Simplicity and Transparency: Effective Pricing and Licensing Models for Enterprise Solutions


Simplicity and Transparency: Effective Pricing and Licensing Models for Enterprise Solutions

by Jake Bittner, Qlarion President and CEO

This week MicroStrategy announced a new pricing and licensing model that provides customers with more simplicity and transparency when purchasing Microstategy software. This model is a refreshing new approach that will enable customers to derive even more value from Microstrategy’s software and drive growth for the company.

Most enterprise software companies use messy pricing and licensing models that confuse customers, complicate the buying process, and eventually erode customers’ trust. Why are these convoluted structures so common? Typically, the pricing and licensing models are designed by corporate finance and marketing teams that are focused on internal issues, like ease of accounting and commission, rather than more important external issues, like customer experience and value to the customer. While no company would openly disagree that customer satisfaction and success is the most important indicator of long-term company performance, the value to the customer often gets sidelined during the internal development of pricing models.

I witnessed this very situation with one of my previous employers. The director in charge of corporate pricing unveiled a master plan to separate each and every product feature into its own independently-priced item. His reasoning: “We need to do this so we know what features customers are willing to pay for, so we can charge more for those features in the future.” His plan to drive sales was to take an already difficult process and add a long and painful pricing exercise to confuse customers even more. Predictably, this plan caused massive customer and salesperson frustration, resulting in lower sales. The structure was eventually scrapped, but it was allowed to go on for far too long and damaged customer relationships.

When buying enterprise software, customers want to know that they are getting the capabilities they need (simplified packaging) and how much those capabilities will cost (transparent pricing). When customers are confused, their trust erodes and their success is at risk.

Unfortunately, pricing model confusion has become the norm in enterprise software, which is why an announcement like this is so refreshing.

MicroStrategy’s new model packages and prices their capabilities in a clear, straight-forward way that will create value for both new and existing customers and serve as a foundation of customer trust and success in the future.