In article <✉forums.codegear.com>, Roman Kassebaum wrote:

> Sorry for asking again. As a non-native speaker I do understand
> that you are not earning money with Delphi. Is this correct?

What he means is that if today you spend $500 on a Delphi upgrade, 
$500 appears in the January profit & loss - it's a product sale. If 
you spend $600 on SA - it's a payment for a service so $50 appears 
this month, then $50 per month for the next 11 months. At the end 
of month one the other $550 appears on the balance sheet as a 
liability - which it is, to provide support over the contract 
period, or - in theory anyway - to return a pro-rata amount if you 
are no longer able to offer the contracted service.


If you're not already confused, assume that the current split is 
50% new sales, 50% upgrades (say $500). Then Nick waves a wand and 
next month all the upgrades turn into $600 SA. But in Feb only $50 
of this is taken + the same $500 for new sales, and the headline 
figure is a 45% collapse in sales! Of course the rest of the money 
will be drawn down but banks are vastly more impressed by sales 
revenue not expectations.


I switched to an SA type system in 1993 - on first time sales I 
take 80% now and 20% is treated as SA, then annual payments after 
year one are accounted for as 17.5% + 11 x 7.5%. In my case the 
effect in year one was to knock the sales figures down sharply, 
reducing my tax bill, but I didn't have a bank or investors to keep 
happy.


-- 
Tony Bryer, Greentram Software Pty Ltd, Melbourne, Australia
'Software to build on'  http://www.greentram.com