March 2, 2010 at 8:28 pm
Comments posted to this topic are about the item Usage Based Pricing
March 3, 2010 at 5:33 am
My favorite example of a terrible pricing "scheme" is a vendor (won't name names...it's not microsoft) that wanted to charge us first for the software on a per user basis, but then also wanted to add costs based on records used. That is, so many dollars per record "created" in the database. Needless to say, management was quite shocked to learn that the per-record costs added almost a million dollars to the cost of the software. :crazy:
March 3, 2010 at 5:57 am
The problem with usage based pricing, and this is always the problem - is that no one ever mentions any 'insurance' or coverage for lost productivity due to poor software design, condition or support.
If I buy a car that is a lemon, I am protected. I can even file suit against a company that sells me something less than what they promised - but somehow, in software, we have lost this ethos and therefore our standards of "quality software" have always been very low going back as far as I can remember.
There is one product I have in mind, and though I wont mention it (much), let me be Crystal clear that this product is a piece of garbage, poorly documented, horribly supported and it has cost my staff and clients countless hours of productivity and that is AFTER we paid an outrageous license fee for nothing more than a name. What recourse do I have? Virtually none.
I would never advocate usage based pricing until the software industry joins so many others and ensures some base level of quality. We do this with food, automobiles, homes, commercial office space, business equipment and so much more - its time for software to have at least that. If a software company sells garbage and costs productivity, they should be liable for that.
Doing that one thing would raise the level of quality to standards we have never seen since the PC revolution itself.
March 3, 2010 at 6:21 am
I've always seen software purchases as comparable to eating at a buffet restaurant. You pay a price to walk in the door and get seated, and maybe a price for special extras (which, oddly, often includes a basic beverage), but then what you eat and how much is really up to you.
That may not be the best model, for either restaurants or software, but it seems to work well enough for the most part.
I would like to see a "price per feature" option for SQL Enterprise Edition. Probably too difficult to make that modular enough to work that way, but it would be nice if it could be done. On the other hand, would the confusion generated be worth it? I'm not sure.
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March 3, 2010 at 7:31 am
Food for thought...in the meantime any possible of correcting the spelling (grammer) on the word "delivery"... I think you meant "deliver". No problem you no we all amke mistakes. 🙂
There are many people that think software companies charge way too much for their products and delivery subpar quality.
By the way...I get so much real value from your site...thank you.
March 3, 2010 at 7:40 am
Irony:
JPluchino (3/3/2010)
Food for thought...in the meantime any possible of correcting the spelling (grammer) on the word "delivery"... I think you meant "deliver". No problem you no we all amke mistakes. 🙂
😀
--Andrew
March 3, 2010 at 7:47 am
Irony indeed.
I don't think it would be that hard to enable some features in Enterprise edition. I would love to be able to buy a few of the high end features, partitioning, mirroring, compression, on a per instance basis. Even if I had to pay $2k for compression it might be worth it for me on standard edition (after the $5k initial price) instead of going for $25k, which might not be affordable.
March 3, 2010 at 8:41 am
Binary1010 (3/3/2010)
My favorite example of a terrible pricing "scheme" is a vendor (won't name names...it's not microsoft) that wanted to charge us first for the software on a per user basis, but then also wanted to add costs based on records used. That is, so many dollars per record "created" in the database. Needless to say, management was quite shocked to learn that the per-record costs added almost a million dollars to the cost of the software. :crazy:
So slashing costs is simply a matter of running TRUNCATE TABLE? 😀 But seriously, this sounds terrible.
Gaby________________________________________________________________"In theory, theory and practice are the same. In practice, they are not." - Albert Einstein
March 3, 2010 at 9:12 am
Wow! I had to look at the replies just to see how many geeks had a hissy fit about the difference between average and median. Not one! The geek community must be in a happy frame of mind today. :w00t:
Robb
March 3, 2010 at 10:16 am
" I would love to be able to buy a few of the high end features, partitioning, mirroring, compression, on a per instance basis."
That's not per usage, that's more granular per-feature.
IMO if you really paid per-use, the overall price would be higher because someone would have to administer it and bill you. Individual credit card transaction with admin overhead including occassional dispute resolution costs about $8, electronic invoices are about $12.
Also, what would be per-usage fee? Say you would pay a certain amount for each boot of Windows or start of SQLS. (You already get 50 "free" boots before you have to enter license.) What if you had to reboot because it crashed?
March 3, 2010 at 10:41 am
As a frequent forum visitor, the responses to this topic hit a cord.
We utilize Usage Based Pricing with our web-based timesheet application, with a twist.
1) We only charge the customer if a user has actually logged into the application for a given month.
2) If a user has a particular role ( i.e. 'Approving Official' ), then we do not charge for this user. Needless to say, staffing companies love this feature because their clients get to use an automated system for free. We figured, why charge someone just to click an Approve button.
The reason I mention these two items is because sometimes it really IS about the customer. I've had similar experiences with the type of software companies that SSC-Enthusiastic refers to. I would never want to see our company name shed in that light.
As a software developer, you should get goosebumps when a client uses your application. Obviously you should provide quality services for any pricing model, but sometimes it would help if companies would just do the right thing.
March 3, 2010 at 5:13 pm
Classic "It Depends" dilemma. I sit the fence on this one because there are scenarios where one is obviously better than the other, and vise-versa - for the customer. I think it necessary to evaluate the tipping point. We pay for both models at my work. Some apps are restricted to a per use, some are unlimited vis-a-vis the usage, and some are user based licensing. For our volumes, the per use model makes no sense at all - and thus it spurns the need to research alternatives. However, that model makes perfect sense when volume is low.
Jason...AKA CirqueDeSQLeil
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