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Re: Simultaneous User Pricing 

Ann wrote:
>
>I.  When no. of simultaneous user pricing model makes sense: 
>
>Simultaneous user pricing makes sense (to me) when the electronic resource
>is accessed remotely from a publisher or vendor.  In that case, the
>deliverer must ramp up services to accommodate a certain kind of load on
>his system.  The provider is there not only to sell an information product

Your reasoning is to justify the supplier's pricing strategy.  But his/her
pricing strategy is both the delivery and production of the item.  Your
reasoning only deals with the delivery and not the production. 

Consider that it costs $X to produce the item, and that it costs $y to
deliver the item to each user (ignore any cost differences between local
and producer delivery). 

Model 1:  The item is priced institutionally and there are I institutions
so that the 'cost' is $X/I per institution regardless of the number of
users (much like the unused journals litering everyones stacks).  You pay
$X/I and if there are Ni users at your institution, you must also incur
costs of Ni times $y.  Alas, you don't know Ni. 

Model 2:  The producer provides the item to your users on simultaneous
pricing.  The producer expects N total users.  Prices at

($X + N*$y)/N.

You pay Ni * ($X + N*$y)/N per user.

Two differences:  A. Your expectations versus producer expectations
about the number of users.

		  B. Ni/N * $X versus $X/I


I won't go into all the interesting complications - You prefer
institutional pricing IF you are a relatively large institution and user
pricing if a small institution.  You prefer user-pricing if unsatisfied
users (turned away because there aren't enough simultaneous licenses) are
less onerous than budgets.  You prefer that the producer OVER estimates
the number of total users for user pricing and the number of institutions
for institutional pricing.  Your averseness to risk vs. the producer's
ETC. 

>III.  My discomfort with the simultaneous user model is further increased
>by the fact that with many systems and products, calculating how many
>simultaneous users one needs is a total guess.  It is an art (to be kind

Well that depends a lot on just how the simultaneous-user pricing is done. 
But if you guess low, your users complain but your costs are lower. 

Bob

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