SOHO and SMB Cloud Storage Recommendations
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HUH, I can't say that I've seen this type of curve before. I'm more accustomed to the AV curve.
5 users: $25/user
10 users: $23/user
100 users: $21/userIt seems odd to start out low, ramp up and then spike back down.
I suppose I could see something at or near free for super small, but I would expect (clearly my expectations are wrong) the prices to start high for 10+ users, but only go down as the number of users goes up.
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@scottalanmiller Are you pulling these pricing scales directly from their websites?
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@Dashrender said:
HUH, I can't say that I've seen this type of curve before. I'm more accustomed to the AV curve.
....
It seems odd to start out low, ramp up and then spike back down.I suppose I could see something at or near free for super small, but I would expect (clearly my expectations are wrong) the prices to start high for 10+ users, but only go down as the number of users goes up.
I don't think that it is odd at all when dealing with business applications where the use or features ramp up in a similar way. With O365 we already talked about how at a certain size the features actually change and while some organizations might choose to not leverage them, more is being offered and delivered to them and they also have different use cases making it make total sense why they would pay more.
All of this software is similar. At small sizes they just are not likely to use the software in the same, intensive way, that larger companies are. This means that the company providing the service has less to do to assist them and has to critically attract and retain small companies as they grow. So lowering the price for companies that can only barely use the product and ramping up as it becomes useful until the value of scale takes over and brings the per user price back down.
The thing is that there are two or three equations affecting the pricing curve with scale being only one. Another is features and the other is usefulness or intensity of use. Look at Jira as an example. A one person shop has zero use for it. A ten person shop can only justify the effort of using it if it is really cheap. But at 50 users, it's super valuable and will be used heavily and is worth a lot more per user.
So when looking at the factors involved, I think that the curve is incredibly sensible for many kinds of software. On the scale side you start to get companies rolling it out to "everyone", even those that won't use it just to make licensing easier, for example.
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@Dashrender said:
HUH, I can't say that I've seen this type of curve before. I'm more accustomed to the AV curve.
5 users: $25/user
10 users: $23/user
100 users: $21/userIt seems odd to start out low, ramp up and then spike back down.
I suppose I could see something at or near free for super small, but I would expect (clearly my expectations are wrong) the prices to start high for 10+ users, but only go down as the number of users goes up.
No, your expectations are spot on. In all the examples we've discussed that is how it works : cheap for 10 users or less, then a hike, then getting cheaper. The only exception is Microsoft. Except in Scott's world where it is number of employees that matters not number of users.
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@Carnival-Boy said:
The only exception is Microsoft. Except in Scott's world where it is number of employees that matters not number of users.
The model is consistent, you are grasping at making this be about me when every example is consistent in the curve of how it applies to sizes of organizations. You asked for examples, you got them, but you are determined that whatever is provided isn't good enough.
Obviously Microsoft is wrong because I see logic in it. There is a direct correlation between me seeing something as obviously logical and it being wrong. I should have realized.
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@Carnival-Boy said:
No, your expectations are spot on.
Because they agree with your personal desires? Did you find no logic in my explanation of why it would be this way? If you found it illogical, why have you decided not to point out where it was wrong. If it was logical, why do you have these illogical expectations?
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@Carnival-Boy said:
Except in Scott's world...So his examples didn't count because you disagree with the logic? Huh?
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Pricing that had that central hump as you've shown, that appears to be there either because the customer will be stressing the system more as they reach that middle hump area, and the stress per sold user goes down afterword does make business sense, but still seems odd to me.
Pricing that humps because the vendor adds features as the hump goes up is being deceptive in their offerings in a price list as Scott has presented it. Instead of realizing I'm getting extra stuff (do I even want it, Access for example) the simple list looks like just because I'm a big boy means I get punished. If the offerings change, then the list should be decidedly divorced from the SMB area.
I'll just say instead of it being illogical, I just don't like it.
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@Dashrender said:
I'll just say instead of it being illogical, I just don't like it.
That's fine but.... no one likes falling into the "high cost" tiers for products. But it happens. It's where the products probably carry the most value, which is probably also why you want it.
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@Dashrender said:
Pricing that humps because the vendor adds features as the hump goes up is being deceptive in their offerings in a price list as Scott has presented it. Instead of realizing I'm getting extra stuff (do I even want it, Access for example) the simple list looks like just because I'm a big boy means I get punished.
So you feel that it is deceptive in a non-useful way to the vendor? I'm unsure what you feel is deceptive here. Where do you feel there is deception?
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@Dashrender said:
Pricing that had that central hump as you've shown, that appears to be there either because the customer will be stressing the system more as they reach that middle hump area, and the stress per sold user goes down afterword does make business sense, but still seems odd to me.
What makes it odd? If someone rents a car but barely drives it and someone else rents a car and drives it a lot... you could easily bill by:
- Number of drivers
- Number of cars
- Number of miles
Only one of these maps what costs the vendor money to use: the number of miles driven. So it would often make sense to bill by wear and tear or a combination (car + mileage as the car is out of service for that time.) If you are likely to stress the system, why would it be odd to get charged more for doing so?
What's the factor that makes it seem odd?
Also, you are in the position of needing the product the most and having the least leverage to push the cost down. So just normal market forces alone could push the price up regardless of use or features.
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@art_of_shred said:
@Carnival-Boy said:
Except in Scott's world...So his examples didn't count because you disagree with the logic? Huh?
I've quoted my original post before but I will do it again:
"Examples? I can't think of any. And I don't mean examples where 10 users or less are dirt cheap or free. I mean where 200 users is cheaper than 300 or similar break points."Dash said he expected it for less than 10 users and said he was wrong and I pointed out he was right. I'm now accused of moving the goalposts. Scott's examples don't count because they aren't for more than 10 users. I don't know how else I can explain myself.
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@Carnival-Boy said:
Scott's examples don't count because they aren't for more than 10 users. I don't know how else I can explain myself.
No, but they are for companies of the same sizes as the price points in the Microsoft post. Are you saying that Microsoft is only "wrong" because of the exact number of users in question and not because of the general theory? If MS did it at some specific magical size of users (rather than size of company) that then it would be okay but you specifically object to MS matching the company size of their contemporary vendors rather than the exact number of users even though the number of users are unique to MS' product since few, if any, other products would be purchased so broadly in a "for every user" way?
If those products match MS in number of users exactly, it would be worse examples rather than better. But the point isn't that every vendor have the same needs for the same size organization but that the idea that small is cheap, middle is expensive and at scale it becomes cheaper again is what I'm arguing as logical.
If you have a specific issue with 300 as a number, I have no idea how to continue here and I'll happily admit that whatever you feel about the number 300 is true. I don't understand in the least how absolute numbers make this not make sense, that seems wholly illogical that MS should be held to an arbitrary standard that no one else can even express. But I'll leave this here. What I was discussing was, I felt, a good, logical understanding that we should all have about the factors that potentially drive pricing. Solid numbers like 300 do not play in there and I can't speak to that.
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@Carnival-Boy said:
@art_of_shred said:
@Carnival-Boy said:
Except in Scott's world...So his examples didn't count because you disagree with the logic? Huh?
I've quoted my original post before but I will do it again:
"Examples? I can't think of any. And I don't mean examples where 10 users or less are dirt cheap or free. I mean where 200 users is cheaper than 300 or similar break points."Dash said he expected it for less than 10 users and said he was wrong and I pointed out he was right. I'm now accused of moving the goalposts. Scott's examples don't count because they aren't for more than 10 users. I don't know how else I can explain myself.
eh? not for more than 10 users? O365 example is clearly more than 10 users. Though I'll admit it took a bit for me to understand what was going on with the comparison of Atlassian, and Freshbooks.
The reason you need to look at the soft number of the number of employees is that the number of users of Atlassian and Freshbooks would rarely ever been the actual number of users in the company, but instead a subset that supports that greater whole. So 1 user using Freshbooks would be like 10+ users using O365, 2 users using Freshbooks might be more like 100 users using O365, etc.
So I see how the added load makes sense for the per user charge having a bell curve.
Why is it weird - because we as non business people are indoctrinated with examples where a single of something is the most expensive unit price, and multiples are always less at the unit price. I'd love for you to show an example of the bell pricing curve in the consumer world.
continuing on the weirdness - I'm a more typical person as well as an IT person, so sure I can be shown/made to understand the value in charging me more for this bell curved pricing, but that doesn't mean my indoctrination isn't still there every moment telling me it's just weird.
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@Dashrender aka, you've been taught that buying in bulk makes a lower per-unit cost. The trouble here is that you don't really get the choice as a consumer in this arena. If you want to buy 5 lbs. of grapes at the grocery store because they're less per pound, that's a reasonable option. You aren't going to buy 2,000 licenses of O365 when you have 500 users, to save a buck. So, if they control the pricing, you kind of get what you get, according to your size. Not much to bargain with there.
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Those solid numbers are a killer to many of use. Look at NiNite. 100 devices is X, but if you have 110, you're screwed paying for the 250 device level.
It's these kinds of mega leaps that I find the most frustrating. Tons of people find themselves in that sweet spot between 100 and 250. Of course the math can be done and typically in these types of situations show that if you are 85-90% the way to the next price break, that it's often the same or better to buy yourself up to the next price level.
I've down this for years when I supported 80 users. It was often cheaper to purchase 100 licenses of something at the 100 price level than it was to buy 80 at the 50 price level.
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@Dashrender said:
I'd love for you to show an example of the bell pricing curve in the consumer world.
That would be hard to find because generally the only factor in consumer products is quantity. You don't get network effects, normally, nor do you need special features or have extra usage scenarios based on number of participants.
You do find the inverse with services like Netflix where one user is $12/u, two are $6, three are $5, four are $4 and then five are $6 and six are $5.
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@Dashrender said:
Those solid numbers are a killer to many of use. Look at NiNite. 100 devices is X, but if you have 110, you're screwed paying for the 250 device level.
It's these kinds of mega leaps that I find the most frustrating. Tons of people find themselves in that sweet spot between 100 and 250. Of course the math can be done and typically in these types of situations show that if you are 85-90% the way to the next price break, that it's often the same or better to buy yourself up to the next price level.
I've down this for years when I supported 80 users. It was often cheaper to purchase 100 licenses of something at the 100 price level than it was to buy 80 at the 50 price level.
I agree, mega leaps suck big time. They only exist to make pricing and licensing easy not to make pricing sense. JetBrains and Atlassian did that too, if you look.
Actually of all of these, MS is by a huge degree the best because they never charge by anything but per user. The scales are very fluid.
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@scottalanmiller said:
@Dashrender said:
I'd love for you to show an example of the bell pricing curve in the consumer world.
That would be hard to find because generally the only factor in consumer products is quantity. You don't get network effects, normally, nor do you need special features or have extra usage scenarios based on number of participants.
You do find the inverse with services like Netflix where one user is $12/u, two are $6, three are $5, four are $4 and then five are $6 and six are $5.
Exactly, but just like the other examples, the higher the number of users, the greater the demand on resources until you reach a certain level, let's say Netflix for example, after 4 people, you probably end up seeing more people in that same home watching the same thing (same device) so the 5 person while you may have an account for them, they are probably not actually using it very much.
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@Dashrender I get what you're saying there, and yeah, sometimes eating a few unused licenses for the better bottom line works. Once the plateaus are in larger increments, that gets a lot more difficult to do.
