 times) what is cost when I last renewed 3yrs ago. Not to give specifics for us but this is a jump from thousands of $ for renewal to 10s of thousands.

So this has me giving a hard look at options and looking at downgrading our ENT+ license to possible ENT only or STD to try and stay within budget. In talking with the Veeam SE locally Veeam defends these cost increases as a increase in features, I get that - but 90% of what we do is what we have done all along, simple backups and restores.

We use Veeam for it's core competencies - Backup and Restore, the "extras" are all nice but they are ultimately not part of the value for us, simply put feature bloat has found it way into Veeam products and is driving the prices up - and in our cases this jump is not incremental it is exponential. We have been a Veeam client close to 10yrs now - this is the first time that I have been compelled to look for alternatives.


For comment.


Jeff

[Mike Resseler]

Jeff,

I understand your concerns, but as our SE is telling you, the price increase indeed comes from a lot of additional extras. Now you say that they are no value to you so my advice would be to investigate what you exactly need (or what are you using today) but at the same time make the exercise if some of that additional functionality is not useful for you and can actually prove the additional cost to your peers. Let me explain.

1. Make a list of what you actually use today (and compare that list to our STD / ENT / ENT+ functionality to see what suits you best)
2. Then look at the functionality that is not in your chosen edition and see if it can improve your availability strategy and even save costs in work hours or added functionality to your end-users.

For example:
- Would it save you a lot of time and effort if end-users or helpdesk operators can do their own restores? (meaning the restore will be done faster making end-user happy and no work for you)
- Maybe you have a lot of SQL admins that would like to do their own restores of databases (again saving time so you can do other important items for the business)
- What about the possibility to do surebackup to test your backups / replica's each night to be sure (and prove) that you can recover (saving time again, no need to build specific environment that probably won't even match the real production one because of cost...)
- (I can continue )...

I certainly won't be the one telling you that you need to continue with ENT+ if the functionality is not needed. But I do had my share of mistakes in the past by selecting the wrong edition purely based on budget (because that was the assignment from the bosses ). Afterwards, because (just like you it was a long-term decision) I regretted this because the business demands changed and I couldn't deliver. Talk to your colleagues what they expect today and in the future, talk to your customers / end-users and note their expectations and use that to talk to your management. As said, I made the mistakes before and learned that if you have a good business case (and of course afterwards then implement and use the functionality ) that the budget is off less importance because management will realize the value and the return of the investment

My 2 cents

Mike

[ChuckS42]

Jeff - Is your renewal really an update of a Subscription-based model (plus Support)? If so, there's an argument in favor of sticking to the traditional perpetual license purchase, and renewing support only.

Mike - I see what you're saying, but a price jump that significant will make a lot of your customers cringe. I'd hate to be put in a position to have to justify the price increase by pointing out newer features they have no use for. Might want to re-think that. A modest price increase might be justified, but 3x?

[Gostev]

A modest price increase might be justified, but 3x?

To be honest, I don't understand how 3x is possible even in theory - when depending edition, the product price increased no more than 30% over the past 3 years, and maintenance has always been calculated as the same percent of MSRP.

So renewal price increase should be 30%, not 300%? Unless something else is going here as well, and we're not comparing apples to apples...

[vClintWyckoff]

Just like my colleague Mike mentions above and you too have noted, many features have been added to the product over time causing an increase in the overall cost of the product as well as maintenance. I would be curious to see the math myself, but I guarantee that you have saved your organization many dollars by originally committing to the 3 year maintenance agreement and not renewing year by year - this is a benefit of signing up for multi-year agreements. For discussion purposes, what made you purchase Enterprise Plus originally? I think it is also worth noting that industry averages of software maintenance are around 18-25% of the current MSRP, so our pricing is nothing out of the ordinary.

FWIW, we just announced Veeam Backup for Microsoft Office 365 (this may or may not be applicable to you, I'm not sure) but customers current on maintenance can get 1 year of unlimited mailbox backup for Enterprise Edition and Enterprise Plus get 3 years.

[Gostev]

By the way, considering that we license per socket - and sockets became much more powerful in the past years with many more cores added, allowing you to run more VMs per socket - I would argue our "VM-normalized" price have not increased at all? As 10% per year seems about in line with "cores per socket" ratio growth to me, no? Am I making sense here?

Anyway, let's focus on the main issue first, as 3x maintenance price increase most definitely makes no sense to me as I'd expect about 10x smaller increase.

[tsightler]

Well, the OP does say they have been using Veeam for almost 10 years now, which is just about as long as the product has existed, but now they have Enterprise+ edition, which certainly didn't exist 10 years ago. If they started with Standard Edition, but then took advantage of the free upgrades to Enterprise or Enterprise+ as those editions were introduced (I believe Enterprise was introduced for v5, Enterprise+ for v7) then that's one way they might see a significantly higher support renewal cost as, while the upgrades themselves are free, the support renewals will be based on the much high cost of the newer editions.

If I'm not mistaken, the free upgrade to E+ was offered back in Q4 of 2013, shortly after v7 was release, so the timing seems like it might work where they could have renewed last time at Enterprise pricing, but then upgraded to Enterprise+ for free very shortly after that. That means now they are renewing at Enterprise+ pricing, which is roughly double what the Enterprise price was in 2013. That could at least explain 2x, but I can't figure out any way to get to 3x, unless they just got a really good deal last time!

[mkaec]

...the Veeam SE locally Veeam defends these cost increases as a increase in features...

I don't know if I agree with that. You can't arbitrarily raise prices and justify it by additional features if competition is healthy. In my opinion, the backup software market has been in bad shape for a while. Veeam's tag line of "it just works" is very telling. All backup software should "just work", but sadly, Veeam was able to differentiate itself from competitors by working well, restoring when restores are needed and not randomly crashing for no reason.

[mkaec]

...If they started with Standard Edition, but then took advantage of the free upgrades to Enterprise or Enterprise+ as those editions were introduced...as, while the upgrades themselves are free, the support renewals will be based on the much high cost of the newer editions.

Ah, yes. Not free as in beer but rather free as in we'll get you at maintenance renewal.

[ddayton]

I also do the 3 year renewal and only just did my second 3 year renewal. There was a significant increase in the cost, but only what I suspected. I started with Enterprise and stayed on Enterprise. When the offer to upgrade to Enterprise Plus for free was announced I examined the differences and read in the details how the maintenance renewal cost would increase to cover the new license level and added features, so I declined the upgrade. You are correct that there are many more features being put into the product, but many of them are for specific hardware support and features I do not and probably will never need or use. For me personally my virtual server and iSCSI storage used for Veeam B&R targeting infrastructure will stay status quo for many years, so support for each new HP, DELL or EMC device (feature) will have no impact.

HOWEVER! If Veeam added some features I could use then it is worth the increases:

1. perform a vm restore directly from a tape backup
2. perform a file restore directly from a tape backup
3. schedule a cleaning job on my tape library

Still love'in the product and wouldn't want to give it up. I sleep better at night.

[Gostev]

1 and 3 are in 9.5

[Gostev]

Ah, yes. Not free as in beer but rather free as in we'll get you at maintenance renewal.

Not true as you always have the flexibility to downgrade to the original edition and pay future maintenance off its MSRP instead.

[jeffbourassa]

Hi All

Good conversation. Thanks for everyone's comments.

We did start with Standard many moons ago, then we upgraded to ENT and then to ENT+ for "free" when that was introduced in 2013, at that time we did a 3yr renewal at the level we were at then received a free license bump when the new version came out.

So cost wise I am considering downgrading the ENT for sure, and possibly even down to STD edition. Numbers wise on a 3yr renewal - downgrading to ENT is 2x what I paid 3yrs ago (200% more) and, if I downgrade to STD it is roughly the same price as renewing 3yrs ago (but only if I give up the ENT features).

ENT+ is really 300% more than what we paid on a 3yr renewal, so that is a dead option at this point.

[BlueComp]

Have to agree about feature bloat. I'm not interested in the added-value from 'hundreds of new features' if it's just a list of integrations for various SANs I don't have.

[larry]

Used Veeam since 2010. Took the free upgrades and got features that are worth paying for.

1)CBT
2)Sure backup, fully automated in the new Enterprise edition
3)on-demand sandbox in the new Enterprise edition
4)Reports for all jobs, one pane of glass in the new Enterprise edition
5)Instant VM recovery
6)Instant file level recovery
7)Parallel processing
8]WAN acceleration
9)Veeam Explorer for Storage Snapshots
10)Veeam Explorer for Microsoft Exchange
11)Backup from NetApp SnapMirror and SnapVault - big saving on WAN cost
12)application consistent NetApp snapshots
13)Instant VM recover for storage snapshots - much better RTO and RPO
14)On-Demand Sandbox for Storage Snapshots
15)tape support – no longer pay support to BE -saying bye to BE

After putting the list together, I see am getting much more value than I thought. The items I listed are the ones I use so maybe more smiles for me. Lost track of new features over time but while making this list I see they are now a requirement to meet recovery objectives. No I don’t work for Veeam I am a end user who as to protect data. These items are not feature bloat to me.

[Andreas Neufert]

Hi Jeff,
this looked strange to me (even as a SE) and I tried to find an 2013 price file... finally I found one in a temp folder in an old backup

So MSRP price list wise we had back in 2013 CPU Tiers.... Tier A 1-6 Core; Tier B 7-12 Core and Tier C 13-18 Cores. This concept was changed to CPU Socket licensing without Tiers later.

Comparing this with the actual price list (as well MSRP list prices) ...

Maintenance (9x5) Tier A Enterprise Jan2013 to Enterprise Aug2016 is 1,26 times (I would say that this is in the Industry Standard range... and think about at that time everybody used 4 Core CPUs while they are using today 10Core CPU with much more VMs per CPU)
Maintenance (9x5) Tier B and Tier C Maintenance Jan2013 was even more expensive then today. Veeam used the Tier A prices later as base when we introduced socket only licensing.
Maintenance (9x5) Tier A Enterprise to Enterprise Plus is 2,01 times and this comes from the fact that Entperprice Plus edition has a much higher price while delivering more value (see above). As Customer you got the new edition for free without payment.
Btw. Maintenance (9x5) Tier C Enterprise Jan2013 to Enterprise Plus Aug2016 is nearly the same price.

I work for Veeam EMEA and maybe other countries have other price lists. Maybe you got a special discount in 2013, upgrade from (9x5) to (24x7) or used a promo or....
Contact a Field SE from your region an let him see the quotes and invoices, he will find out why it is that high compared with 2013. If you PM me your email address we can figure it out together if you like.