Yesterday was a tough day for me.  You see, this past Saturday, all of a sudden I got this feeling that we were going the wrong direction with our OnTime 2007 pricing.  If you read my posts, you might recall that I announced OnTime 2007 pricing and requested feedback a couple of months ago.  The feedback we received from customers was essentially a shrug, as in, “looks ok to me.”  The goal of our new pricing, with 3 different editions (Standard, Pro & Enterprise) was to make the product more appealing to customers with varying needs and varying sizes.  But this was actually making things somewhat complicated.  Now customers would have to decide which edition is right for them with price being a motivating factor to possibly choose the wrong product for their needs.  So we were adding a level of complexity with 3 different editions of our product and all we got was a shrug, no enthusiasm.  We weren't going after a shrug.

I couldn't help thinking that maybe we're going about it all wrong.  So yesterday, I had several OnTime 2007 pricing meetings with our sales team, customer relations and marketing.  Sure enough, everybody was uncomfortable with our new pricing.  They sort of liked it, but they knew they were going to have to do a lot of explaining to customers.  Explaining which edition is right for which customer and possibly getting it wrong.  Nobody thought that the price was too high, but there was a consensus that the pricing was a bit confusing.  We didn't want to put customers in a position to possibly choose the wrong version of the product and have a poor user experience.  Every feature we build into OnTime is designed with care and we go through significant effort to make sure all such features are useful to users.  To limit these features based on which edition the user picks was unsettling.

So yesterday, we decided we needed a simplified pricing model that was fair to all customers.  We re-wrote our goals to make sure we're going to meet every objective:

• It must be simple
• The software experience should be the same for all users
• There has to be a low barrier to entry for small teams who are price sensitive
• We must be able to address the needs of larger enterprises with the attention and priority that they require

So, here's what we've come up with:

• Installed
• 1 Edition, OnTime 2007 (no more Standard, Professional and Enterprise)
• All Users can Use Web, Windows or VS.NET client types (all licenses are essentially “Mixed-Mode“)
• Free Single-User License (just like before)
• 5-User Starter Pack for $495 (keeping the barrier to entry low for small teams)
• $199 for Additional Users (same price for everyone, all features included - this is huge as it means no price increase with tons of new functionality)
• Hosted
• OnTime 2007 Web Edition
• Free Single-User License (this is new for hosted)
• 5-User Starter Pack for $49 per month
• $19 per user per month for additional users

We're also reducing standard maintenance to 25%.  How cool is that?  The overall effect of our new pricing is to provide significantly higher product functionality at the same price. Oh, and one more thing...we're dropping the $1,000 upgrade fee for Small Team Edition customers who want to add their 11th user.

To address the needs of larger enterprise customers who need a higher level of attention, training and ongoing services, we've also added a Premier Maintenance Pack.

I'm really excited about the new pricing and the first indication that we've nailed it is that internally, everyone is excited.  No more shrugs!  We actually have some enthusiasm around the new pricing!

I've summarized the pricing model in the chart below: