Change Your Pricing


Chris Brogran tweeted about a Seth Godin post about what happens to companies when they change their pricing.

I thought it was great, so I figured that it would relate to SharePoint in some way or another.   :-)

“When a restaurant goes from a la carte to either a buffet or a fixed price meal, it is able to find a new class of customers.”

So, how does changing your price relate to SharePoint? Well, If you think like an ISV, then you are thinking 2-3 years ahead, with a product lifespan of 5-10, maybe 15 or more years, right? So, let’s look ahead a little bit.

Are you thinking about what will happen when SharePoint Hosting is the natural order of things? What happens when enterprises only install SharePoint into their own data centers to handle their own internal, most business critical documents, and many, if not all external-facing workloads and partner- and customer-facing workloads are running on cloud-hosted SharePoint data center farms?

How will companies that provide software using today’s pricing models convert to the new realities? How will existing per-transaction models translate to SharePoint? Will they? Of course they will, it’s just a matter of which companies are going to lead the others there.

What will your new SharePoint pricing model be? What will the “new class of customers,” that your business/service will attract, consist of?

How many Hosting providers will choose to provide custom versions of SharePoint – versions that tie together multiple ISV Solutions and offer a compound solution that slays the competition?

“Changing your pricing changes your story.”

The line between consumers and business is blurring. Just as the iPhone is changing the way that consumers use mobile phones, and at the same time is meeting almost all of the needs of enterprise users, the “class of customers” that a SharePoint–oriented ISV or service provider should be focusing on is also changing. As we (SharePoint service providers) learn lessons from the consumer world and start to mix it up, it’s going to be fun.

Remember, “It CAN Be Done.”


Comments (4)

  1. Mark Rhodes says:

    Very interesting post Owen.  As a hosting provider I can say that this shift in focus is already starting to happen.

    We are starting to see small business (10-30 users) adopt MOSS portals as a CMS for their website, as well as a intranet.  All hosted outside of their own business.  Obviously a small business like this could not afford a full time employee to install and maintain their MOSS installation.

    Surprisingly this pricing model seems to cater to Enterprise business as well, as we have seen enterprises who prefer the low-risk and low-cost approach of a hosted sharepoint installation to having to recruit and support from in house.

    Mark

  2. Hi Owen and Mark (Rhodes).

    Do you have any suggestions on how a subscription based pricing model would work for a Sharepoint ISV who develops a enterprise level sharepoint solution but doesn’t want to provide the sharepoint hosting?

    We are developing a set of sharepoint webparts that mimic our existing bespoke product, FoundationFootprint, an enterprise level carbon footprinting solution.

    We track the carbon footprint of cities and large multi national companies and our current pricing model is a relatively simple $Xk per month depending on company size.

    But then add WSS3 into the mix and then MOSS and it becomes a little more complicated.

    Are there any examples of other companies doing this already?

    Thanks in advance.

    Chris

  3. Anand Mohan says:

    The challenge with MOSS comes in when the content storage is more than 50 or 60 GB. Also, to control performance, it seems that the document library folder is limited to 4000 documents. Does this restrict MOSS only to small businesses?

  4. owenallen says:

    Hi Anand,

    I’m not sure where you’re hearing about the sotrage limitation.  Tell me more about that.  The max. storage limitation is the size of a SQL Server database.  And you can have multiple SQL Server databases associated with your SharePoint farm.  The best practice that I communicate to folks is that the size of your SQL Server database (aka the SharePoint content database) should be based on operational windows of your backup and restore devices, so that you can comfortably backup/restore your farm if necessary.

    As for the document library item limits, the limitation is not with the storage and management of large quantities of items, the limitation is on the presentation side.  Up to a million items has been tested and can be stored in a document library.  

    The recommendation for the presentation limitation is to limit any view, or collection of returned items, to aproximately 2,000 items.  This number will vary depending on your content types and column definitions.  So, creating multiple views, to filter the items in a large list, is a good idea, and changing the dfault view to one other than "All Items" is a good idea.

    MOSS is certainly not restricted to only small businesses!  :-)   Check http://www.microsoft.com/casestudies for some great examples!