SOHO and SMB Cloud Storage Recommendations
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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.
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@art_of_shred said:
@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.
So what are you saying? The plateaus are there to screw us? Because they can?
Now I haven't seen that be the case in O365, other than the 300 user issue. I guess that gets back to the OP. He's unhappy because MS caps the non E plans at 300 users, instead forcing them to the more expensive E series plans. But once you're over 300, everyone is on the same playing field until you get into an EA.
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@Dashrender said:
So what are you saying? The plateaus are there to screw us? Because they can?
Obviously. The entire concept of the pricing exists to charge as much as customers will pay while not incurring extra cost. It's just normal demand pricing. The vendor charges at will, customers buy at will. If the customers continue to buy, they have demonstrated to the vendor that the pricing is acceptable which encourages the vendor to maintain or raise prices.
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@Dashrender said:
Now I haven't seen that be the case in O365, other than the 300 user issue. I guess that gets back to the OP. He's unhappy because MS caps the non E plans at 300 users, instead forcing them to the more expensive E series plans. But once you're over 300, everyone is on the same playing field until you get into an EA.
Everyone is on the same playing field, always - because customers can choose to manipulate their number of seats as they see fit. They always have the option of hiring fewer people, switching which tool sets that they use, only rolling out O365 to certain users. It's the same field and customers choose which tiers to buy at.
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LOL - Yup.. and all we can do is piss and moan about it when we find ourselves at the 110 make when the next plateau is at 250
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@Dashrender said:
Now I haven't seen that be the case in O365, other than the 300 user issue.
But that is where you are seeing it. The customers for whom they tend to be the most "stuck" on the product - smaller companies have less money and are more likely to be dissuaded into going elsewhere because they can't leverage the full value. And larger customers are more likely to have better business decision making skills. MS has the highest cost in the organizations most likely to be "deploy by mandate" rather than evaluating specific needs.
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@Dashrender said:
LOL - Yup.. and all we can do is piss and moan about it when we find ourselves at the 110 make when the next plateau is at 250
Not really, only if management deems this to be non-negotiable. But normally you are free to stop using the product or find an alternative. The vendor needs to carefully price themselves to remain competitive and sensible everywhere within the plateaus or they risk encouraging the customers to pay to move to a different product.
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@scottalanmiller said:
@Dashrender said:
Now I haven't seen that be the case in O365, other than the 300 user issue. I guess that gets back to the OP. He's unhappy because MS caps the non E plans at 300 users, instead forcing them to the more expensive E series plans. But once you're over 300, everyone is on the same playing field until you get into an EA.
Everyone is on the same playing field, always - because customers can choose to manipulate their number of seats as they see fit. They always have the option of hiring fewer people, switching which tool sets that they use, only rolling out O365 to certain users. It's the same field and customers choose which tiers to buy at.
I don't agree. If a 10,000 person company is deploying O365, I suppose they could choose to only roll it out to 290 users so they could get that price point, but that really seems silly.
But moving this back to the company in the 300 user range, I'm right back to the plateau problem.
Today my company is 280 users and I'm paying $12.50/u and we are content with the services. But I get a spike in business that takes me to 350 user.. suddenly I have to start paying $20/u or $2100/month more (just for the 280 old users) because of the business growth, (while assuming I don't need/want any of the additional services offered.Do I feel there is a point that MS should force people to the higher plan? Frankly, in this case NO. I think that bell curve has already been reached and is back on the down slope at 300 users for actual cost per user.
