Unlike most traditional business intelligence (BI) vendors, the move from QlikTech to publish its full BI product pricing online is bringing much needed transparency to customers.
That’s according to Ovum analyst Madan Sheina, who argues the BI market has been “crying out” for greater transparency. Unwillingness to reveal pricing lists allowed vendors to get away with excessive charges, she says, allowed vendors to squeeze money out of new or existing accounts and confuse customers that possess little knowledge of BI.
Ovum estimates that over 50% of BI and data warehousing sales between 1995 and 2000 were either inflated or exaggerated according to needs.
Sheina outlines vendors such as SAP, IBM and Oracle that still offer broad and functionally rich BI suites that cover a wide range of requirements. He explains: “These suites consist of modules that are integrated at varying levels, but almost always packaged and sold as a suite. It is difficult to accurately price solutions like these because they are largely based on the features required and the modules selected.”
Additionally, support maintenance and the lack of clear licensing are also factors pushing up the price alongside support, training, and maintenance.
But vendors’ days selling individual BI tools at premium prices are numbered, he says, thanks to the advent of web clients, cloud computing, and a certain degree of commoditisation in the BI market following the entry of providers such as Microsoft.
With QlikTech’s business model and software, QlikView, focused on simplicity, the move to publicise its prices should come as no surprise, explains Sheina. Both QlikTech and Tableau Software, a newer entrant also publishing their pricing list, are experiencing strong growth and he explains simple pricing may be the reason why.
Sheina says: “Other BI vendors, even those selling large integrated suites, should take heed. While it is too early to say whether moves to provide clearer glimpses into pricing policies will perpetuate a wider trend in the BI sector, it is badly needed, and more so as BI options open up for customers driven by disruptive technologies and models around cloud computing, open source, appliances, and in-memory processing.”
He adds that until standard pricing becomes standard practice, BI customers should factor in the following things when purchasing BI and analytics software:
- Negotiating the ‘perfect’ BI deal is not an exact science in spite of attempts to create a definitive pricing framework. Pricing a BI solution therefore requires a more pragmatic approach and understanding of managing and manipulating the various processes and discussing price points at each of these steps.
- The goal should be to boil down BI requirements and needs into discernible features, functions, and architectures that can be accurately priced, and can, if necessary, be negotiated down. However, customers should also be aware of factoring in hidden costs around the actual software.