The other day I tweeted about something that has bothered me for a while:
[tweet http://twitter.com/thoolihan/status/236099028545318912]
I feel like it’s worth explaining my problem.
Software companies, particularly those that sell large enterprise software, want to get customers into their CRM systems and into the sales pipeline quickly so that regional sales folks can follow up. Pricing and other aspects of licensing are often customized to the industry and other needs of the customer.
While those arguments seem valid, I think it’s foolish to put up barriers that keep customers away. In the course of evaluating software, often times you just want a classification. What price range is the product and what is the licensing model (one time? yearly?) so that I can compare it with other software.
Let’s go through some of the common arguments:
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No one pays that price, so why lead with it?
Who pays full price for a car? Yet I can look up MSRP on the manufacturer’s site, cars.com, or on any number of other web sites. It helps me determine that a Hyundai Tiburon is competing with a Mitsubishi Eclipse, not with a Porsche.
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Only enterprise customers are using these types of software, and those purchasing managers know how to get in touch with big ISVs.
First, that’s just not true. Take Oracle for example. If only Enterprise customers matter, then why is it available on Amazon’s EC2 model? Oracle has migration tools from MySQL, various licensing models, and all aimed at bringing smaller customers into using Oracle 11g. So why not let them see what the tiers are?
Second, Enterprise customers are often collaborating with service and consulting firms (like mine), why can’t we get a quick view of pricing in order to make recommendations? Sometimes we want to partner with an ISV, but often times, there is no need. So if I sign on to your sales form, then I’m getting called about purchasing your product when I’ll never purchase it.
This is a really important point. You might expect the consultant to put the leg work in anyway. If this is a software selection process, then yes, we’re expected to deal with the sales team if necessary in order to get 100% accurate licensing cost. But on a project with a tight deadline where a consultant is recommending many different tools to put together and do the job, they will often not dig that far into the possibilities. So they are making recommendations to an Enterprise customer based on things like: old pricing, forum posts, and reputation. All because the vendor won’t post a pricing sheet. I’d rather post a price matrix with higher prices with some large clauses like “negotiable” than have people running around deciding on my software based on guesses.
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There are drastically different programs available for startups and we don’t want to cause confusion
This one has some merit, but I still say post a price sheet. Put a big link at the top for other paths. For instance, new companies going with Microsoft technology have the bizspark program available. Above a SQL Server price sheet, I would put a big bold link that says something like “If your company is new, click here to learn how you may be eligible for free Microsoft licensed products for several years”.
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Our licensing model is too complicated.
This is the only reason I see valid. Some of the models (take IBMs PVU pricing) probably just complicate things too much to post a simple matrix. That said, if you’ve reached that point, I would consider simplifying.
So what about my company, we don’t post any prices for our services. (This is my personal blog, I’m not speaking for the company, yada yada yada…). That said, custom professional services is much different than being an ISV. Price matters, but we are usually evaluated on our ability to do a job, and how well we will do it. Additionally, there are so many variables and different models for how we right contracts, and it’s usually per the clients preferred model, that pricing sheets are rather useless.
But it’s a fair point that some ISVs may see themselves that way. I just think it’s a mistake. At the end of the day, developers and architects are looking to classify your product by price and features. Are you going to provide them that info? Or is a forum post / tweet going to provide them some info that may or may not be correct? You decide.