Friday, September 04, 2015

How JetBrains Lost Years of Customer Loyalty in Just a Few Hours

NOTE: This post was originally written after JetBrains announced a controversial new licensing model. Many people spoke out about it. The next day, they followed up to say that they were listening to the feedback, and two weeks later made a final post with significant refinements from their original announcement. But the content in this post predated either of those follow-ups. Keep that in mind when reading.


Yesterday's big news, at least for many developers, is that JetBrains - maker of popular tools like IntelliJ and ReSharper - is moving to a software-as-a-service subscription model for their products.

Previously, buying a JetBrains product got you a perpetual license and a year of upgrades. Once the license expired, any software you had received under that license would continue to work, but you would need to buy another license to get further upgrades. It was a simple model that worked just fine for many people, and most customers upgraded every year.

Starting November 2, though, that all stops. After that date, JetBrains will no longer sell these perpetual licenses. Instead, you can rent access to their software on a month-by-month basis.

And there was much raging.

Now, don't get me wrong. A subscription model has apparently been a common request, and some of the feedback to the announcement has been positive. This arrangement is especially good for consulting shops that do one project in C# and the next project in Java. Rather than committing to a year of use, they can choose to only pay for what they need in any given month.

But that's just one type of customer. There are also plenty of single-platform shops. I know a lot of people who just need ReSharper or IntelliJ. These customers will probably notice no big difference - they will renew for a year at a time, and probably get a small discount as well.

This all sounds great! What's the problem?

The first change, and probably the biggest, is that the software will apparently stop working when you stop paying for your subscription. That's probably going to impact indie developers the most. For a developer with an unstable income, it might be perfectly fine to stay on an older version of the software until they've stashed enough cash to afford the upgrade. That will no longer work. But it's not just indie developers. I've seen companies who forget to renew their licenses promptly or who have long and convoluted processes to approve the expenditure. I guess, under the new model, development grinds to a halt until the purchase goes through.

Another controversial aspect is that the software will need to phone home. Now, JetBrains has given a gracious window - the software only has to dial the mothership once every 30 days. And customers in an internet-restricted environment will be able to install a license server inside their network to manage the license pool. This is not an uncommon practice for enterprise or specialized software. But it does create an interesting challenge. The licensing FAQ indicates that it's allowed for an employee to use their personal license at work; I've often taken advantage of this. But it doesn't look like the JetBrains license server supports personal licenses. For people in an internet-restricted environment, it looks like this perk is no longer available.

OK, so users lose some ability that they previously had, but the software is cheaper, right? Customers win a little and lose a little, so maybe it's a wash. Yeah, the software is cheaper... sort of. My last IntelliJ upgrade was $99 for the year. Under the new model, I'll only pay $89 for a year. Huzzah! Well, that's only applicable for users who already own IntelliJ. New users will pay $119 per year, which is a lot less than the old, introductory price of $199. But here's the deal: if I ever let my subscription lapse, it looks like I end up losing my grandfathered discount. And even then, the prices given are all listed as promotional prices that are only good until Jan 31, 2016. Is this a sign that the prices will jump in the near future? JetBrains certainly tried to promote this new licensing model by saying that it would make their software more affordable. It does make it cheaper, especially for new users (which is great!), but the situation for existing users is a little more murky. It's only cheaper for me if I keep renewing promptly. If I ever miss a renewal, my yearly costs jump by 30%.

But none of those details really explain why the internet got so upset. I think JetBrains miscalculated just how much people like the current licensing model. Sure, offering a subscription-oriented model makes sense for some kinds of customers. But there are many other customers for whom a subscription model is going to be worse. JetBrains indicated that this change is being made primarily to provide a better service to their customers. The feedback that they got today is that many customers don't see the new scheme as an improvement. Now, JetBrains has said (update 3) that they would take the feedback under consideration, which is definitely a good sign.

It's always awkward when a company says "this is good for our customers" and the customers respond with "no it's not". We saw this a few years ago with Adobe. In that case, it was completely clear that they didn't care what their customers wanted. They had decided on a course of action and nothing could stop that train. But I don't think anybody was surprised to see Adobe go in that direction. People liked Adobe's products, but I don't know that anybody really liked Adobe as a company. JetBrains was different. They built a loyal customer base on quality software and reasonable policies. JetBrains products had become the examples people used when saying "you know, open-source is great and all, but I'm happy to pay for quality software". When I read some of the responses to yesterday's announcement, I get the impression that existing customers feel a sense of betrayal. They're confronted with the idea that maybe JetBrains is no different from Adobe. Maybe all the goodwill that they felt for this company was misplaced.

Ultimately, JetBrains's response to this kerfluffle will show the underlying motivation behind this change. Will they listen to the feedback and truly offer licensing options that keep everybody happy? Or will they double-down on the software-as-a-service model, in the hopes that the controversy will just blow over?

Of course, listing the problems isn't super useful. If anybody from JetBrains reads this, I do have some suggestions for what you could do to appease the crowds:

  • Continue to offer perpetual licenses. I don't think people are bothered by you offering subscription licensing; indeed, some customers seem to prefer it. But for customers who are happy with the status quo, forcing them to switch and threatening them with software that could suddenly stop working, it's a really hard pill to swallow.
  • Or... require that corporate licenses be subscription-based, but continue to offer perpetual, personal licenses. I'm guessing that most of the people upset with this change are people who are currently using personal licenses. These are probably your most loyal, and also most vocal, customers. These are the kinds of people that get your products into an enterprise environment. At least keep them happy.
  • Take another look at your pricing. You're asking users to replace perfectly functional software with software with a coin slot; if you stop feeding money into the meter, the software stops working. You have to give those users something in return. If you did something drastic - like cutting those prices in half - people might be far more willing to accept this software-as-a-service model.
  • Offering lower introductory prices is great! But you don't need to fundamentally change your pricing model to do that. You've offered sales before - I got my initial ReSharper and IntelliJ licenses during your end-of-the-world sale back in 2012. If you want to attract new users, you could just, you know, lower your buy-in price. Heck, you could even raise your renewal prices by 10%. I suspect that such a change wouldn't have even raised an eyebrow.
  • (Late edit after reading more comments) As a reward for subscribing for a year or more at a time, issue perpetual licenses for products released during that time. If I subscribe for a month and then let my subscription lapse, my software stops working. But if I subscribe for a year and THEN let my subscription lapse, any software released during the window continues to work. This creates a situation where JetBrains keeps making money, but customers aren't punished for letting their subscription lapse.

I was a huge Eclipse fan back in 2010, but a friend convinced me to switch to IntelliJ and I've been a loyal user since. I'm not writing as an outside observer, but as a concerned customer. Now, JetBrains doesn't really care about my business; I'm guessing that I pay for something like 4 of their developer hours per year. But people like my friend, and now me, are vital to JetBrains growing their business. I pushed and pushed to get ReSharper installed on all my coworker's machines; that ended up being something like 10 corporate licenses, which pays for a lot more development time. JetBrains got to where they are today by building a very loyal fanbase. I hope they realize that alienating that fanbase could tear them back down.

38 comments:

Anonymous said...

I think the biggest reason for the outcry is that it will no longer be so easy to pirate.

mattswork said...

i dunno. looks good to me. if there is one software company on earth that deserves our money, it is Jetbrains. I just hope they don't get bought out and digested by some other grotesquely large tech giant.

Anonymous said...

Nicely said.

Hadi Hariri said...

Hi Daniel,

Thanks for your feedback and detailed post. Just so you're aware, it's not falling on deaf ears, and we will act on them.

Jacques Petit said...
This comment has been removed by the author.
Anonymous said...

Just remember, Adobe hates you. They just want you to leave your wallet full of cash and back away slowly. I despise the idea of SAAS and haven't purchased any software that follows this model. When I buy something, I want to maintain control of the purchased product. When you force me to rent, were I don't want to, you are being callous and greedy.

Better buy Resharper quick, before I won't be able to support Jetbrains anymore.

Anonymous said...

Consider to give Netbeans a shoot. It is not Intellij (yet), but it is true opensource and is really great for Java, HTML and JavaScript.

Silver said...

Hey, I pay for another 4 hours of their developer time annually. That makes it a whole day.

Mark Starr said...

I, too, am a convert from Eclipse. I like the IntelliJ IDE and have opted for the personal license, and am in my second year of licensed updates.

That said, I'm a person who would rather buy and own my development tools as opposed to renting them. If/when I choose to buy new versions, I'll do so. It's not a matter of cost - I want to know that when I need to use a tool, it's in my toolbox - it is mine to use - no qualifiers or caveats.

I'll be sad to have to forego updates, but will do so if Jetbrains changes their pricing strategy. I'll wait and see - and archive my paid-for installer files.

Dan said...

I have been a loyal IntelliJ user since version 3 and have upgraded every year since. I also own Appcode and recently paid for CLion. I've been a strong advocate of their tools to others and have personally converted many users from Eclipse. The notion that a development tool I purchased will stop working unless I continue to pay for it is unacceptable. I don't expect free upgrades but I also don't want to pay for features I don't care about. I've skipped a few IntelliJ x.0 upgrades simply because they didn't offer any compelling new capabilities for me. One or two point releases later, a feature I cared about was added and I paid for an upgrade. A forced subscription model means a company gets paid whether they are innovating or not. Whether they are listening to user feedback or not. I personally won't support such a model and would just continue to use my current, non-expiring IntelliJ until it is no longer useful. Then it would be time to find an alternative.

IntelliJ is still, in my opinion, the best Java IDE out there. However, it also has a lot of competition that is free and their core user base is developers. If their licensing policies alienate those customers, it won't be long before new alternatives emerge or people become motivated to improve existing ones.

Wazoo said...

some great points. It was a good breakdown of the complications of licensing.

the *one* saving grace of Adobe's subscription move, is that one subscription opened up access to all products, instead of needing to hunt through the various "packages" that Adobe had previously.

in that same vein, I'd be interested to see if JetBrains tries the same approach. I have multiple JetBrains licenses, but would LOVE to just pay one fee and access both IntelliJ and WebStorm...(until the day that WebStorm can handle AS3 - which might be "never".)

Adarsh R said...

I too am an IntelliJ IDEA convert. However, with this new licencing model, I might have to start looking at Eclipse again.

Fair enough, JetBrains have done an excellent job with IntelliJ and many other products but this new model if implemented as this post details, would make many of us developers very unhappy. Can't agree more on the points about bringing back perpetual licencing.

Maybe JetBrains could offer subscription based licences as an alternative to the existing perpetual ones to suit certain companies and individuals instead of totally removing the perpetual licences.

Drew said...

I've been a loyal IntelliJ user for years. I go through periods where I use IntelliJ a lot, and in those times, I pay for the yearly license and update it. At times I don't use it very often and don't care about the updates. The current version works, I'm happy with it so I don't pay for new updates.

This change will force me to start looking for new IDE options.

Matosawitko said...

@Wazoo - they have already stated this will be the case. You can subscribe to smaller bundles or specific products, or an all-you-can-eat from their library.

Peter Holcomb said...

Really well said. The only small thing I can add is that Adobe gets away with subscription licensing because there are no real competitors to their software. In fact, they get away with lots of things (buggy releases, terrible customer service, ect...) due to the fact that there are no true competitors. JetBrains does not have this situation and I think this is going to seriously impact them. I'll just keep my copy of Intellij 12.04 around for as long as possible instead of upgrading.

Daniel Yankowsky said...

@Hadi - Thanks for taking the time to read it.

Wazoo said...

@Matosawitko - thanks. Sorry, I'm still catching up.

Shahbaz Javeed said...

I've been a loyal IntelliJ customer for years - even convincing people around me to try it out and helping them learn all the intricacies of their products - but this bothered me on a couple of levels:

1. Knowing that not continuing a subscription means I won't have access to the tools of my trade. I called up IntelliJ and talked to a rep who mentioned that my current perpetual licenses will be overridden while I have a subscription but will return if I cancel the subscription. This means I should be able to use the current version of my tools forever.

That sounds good except what happens to all the features I've gotten used to in the latest version of the product? What about all the evolution that has happened to the frameworks I work with daily that is catered for in the newest versions of the tools?

The more I think about it, the more I realized that as a paying indie customer who renewed licenses every year anyway, this doesn't affect me from a financial perspective but it *does* affect me from a rights perspective. I *really* like the idea of ensuring all customers (at least the indie ones anyway) who subscribe for a year should have their perpetual licenses upgraded to that year's products.

2. Software that phones home bugs me to no end. I can understand calling him to verify a serial number or license details as I enter them but after that, no more please. I'd like to continue working while I'm flying or in a train or in a place where there's crappy wifi or no wifi. I do *not* want to ever be in a situation that my tools stop working because I don't have an Internet connection. I have entire sets of documentation on my machine so I can work offline when Google or StackOverflow isn't available. I don't want my development environments to prevent that workflow.

Finally, as a parting note, I wouldn't be averse to picking up emacs as an alternative since it seems to have some serious capabilities thanks to various major/minor modes. Will there be a learning curve? Sure, but there was one with IntelliJ products as well. Besides, I've used emacs off and on for a couple decades - I'm sure adjusting to using it as a full blown IDE with most of the features I expect from IntelliJ products wouldn't be impossible. I'd rather avoid doing that but if IntelliJ products don't help me work, I'm willing to seek alternatives.

Anonymous said...

Let's start writing emulators of Jetbrainz products in eLISP.

Recurrence said...

Seems like a great move to me. Everything is going SaaS because it makes sense.

I stopped using their products a couple years ago because they were very buggy. However, I kinda prefer this enrol and forget about it approach as opposed to their setup where I had to go out of my way to renew every year.

I'm busy, don't bug me just work :)

Anonymous said...

I hope they change their minds. I've used IntelliJ for 15 years, upgrading pretty frequently, but there have been gaps in time where I haven't needed a license for my personal / side business needs. The last thing I want is to sit on a subscription or buy access for a month at a time.

gnihton said...

vim

Anonymous said...

That is bad. I'm working during my yacht cruising and from time to time have a long crossing - 21-25 days. It means I may loose my licence and have to use Eclipse.

Christopher Woods said...

There is hope.

_duncanhall said...

Sweet Jesus I hope they never let Actionscript anywhere near Webstorm. Actionscript is a great language but it no longer has a platform relevant enough to warrant muddying other tools with its nuances. When it did, there was FDT - a fantastic IDE that went tits-up by crazy over charging through a subscription model.

Kevin Trojanowski said...

I was considering buying a personal JetBrains license for stuff I do on the side, and considering taking advantage of the "use it at work" option. However, if they go to monthly payment there is no way I will rent a license.

Satyendra Paul said...

This move from JetBrains seems to really annoyed lot of programmers. I was checking reddit post https://www.reddit.com/r/programming/comments/3jl662/how_jetbrains_lost_years_of_customer_loyalty_in/ and surprised the amount of attention this post has received, close to 800 comments. that's huge.

Anonymous said...

Jet Brains is making a mistake. I have been a loyal fan of all their products, and have especially purchased new versions of Resharper every year, but the minute a credit card screen comes up to force me into a subscription model, i'm uninstalling it from all my devices. I agree with the suggestion from the article. Resharper just needs to come out with upgrades and charge for them. Developers are much more willing to pay for upgrades and feel control over their payments then have some software as a service deduct money from their credit card. I'm looking forward to seeing which competitors steal market share from JetBrains once they implement this pricing model.

Anonymous said...

Agreed, terrible idea. Please don't jump on the "subscription bandwagon". It may be the latest fad, but it's a horrible model for software sales.

Anonymous said...

crap, I`ve just bought in this year personal license by 40% discount ...

Javin said...

Jetbrains has shown signs of retreat, at-least they are listening to their customers https://www.reddit.com/r/programming/comments/3k44yq/jetbrains_the_licensing_model_announced/

MoonStorm said...

The article is wrong. In the new subscription model, you get to keep the version for which you payed at least one year (fallback license).

For me it's an interesting proposition, as my intentions were to make another purchase after my current license expired, in order to keep having access to up-to-date releases.

Granted, in the new model, if I decided to quit and they recently released a new version, I won't be getting it. That sucks a bit but not by much to be honest.

Caleb Cushing said...

Moonstorm is correct, once you have subscribed for 12 months they give you an auto-matic perpetual license for that version. You can pay for 12 months ahead of time. Currently each year you subscribe the subscription gets cheaper. This article is FUD.

Daniel Yankowsky said...

Caleb, the article's not FUD... it's outdated. It was written immediately after the initial announcement, specifically to raise issues and get people talking. I think it achieved that goal. You're right that the details are no longer correct, because JetBrains has since retooled their policy. But I see no reason to remove it or significantly alter its content. I have added a disclaimer at the top to hopefully make this more clear to future readers.

Tony Celsi said...

I'm not renting anybody's software. Jetbrain's or Adobe's. If I can't own it , I don't need it.

Anonymous said...

This is kind of sad. I'm of a software hermit, I didn't really see this coming.

I too usually skip a few versions here and there and just upgrade when I feel there is something that will affect my quality of life and save me time. The things I work on do not need to be on the bleeding edge all the time, and I just do not need continuous upgrades unless they are bug fixes (which shouldn't be part of a version upgrade anyways.)

I've done my share of advocacy for Idea and their products, and how good software was always worth paying for. I don't use intelliJ 8 hours a day 330 days a year either, maybe I get about one to two months a year of use out of it, but when I did it had always been a lot more enjoyable to use than Eclipse or NetBeans.

I never minded paying for upgrades when I did, cost is not an issue. I wish them the best, but i just can not see perpetually paying for something I just don't use that often. I guess my upgrades every other version were just not enough revenue for the people at Idea and I can respect that. I wish them the best, but I'll just stick to what I have till it becomes obsolete and transition to something else.

The sky is never falling, if there a void left someone will fill it and until then, there is Eclipse.

Anonymous said...

Gees what a bunch of lowlife's

Anonymous said...

I had no idea this was JetBrains' license strategy until I opened WebStorm this morning to find out I couldn't use it. What a load of horse shit! I can understand not being eligible for updates, but not being able to use the software I paid for? Unreal.

I stopped paying for Resharper with the release of Visual Studio 2017, as VS2017 is fine without it. I won't be paying for any other JetBrains products ever again.

Better strategy: Charge double, and let me keep my goddamned software. This "as soon as you stop paying for it you can't use it" is baloney. So if I pay for 10 years and then stop paying for it, I can't even use the first version I paid for 10 years ago? Asinine!

Stop paying for JetBrains software, people! Better options are out there. Some are free, and those which aren't certainly are on better license structures than this garbage.