Big software discounts ahead?

Added By Tony Byrne at 21-Feb-2008 | Twitter: @TonyByrne |

A colleague whose company recently went through a Web CMS selection process just received an e-mail from one of the vendors who lost out in the competition.

Let's just call them "Vendor Y," selling "Product X." The message starts out by claiming that Vendor Y has instituted "the first ever 'Content Management Replacement Program.'" That's not true, actually: vendors constantly try to unseat competitors and will frequently offer attractive deals to do that.

The message continues innocuously enough:

We know you looked at us once, but would love for you to take a look at us again! Find out why more people are walking away from their existing CMS solution or one they just purchased to go with [Vendor Y]!

But then the whopper:

[Product X] - normally valued at 250K plus 20% of maintenance, currently offered at 65K plus 25K in maintenance. Get a full solution for under 100K!

The 75% license fee reduction smacks a bit of desperation, although note that Vendor Y does not so heavily discount its ever-beloved maintenance.

Every now and then, an established vendor panics (this time in the face of a looming recession?), and cuts prices in an attempt to go down-market, even though the tool itself is far from a commodity. They usually regret it. In any event, you the customer will still pay dearly for its customization.

But what of the bigger picture? Over the past 10 years, I've been watching CMS pricing go up, go down, level off, and go back up a bit. It partly depends on market tier -- pricing on the low end has fallen faster amid fierce competition. Perhaps now license fees will drop again in the upper tiers as well. Pursue negotiations accordingly.

Categories: Tony Byrne, Web Content Management, Building Business Case, Marketplace at Large, Vendor Viability & Financials