Proposal to treat software and software-related services as products

This interoffice memorandum from Larry Portner, dated February 7, 1972, outlines a proposal to restructure how Digital Equipment Corporation (DEC) handles software. The primary objective is to treat software and software-related services as distinct commercial products rather than incidental components of hardware sales.

The proposal details the necessary steps for this transition, including establishing pricing models, implementing a uniform product identification system, creating software licensing structures, and launching a subscription service for updates and documentation. The document highlights numerous benefits to this shift, such as cost recovery for development and support, improved competitiveness in the market, better management of support expenses, and a more modular "buy-as-you-need" approach for customers.

Finally, the memorandum acknowledges potential challenges, specifically noting that OEM sub-licensing could increase administrative paperwork and that new product naming conventions might cause market confusion. The document serves as a strategic recommendation to establish the budgetary, financial, and organizational frameworks required for this transition by the start of fiscal year 1973.