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Pricing for BI and Analytics

Written By: Jorge Garcia
Published On: April 17 2012

In recent years, the business intelligence (BI) and analytics space has been changing at an incredible rate, not only in terms of functionality but also in the way BI providers plan their go-to-market, sales, and pricing strategies. Core business requirements like pricing and usability are forcing software providers to radically modify the way they approach customers and how they deliver their services. Two recent announcements by software vendors QlikTech and Kognitio are prominent examples of how vendors are addressing the pricing issue.

QlikView and Public Pricing

QlikTech recently revealed its price list for its QlikView platform on its Web site. This is a radical and appealing move from the Pennsylvania-based company. Most software providers hesitate to provide final prices for their offerings, mostly because the price undergoes some adjustment according to different customer needs. QlikTech’s decision for “taking the mystery out of purchasing software” can potentially help organizations—especially those with tight budget constraints—to plan their own configurations in advance. QlikTech may also encourage customer confidence by being more transparent in its offerings.

This strategy could also impact collateral aspects of BI usage and implementation, such as enabling wider user adoption because QlikTech’s pricing strategy also does away with licenses for limited or restricted functionality (where users can only view and explore within the information but not interact with and discover information). Vendors are making continuous efforts to make BI applications easier to use for all business users, but a price structure where full functionality is offered with all licenses might help organizations to promote the internal adoption of BI tools (as opposed to relegating BI tasks to an elite group of specialists).

And organizations should see some immediate cost savings by being able to work within their budgets and know which functional capabilities they get right from the start.

It will be interesting to see how QlikTech’s strategy is embraced, and whether it will influence other vendors to follow suit by providing increased transparency for pricing.

Kognitio Puts a Price on Memory

Meanwhile, Kognitio, an on-demand data warehouse and big-data analytics provider, announced that it is shifting its pricing model. Originally priced according to disk storage use, Kognitio will now be charging users of the cloud-based analytical platform based on the amount of memory used by the customer’s hosted servers.

Roger Gaskell, chief technology officer (CTO) of Kognitio, says, “Data is growing exponentially every day. With traditional pricing models, users are locked in to pay ever-increasing license costs on data that they need to have available, but don’t need instantly.” So now customers pay only for the data they are actually processing, not for the volume of information they store.

According to Kognitio, customer savings with this sort of pricing model can be significant because of all the customer data volumes that are stored, only a small percentage is regularly needed, and resides and is processed in memory.

Since organizations can perceive the value of data actually being processed, this sort of pricing structure may be more readily accepted than paying for the storage of data that just sits there. Kognitio’s pricing strategy for its platform-as-a-service offering may potentially shift the general approach to pricing for cloud and on-demand solutions—making it more attractive to customers—and thus promote more widespread adoption of cloud services.

Meanwhile, this is also an opportunity for organizations to enhance productivity and to be more effective when targeting data and conducting high-volume data analysis.

Kognitio stands to benefit from this pricing schema by attracting customers for whom this structure is more suitable, especially those with very particular sets of data management requirements.

Realigning Pricing with Functionality

These two announcements might be opening the door to a new type of vendor–user relationship, where BI software costs are focused more on efficiency than on product branding. One can only hope that this transparency of pricing in relation to functionality will trigger other vendors to apply similar innovative strategies, to provide more clearly defined software offerings not only in BI, but in other enterprise software areas.
 
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