Free is the best future price. If you follow my blog, you probably had a chance to read this post three years ago. The world of software is very different nowadays. Trends such as open source, software as a services (SaaS), freemium – this is only a short list of new business models. Earlier this year, I had a chance to run panel discussion – The Future of PLM business models at PLM Innovation conference in Munich. You can take a look on my slides here.
One of the interesting trends these days is a shift from ownership to share and services. It happens in different fields. My best non-software example is Michelin selling miles instead of tires and Zipcar share-car service.
The following blog post by Kenesto caught my attention couple of days ago – How to price PLM in the cloud? Kenesto believes to innovate not only in cloud process management technologies, but also in the way this technology will be sold.
We believe that the cloud encourages changes to the way process automation software can — and should be — priced. So, we started from a clean sheet of paper when we decided how to price Kenesto. We don’t have legacy “seats” to preserve or boxes to push. We’ve not only changed the way process automation software works and is delivered, we also hope we have changed (for the better) the way people buy it.
In a nutshell, Kenesto is proposing companies to pay per bundle of processes. Pricing plans are available from 100 processes/month and up to 8000 processes/month. This process model made me think a bit differently about PLM pricing and process management, specifically. Do you want me to sell processes “by gallons” as a gas? My expectation that process management software will streamline processes in the organization. What does it mean? Improve processes doesn’t say much if company has more processes or fewer processes. Who is responsible to set “valid amount of processes” for any organization? Another question that this model generated is how to make software cost predictable. Imaging tomorrow engineer cannot open ECO because of process limit. Does it sound crazy? Who knows…
What is my conclusion? The idea of PLMometer with customer credit card connected to processes counter is an interesting one. It sounds similar to Google pay-per-click model. You can print money based on the amount of processes used by engineering and other people in the organization. Pay per click worked for Google. Will it work for Kenesto? – a good question to ask. Just my thoughts…