How does Milestone expect to make money on this? I don't think you can just state that as obvious.
Ok, I will, but first let me say I don't understand your premise. You really want to argue both that Milestone is going to lose money AND that ONSSI is destroyed? Because if ONSSI is not destroyed, then how is it bad for anyone except (possibly) Milestone? End-user gets a better price.
Anyway, this is Software, were not giving away cameras or something, it's a virtual inventory, right? The question becomes how much they canabilize their own sales tommorow by giving it away today.
So the only $ they fully lose are the ONSSI people that were already going to switch to Milestone AND intended to pay full price. Milestone loses that revenue. Is that a lot of revenue?
What do they gain? Well, day 1, they get all the SUP revenue from all the converting customers. Is that a lot of revenue? Well if it's enough to destroy ONSSI, then yes. What are the costs of the Migration to Milestone? Well arent the two lower levels of the CARE actually just passed to the reseller for support? And the higher levels cost significantly more, so they pay their own way.
Then the big bucks start rolling in, new channels other products, upgrades to other versions etc. Then, on top of that, if ONSSI is actually destroyed, then competition is lessened and prices can rise because of the lack of alternatives.
So let's add it up, for new revenue we have:
- SUP $
- Sales of new channels
- Upgrades to higher versions
- Sales of other Milestone products
- Increased margin if/when ONSSI fails.
For lost revenue we have:
- Marketing cost of making the offer
- Loss of sale price to those ONSSI owners who WERE already going to buy at full retail before the offer came out.
- Cost of support to those in the higher SUP levels.
So yes I believe that new revenue could be more than the lost revenue. Don't you?
As for why not offer Genetec customers the same deal, the reason is because any cases besides ONSSI, there is no guarantee that ALL THE CAMERAS will work. This would indeed be a support nightmare.
Plus the whole back-end config can be script migrated in ONE SHOT. With Genetec its manual. And Milestone integrators may not know the ONSSI front-end, but they know the back-end, so conversion is simpler.