Posts Tagged ‘pricing’

Microsoft Steeply Raising Enterprise Licensing Fees

December 3rd, 2012 12:01 admin View Comments


hypnosec writes “Microsoft is trying to make up for below expected earnings following Windows 8′s and Surface RT’s lack luster adoption rates by increasing the prices of its products between 8 and 400 per cent. Trying to make more out of its enterprise customers who are tied under its Software Assurance payment model, Microsoft has increased user CALs pricing 15 per cent; SharePoint 2013 pricing by 38 per cent; Lync Server 2013 pricing by 400 per cent; and Project 2013 Server CAL by 21 per cent.”

Source: Microsoft Steeply Raising Enterprise Licensing Fees

Is Microsoft’s Price Model For the Surface Justifiable?

October 17th, 2012 10:28 admin View Comments


colinneagle writes “A blog post contending that Microsoft’s decision to match Apple’s iPad pricing on its Surface tablet will hurt its chances in the market has brought out some negative comments from readers who seem to like the Surface tablet. I was kind of surprised by this, as I and other bloggers seem to agree that making the fully keyboard-equipped Surface tablet roughly $120 more expensive than the iPad kind of negates the purpose — to build steam by appealing to those in the market for a cheaper tablet. Also, I’ve yet to see an argument that justifies pricing the Surface competitively with the iPad, so I figured I would bring the question to Slashdot: Is Microsoft’s pricing for the Surface tablet justified?”

Source: Is Microsoft’s Price Model For the Surface Justifiable?

Microsoft Surface Pricing Goes Toe-to-Toe With Apple iPad

October 16th, 2012 10:43 admin View Comments


Nerval’s Lobster writes “Microsoft has finally revealed the pricing of its upcoming Surface tablet to a small group of journalists, including Time’s Harry McCracken, who wrote in an Oct. 16 posting that the device’s 32GB version will retail for $499 (or $599 with the flexible keyboard cover) and the 64GB one for $699 (cover included). Preorders will apparently begin by midday Oct. 16. Microsoft unveiled Surface over the summer but kept the pricing a secret until now. That information vacuum led some to hope against hope that Microsoft would attempt something radical and price Surface extraordinarily low—$199, perhaps—in an attempt to undercut Apple’s iPad. While that didn’t happen, Surface at least matches its biggest rival’s low- and high-end price points. The WiFi-only, 16GB version of the iPad retails for $499, while the WiFi-only, 64GB version costs $699 (iPads with a cellular connection cost a bit more).” A related article at BGR explains why the Surface is Microsoft’s latest attempt to re-invent itself.

Source: Microsoft Surface Pricing Goes Toe-to-Toe With Apple iPad

Google Patents Profit-Maximizing Dynamic Pricing

September 6th, 2012 09:20 admin View Comments


theodp writes “A newly-granted Google patent on Dynamic Pricing of Electronic Content describes how information gleaned from your search history and social networking activity can be used against you by providing tell-tale clues for your propensity to pay jacked-up prices to ‘reconsume’ electronic content, such as ‘watching a video recording, reading an electronic book, playing a game, or listening to an audio recording.’ The patent is illustrated with drawings showing how some individuals can be convinced to pay 4x what others will be charged for the same item. From the patent: ‘According to one innovative aspect of the subject matter described by this specification, a system may use this information to tailor the price that is offered to the particular user to repurchase the particular item of electronic content. By not applying discounts for users that may, in relation to a typical user, be more inclined to repurchase a particular product, profits may increase.’ Hey, wasn’t this kind of dynamic pricing once considered evil?”

Source: Google Patents Profit-Maximizing Dynamic Pricing

VMware Back-Pedals On vRAM Scheme, Back To Per-Core Pricing

August 28th, 2012 08:31 admin View Comments


Last year VMware introduced a complex pricing scheme based on the size of the memory associated with each virtual machine instance. New CEO Pat Gelsinger announced this week that this system (which he described as “a four letter word”) has been deprecated, and VMware is back to more straightforwardly charging per physical processor core. Adds reader hypnosec: “Pricing hasn’t been announced yet but a file [PDF] present on VMware’s site does give an indication about the new pricing.”

Source: VMware Back-Pedals On vRAM Scheme, Back To Per-Core Pricing

VMware Back-Pedals On vRAM Scheme, Back To Per-Socket Pricing

August 28th, 2012 08:31 admin View Comments


Last year VMware introduced a complex pricing scheme based on the size of the memory associated with each virtual machine instance. New CEO Pat Gelsinger announced this week that this system (which he described as “a four letter word”) has been deprecated, and VMware is back to more straightforwardly charging per physical processor. Adds reader hypnosec: “Pricing hasn’t been announced yet but a file [PDF] present on VMware’s site does give an indication about the new pricing.”
Update: 08/28 17:18 GMT by S : Updated the headline and summary to reflect that the price is per processor, not per core.

Source: VMware Back-Pedals On vRAM Scheme, Back To Per-Socket Pricing

Keeping Your Cloud Costs Under Control

July 2nd, 2012 07:40 admin View Comments


Tech writer David Strom offer this in-depth article on keeping your cloud costs suppressed. He writes: “Some cloud providers don’t make pricing available until you sign up for their service. Others hide pricing schedules behind complex formulae. And therein lies the challenge for an IT manager who wants to try to find the best-priced cloud: you have to read the fine print, and make sure you understand what is billable, how it is measured and priced, and when the meter starts (and stops) running. Let’s look at where you can get more precise cost information, as well as examine a few of the growing number of third-party comparison services that can help you get more control over your cloud costs.”

Source: Keeping Your Cloud Costs Under Control

Facebook Adds App Subscription Payment Model

June 19th, 2012 06:44 admin View Comments

After its disappointing IPO last month cast doubts on the company’s ability to monetize its vast user base, Facebook today announced a subsciption pricing model – potentially adding a recurring source of revenue for itself – and for developers of Facebook apps.

The new service, announced on Facebook’s Developer Blog this afternoon, will launch in July.

Subscriptions will bring Facebook app producers a recurring revenue stream that will ideally normalize an app’s overall revenue stream, instead of depending on the spiky ups and downs of one-time payments for virtual items. The new system will be launched on both the Web and mobile versions of Facebook.

Altimeter Group analyst Chris Silva sees subscription-based pricing as a real value for app developers to offer to users. “A subscription that buys me access to specialized content rather than a virtual item with maybe a more fungible value is a more successful way for developers to bring in revenue,” Silva said today. Specialized content is more of a value-add to users, he believes.

Subscriptions have already been tested by popular game producer Zynga for its FarmVille and Pioneer Trail games. Kixeye, a smaller game developer, will sell exclusive items in its Backyard Monsters game for a $9.95 monthly fee – with Facebook picking up 30% of every subscription.

Local Currency Pricing

At the same time, Facebook is also moving away from its Credits payment system to pricing that supports local currencies.

Prashant Fuloria “By supporting pricing in local currency, we hope to simplify the purchase experience, give you more flexibility, and make it easier to reach a global audience of Facebook users who want a way to pay for your apps and games in their local currency. With local pricing, you will be able to set more granular and consistent prices for non-US users and price the same item differently on a market-by-market basis,” Facebook Product Management Director Prashant Fuloria told developers in today’s blog.

That last point contains the real gem in the move: setting market-to-market pricing will let app developers maximize their revenue by lowering prices in markets where their items might be too expensive, or charge more if the market can bear it.

The new subscription program will support local currencies, and apps that use the Credits system will be flipped over to local currencies automatically.

“We hope new features like subscriptions and local currency pricing help you monetize more effectively and reach more users globally,” Fuloria added.

Generating alternate and optimized revenue streams is pretty much Job #1 for Facebook after the lukewarm reception investors gave its IPO this month. And for Fuloria, it’s personal – this is why he was hired away from Google in 2009.

The Mobile Conundrum

On the mobile version of Facebook, there are no ads and Facebook is seeing phenomenal growth. A recent report revealed that nearly a third of Facebook’s users in India access Facebook exclusively through mobile devices. The local currency and subscription changes will make it much easier for developers obtain revenue from mobile customers in developing countries.

That’s critical for Facebook’s future: Facebook’s mobile platform “must be front and center with the massive growth in mobile users in the US – and more so, abroad,” wrote Silva earlier this year. “Facebook should expect the device, be it feature phone, smartphone or tablet, to be the central interaction point for users. It’s going to have to adjust its monetization model to match if it wants happy investors because mobile matters.”

Today’s announcement is a fulfillment of Silva’s prediction: an adjustment of Facebook’s monetization model to start getting stronger and more predictable revenue streams from mobile users, and those in developing countries. And it won’t hurt the revenue channels from the rest of Facebook’s users, either.

Source: Facebook Adds App Subscription Payment Model

Comcast To Remove Data Cap, Implement Tiered Pricing

May 17th, 2012 05:11 admin View Comments

The Internet

StikyPad writes “Comcast is reportedly removing its oft-maligned 250GB data cap, but don’t get too excited. In what appears to be an effort to capitalize on Nielsen’s Law, the Internet’s version of Moore’s Law, Comcast is introducing tiered data pricing. The plan is to include 300GB with the existing price of service, and charge $10 for every 50GB over that limit. As with current policy, Xfinity On Demand traffic will not count against data usage, which Comcast asserts is because the traffic is internal, not from the larger Internet. There has, however, been no indication that the same exemption would apply to any other internal traffic. AT&T and Time Warner have tried unsuccessfully to implement tiered pricing in the past, meeting with strong push back from customers and lawmakers alike. With people now accustomed to, if not comfortable with, tiered data plans on their smartphones, will the public be more receptive to tiered pricing on their wired Internet connections as well, or will they once again balk at a perceived bilking?”

Source: Comcast To Remove Data Cap, Implement Tiered Pricing

6 Startup Lessons From the Complexity of Cell Phones

May 6th, 2012 05:00 admin View Comments


Back when we first started using PCs, we all wished that they would become as easy to use as a telephone. Well, we got our wish, not because computers got easier to use but because phones are now so darn complicated. If we examine the process and story by which phones became so complex, we can uncover a variety of lessons that startups can learn – and hopefully avoid.

The Phone’s Transformation

First, the landline is becoming extinct. As we moved to cell phones, it became easier and more convenient for everyone to have their own number. This is true for both home and office lines: I gave up both a long time ago.

Minutes became ultra cheap, thanks to voice over IP telephony. Remember when you had to think about calling someone “long distance?” Now toll calls are pretty much a thing of the past. And the whole notion of area codes also got more complex. Forget traveling; cell phone users often keep their original area codes when they move to another city, so you can’t tell where you are calling anymore. For example, I still have a Los Angeles “310″ area code even though I have lived in the Midwest for several years now. In some countries, cell phones have their own area code, so all you can tell is that you are calling a mobile phone.

Then cell phones became more than just phones: About half of us now use them for surfing the Web or running apps, and navigating the typical cell plan now requires a degree in accounting. When we get a new plan, we have to figure out prices for our data and texting plans, and how many actual voice minutes we’ll need – that is, if we still use phones to make actual phone calls.

And then, of course, there’s the task of finding the right phone to purchase. Computers now seem a lot easier by comparison.

Lessons for Startups

So what, you say? Modern life is complex; deal with it.

But startups can take away some important lessons from this thought experiment:

  1. Don’t assume that technology is understandable by everyone. Consider the context in which an item is going to be used, and its intended audience. This is Marketing 101, but still. Just because brilliant engineers from Stanford or MIT design your product doesn’t mean that everyone who will actually use it has that kind of training.
  2. Simplify your pricing and eliminate degrees of freedom. I once had a client in the network storage business. Its pricing sheet comprised not one but a series of Excel spreadsheets. Since pricing had six different metrics, it could take the better part of an hour to come up with a final price for customers. It shouldn’t be that hard. Take Thoreau’s maxim (“Simplify, simplify, simplify!”) to heart, and make your pricing easier to understand.
  3. Align your product with your domain name. How often do companies start with one name and end up having to change it because their major brand got more popular than the name of their company?
  4. Don’t penalize your best customers. When you run over your cellular airtime minutes allotment, you get hit with overage charges. It shouldn’t take an act of Congress to convince companies of the folly of this tactic. Stop trying to extract more money from your best customers, and instead, make it easier to do business with your company.
  5. There is nothing wrong with having subscription-based pricing, but make it clear how a customer can end a contract without paying a hefty penalty.
  6. Don’t make your product instantly obsolete. This issue is huge for cell phone makers right now, but every time you buy a laptop, the manufacturer instantly seems to introduce something lighter with a better screen.

As you can see, there is a lot that startups can learn from the saga of cellular phones’ growing complexity. It does make you long for those days when we could just pick up that black model and ask the operator to dial a number for us. As Lily Tomlin’s “Ernestine” would say, “I work for the phone company. It isn’t my job to think.”

Source: 6 Startup Lessons From the Complexity of Cell Phones