On Feb. 21, QlikTech published its price list for the first time. The company, founded in 1993 and known for its business intelligence (BI)
“Much like we don’t hide the feature set and we don’t hide what the software looks like, we don’t see a reason to hide the price,” said Jeff Boehm, vice president of product marketing for QlikTech, based in Radnor, Pa.
Twitter chatter on QlikTech
QlikTech isn’t the first BI vendor to reveal its price list. Microsoft and Oracle, for example, have been publishing theirs for years. And, to a certain degree, so has Tableau Software, a data discovery vendor like QlikTech. Still, industry experts called QlikTech’s announcement a good thing, applauding it as a step in the right direction. But they also questioned if that step is significant enough to affect the rest of the BI industry, which has historically kept pricing strategies quiet.
“It’s a good faith signal, an effort to say that ‘we want to put our prices out there and let you know what this stuff costs,’ ” said Nancy Williams, a BI and analytics consultant for DecisionPath Consulting in Gaithersburg, Md. “But I think there are still too many issues and that’s not going to do it for people.”
So, what’s the BI-g deal?
Since BI first emerged as a software category, vendors have kept the cost of the technology fairly secret -- and for good reason, according to Williams. “It gives them optimal flexibility,” she said.
Doing so gives a salesperson wiggle room to meet a quota or size up a potential sale by weighing the long-term gains it could generate for a vendor. “They could look at accounts to see whether they should reduce pricing to get into a new industry or to obtain a strategic account,” Williams said.
On the flip side, Williams said, the practice has created an adversity for potential customers.
“What that means for clients is that this is hard,” Williams said. “Organizations, especially in the early days when they were totally new to BI and [data warehousing], had no idea what they needed to purchase and how much it would cost.”
That reality made it difficult to create a budget for the technology, but it also hemmed in organizations so that they were -- and for the most part still are -- unable to shop for the best deal.
“It has made it extremely difficult for prospects, analysts, consultants -- you name them -- to compare one price to another because they’re just not available,” said Claudia Imhoff, president and founder of Intelligent Solutions Inc., a consulting group based in Boulder, Colo.
Imhoff believes QlikTech’s decision to publish its price list, a move she called “terrific,” could give the company a competitive edge over some of the larger, end-to-end BI vendors. With a multitude of products in their BI software arsenals, Imhoff said she can see how complicated it would be for some of these larger vendors to list their prices since the cost would rely heavily on what modules and features a potential customer selects, Imhoff said.
“Coming up with a price sheet for that kind of an environment could be incredibly complex and convoluted,” she said.
The problem is partly packaging …
Even if every BI vendor released its price list, customers could still be deprived of a true apples-to-apples comparison because of the variability in how products are packaged.
“There are no published standards out there,” Williams said.
As customers try to weigh one product against another, they may be considering two similarly marketed offerings that have different functionality; what’s more, they may have to wait until a sales demonstration to learn what’s included in the price and what’s considered an add-on, Williams said.
“OLAP [online analytical processing] capability, reporting capability, dashboard, scorecard, predictive analytics,” she said. “Vendors … have different modules as well as different names for the products they sell.”
How vendors package different features is precisely where the complexity comes from, said Cindi Howson, founder of BIScorecard, a consulting firm in Sparta, N.J., that evaluates BI tools.
“BI has changed over time. So vendors have added capabilities, and they need to be able to get more money from customers -- both installed base and new -- to pay for that,” she said.
Like other consultants, Howson was pleased to learn of QlikTech’s announcement, but she also believes publishing a price list provides only a limited amount of transparency.
“It’s the packaging that’s confusing,” Howson said. “And it’s a big area of pain for customers.”
… and partly licensing
Functionality variations are further complicated by a tiered licensing structure. Unlike most vendors, for example, QlikTech doesn’t offer a viewer license or a look-but-don’t-touch version of the product.
“The theory is that [power] users create all of the reports and dashboards that the unwashed masses are allowed to see but not really change or interact with in new ways,” said QlikTech’s Boehm of the viewer license. “Our philosophy is that BI should be user-driven, and business users across an organization should be able to pursue new paths to insight and ask new questions.”
Instead, most QlikTech customers will purchase a named-user license so that users can access the tool and share documents with each other. But that license doesn’t include the cost of either QlikTech’s small business edition server for up to 25 named users or its enterprise edition server.
“This is where there’s no consistency in the industry,” Howson said. “With Microsoft, for example, the server-based pricing is one price and the named-user pricing is one price, but QlikView is a combination of paying for the named user as well as the server.”
Other costs like support and training are included in QlikTech’s price sheet but are represented as separate costs that will need to be factored into a bottom-line price. For QlikTech, support is shown as a percentage of the list price, but some vendors will charge support costs based on the net price, Howson said.
Plus, Williams said, it’s unclear if the price list is static or if it’s a jumping-off place for negotiations. “The one thing I don’t know -- will there still be deals done?” she said. “The jury is still out if these are the standard prices.”
Still, Howson and Williams credit QlikTech for being ahead of some vendors, such as SAP and IBM, in providing a glimpse into its pricing policy.
But for Imhoff, QlikTech’s price list is more than just a step in the right direction; it’s a hopeful moment that may just be significant enough to perpetuate a trend.
“This is a wonderful move our industry badly needs,” she said. “I suspect some of their peers will probably follow suit, and it’s going to grow in momentum.”