These subscriptions at first glance appear attractive: there's no per user or flat-rate cost for each seat you use.
Suppose a vendor comes to you with two contract options:
Per-user: $150/mo. per user, no tiered pricing (each new user is $150 pro rata);
Group: $2,000/mo. for Group access. The Group has 20 people in it. That's $100/user per month!
It's a no-brainer: simple math tells you to take Option 2.
No so fast.
Not all your users in the group have roles that benefit from the service. You may provision each person with the resource, but how many actually need the service? And how many will use it? How often?
Let's suppose you have a time machine that allows you to zoom ahead a year and see how the product ends up being used. Your future data shows that while you may have 20 subscribers, only 5 people are front office, and of those, only 4 people used the service at least weekly.
Your data are telling you that of the 20 people licensed for the service, only 4 are meaningful ROI+ users.
So if you were on a per-seat license, you'd be paying $600/mo. versus $2,000 a month for the group license.
With Option 1 you're paying $150 a month per user for four active users. With Option 2 you're paying $500 a month per user for your four active users.
This analysis tells you to take Option 1.
Absent a time machine, what should you do?
My recommendation is to start small with a limited, preferably per seat, license. Your unit costs may be higher in year 1, but you will have good qualitative data on the utility of the service, and, using a service like Research Monitor or OneLog, you'll have quantifiable data on usage patterns as well. Word of mouth from subscribers will potentially drive interest from other members of the Group, thereby justifying a switch to a group license upon renewal.
Start small, force the vendor to demonstrate actual value, before you go enterprise.
And remember, you can always repaper a contract before the term ends! If it really looks like the ROI is there for a group license, renegotiate - nothing is written in stone.
- Kevan Huston
No so fast.
Not all your users in the group have roles that benefit from the service. You may provision each person with the resource, but how many actually need the service? And how many will use it? How often?
Let's suppose you have a time machine that allows you to zoom ahead a year and see how the product ends up being used. Your future data shows that while you may have 20 subscribers, only 5 people are front office, and of those, only 4 people used the service at least weekly.
Your data are telling you that of the 20 people licensed for the service, only 4 are meaningful ROI+ users.
So if you were on a per-seat license, you'd be paying $600/mo. versus $2,000 a month for the group license.
With Option 1 you're paying $150 a month per user for four active users. With Option 2 you're paying $500 a month per user for your four active users.
This analysis tells you to take Option 1.
Absent a time machine, what should you do?
My recommendation is to start small with a limited, preferably per seat, license. Your unit costs may be higher in year 1, but you will have good qualitative data on the utility of the service, and, using a service like Research Monitor or OneLog, you'll have quantifiable data on usage patterns as well. Word of mouth from subscribers will potentially drive interest from other members of the Group, thereby justifying a switch to a group license upon renewal.
Start small, force the vendor to demonstrate actual value, before you go enterprise.
And remember, you can always repaper a contract before the term ends! If it really looks like the ROI is there for a group license, renegotiate - nothing is written in stone.
- Kevan Huston
No comments:
Post a Comment