Pricing a BPMS: It is Still the Wild West

  • May 12, 2011
  • Scott

Sandy Kemsley’s blog on BPMS pricing, she points out that pricing is still incredibly opaque.  There’s also a discussion on Quora that she refers to.

The problems:

  1. Different vendors use different metrics to price (user, process, CPU, PVU, duration, etc. )
  2. Different vendors are pricing different things (simulation, Modeling, BPMN, BPEL, XPDL, execution, integration, reporting, analytics, ESB, Messaging, Database, etc.)
  3. The customers are really in different situations.  If a vendor prices only by user, a customer with a simple process but 100,000 users can’t buy that product.  They might buy a product that prices by CPU (especially if their process has very little processing overhead).  So by publishing prices, vendors run the risk of turning away business as well as the risk of selling too cheaply.  (The CPU-priced vendor might have been able to charge a higher price, but if they published a per-CPU price then the customer will take the lower price, of course).

The root of it is that the vendors are trying to make a value sale (or value-minus).  And customers are just trying to get a price that makes their ROI (value equation) work out.  In that kind of market, transparency isn’t likely.

From Sandy’s blog:

Remember the bad old days of buying a car, when you had no idea how much it cost when you walked into the showroom, and had to go through some weird pseudo-negotiation between the salesperson and his manager, where they would throw in the free floor mats if you did your financing with them, give you an extra discount if it was within a week of the end of their sales quarter, or bait-and-switch you into a more expensive model? Enterprise software has always felt a bit like that to me, and BPMS pricing and sales tactics sadly fall into that same category, at least for many of the major vendors.

“the bad old days”?  Car buying is still like this in the US (you do have alternatives, but by and large, it boils down to this same kind of experience).

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