I've reached a mini-milestone with the local install, source included version of Easy Assets .NET and now I have started thinking ahead to how I should price this software. Pricing is perhaps the most difficult thing for an ISV to do. On one hand you want to be fair and not overcharge for your product, on the other hand you do not want to price too low and lose a bunch of money either.
I've read articles by Eric Sink, and for the most part I find his advice useful and thought provoking. For those of you who have not read his Product Pricing Primer, I suggest you do it!
Back to Easy Assets .NET. I have to come up with a logical, fair, and profitable way to market and sell this product. Looking at my competitors and options I have drawn the following conclusions:
- There are some very ugly, clunky Fixed Asset Management (FAM) programs out there that sell for thousands of dollars. Some products I've found I can't believe how they are in business still.
- It seems that the range for FAM software of minimal quality standards starts around $500 and you can spend upwards of $20,000 if you're so inclined. Web enabled solutions I haven't seen much under $1500.
- There is a push towards web enabling asset management software, so I'm ahead of the curve.
- I have not found any commercial source included FAM products. I'm sure there has to be some out there somewhere, but they aren't easy to find.
With all this in mind, I feel like I'm in a pretty good position here. By offering my product source-included I fall into a very nice niche for companies that want to implement a FAM system and want to be able to customize it to meet their specific business needs. The rather broad range of prices for FAM software means that I can be agressive on price and still be able to make a profit.
Now we add the source included twist. When a product such as mine is source included, there is a significant opportunity to sell maintenance agreements and consulting services to help your customers tailor the software to their needs. Many open source companies like RedHat Linux make most of their money off of service agreements and almost no money off the software itself. I think this a solid strategy if you are targeting enterprise (medium to large) customers. Easy Assets .NET, however, is more targeted towards the small and medium businesses who can benefit from FAM but don't want to spend a fortune.
Add to all this the substantial research by Gartner and others that show the cost savings that proper asset management can give your company. I've seen statistics that show just for IT you can save upwards of $300 per user with proper license and asset tracking. Avoiding illegal licensing is becoming increasingly important. This is a great selling point for the software since I can point to lots of research showing cost savings that far exceed what I will charge.
So how much will I charge? I'm thinking somewhere in the $800-$1,200 range with yearly maintenance/service plans available. If your company has expert coders, you won't need the maintenance/service. It's more for companies that don't have a strong IT staff level. All purchases will include unlimited email support and 1 year of free downloads of new versions of the source code.
Time will tell if my gut instinct on this price level is correct!