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January 14, 2014

PowerHouse licenses loom as used value

PowerhouseAt the City of Long Beach, a Series 969 has been decommissioned and powered down. It's waiting for a buyer, a broker, or a recycler to take it to another location. But the most costly single piece of this HP 3000 might be rolling out the door unclaimed. It all depends on how the new owners of PowerHouse, and the other 4GL products from Cognos, treat license transfers.

Hewlett-Packard is glad to transfer its MPE/iX licenses from one customer to another. The software doesn't exist separately from the 3000 hardware, says HP. A simple $432 fee can carry MPE from one site to another, and even onto the Intel hardware where the CHARON emulator awaits. You've got to buy a 3000 to make this happen, but the 969 at Long Beach could be had at a very low price.

For the Powerhouse license, this sort of transfer is more complicated. An existing PowerHouse customer could transfer their license to another 3000 they owned. Cognos charged a fee for this. At the City of Long Beach, there's $100,000 of PowerHouse on the disk drives and the array that goes with that 3000. It's hard to believe that six figures of product will slide into a disk shredder. Some emulator prospects have seen that kind of quote just to move their PowerHouse to the emulator.

But the new owners of PowerHouse have said that everything is going to be considered in these earliest days of their asset acquisition. Right now, Unicom Systems owns the rights to licenses like the one at Long Beach. If the company could turn that $100,000 purchase in the 1980s into a living support contract -- with the chance to earn more revenue if PowerHouse ever got new engineering -- what would the risk be for Unicom?

The obvious risk would be that PowerHouse might never gain another new customer. Used systems could be transferred instead of copies of the 8.49F release being sold. But let's get realistic for a moment. A new MPE/iX customer for PowerHouse, PowerHouse Web, or Axiant, on a computer no longer being sold or supported by HP, is not much of a genuine opportunity cost.

Instead, Unicom could be focusing on maintaining support revenues on such $100,000 licenses. The current Vintage Support fees are, according to a recent report, running in the $6,500 yearly range for a 9x9 server. You could make an argument that $6,500 yearly wouldn't be much to a Cognos running a much larger business objects product lineup. When all you're selling with a PowerHouse badge is the ADT software, however, the support money could well matter more to Unicom.

"That PowerHouse cost us $100,000 just to upgrade," said Roger Perkins at Long Beach. "But the license goes with the 3000's serial number, I think."

Could a used 3000, whose operating system license can be transferred for $432, be used for Powerhouse work by a new owner of the system? It's something for the executives at Unicom to consider, if they're serious about keeping PowerHouse alive and even growing.

11:26 PM in Homesteading, Newsmakers | Permalink

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