M. David Matney
03-17-2009, 05:43 PM
I wanted to take a few moments to explain subscription base pricing vs. purchase based pricing. In this posting I will take a few moments to address how our pricing model benefits businesses with subscription based pricing vs. purchase based pricing.
First let me introduce you to the software buying program of the future, fast becoming the present. Many software companies have already adopted the Saas model with many other software companies adopting it daily as it is the advantage of the consumer due to savings to the consumer in costs. This model is called SaaS which stands for Software as a Service. You can read more about it at wikipeda.org
http://en.wikipedia.org/wiki/Software_as_a_Service
The goals of SaaS model is to achieve the following:
alleviates the customer's burden of purchasing software for every computer in their organization with every conceivable application.
reduces traditional End User License Agreement (EULA) software maintenance costs, ongoing operation patches, and patch support complexities in an business.
on-demand licensing enables software to become a variable expense, rather than a fixed cost at the time of purchase.
It also enables licensing only the amount of software needed versus traditional licenses per computer or per user.
SaaS also enables the buyer to share licenses across their organization reducing the cost of acquiring licenses for every computer in their business.
reduces the up-front expense of software purchases, through less costly pricing.
In essence, Saas, although different thinking than traditional purchasing, saves you more money than you spend with traditional purchase pricing models. Example: If this were simply a purchase or our software solution or even a competitor solution you would spend close to $20,000 for 15 computers. Because $1800 per year allows you to install the software on as many computers and as many users, its a flat fee no matter how many users or computers. You also get all software upgrades free of charge. So lets assume you spend $20,000 to purchase equivalent licenses vs. $1800/year - your break even point would be in about 11 years, and under the purchase model you would have NO upgrades during that 11 year time-frame, plus you had a huge upfront cost, upgrades can cost as much as $5,000 each time you upgrade. On average you would need to ugprade approx every 3-5 years, so that $20,000 purchase actually equated to about $30,000 spent over an 11 year period.
Simply put, in 3 years, if you purchased software equivalent, your software most likely will not even run on the current computer platform if you did the purchase. Computer technology changes every 6 months on a significant scale, and every 3 years on an outdated scale. However with our Saas model, your software will always work on the latest technology in computer hardware. Take for example engravers or lasers, the manufacturers don't keep the printer drivers up to date thus forcing you into archaic technology that is not compatible with current technology thus holding back your business. Our goal is to ensure your software is always up to date no matter what computer platform in the future. On average we release two new upgrades every year. You get these upgrades FREE OF CHARGE!!
With the Saas model, your software is upgraded free of charge year after year after year. Your costs are 10 times lower because you never pay for upgrades, you know your software will always run on the latest computer platforms, and your investment is less each month than you pay for your electric bill for your business. ($150/month is what our software costs, you can sell two 9x12 plaques per month to pay for BizWizard each month for all users and all computers in your business) - in addition, Saas model qualifies for full writeoff, vs. purchase pricing must be depreciated on your taxes.
So, we understand that traditionally, you are more familiar with purchasing a software product and then owning it, but then you must keep paying upgrade fees to keep software upgraded. In the end, you actually spend more money with upgrade fees and higher upfront costs, then the Saas model that we offer.
In addition, lets assume you even view the $1800 per year as too expensive. 90% of our customers have reported to us over and over again saving 20 times in excess of the cost of BizWizard Professional:
Donna Gray at [/URL] [URL="http://www.awardsmall.com"]Awards Mall (http://www.AwardsMall.com) in Wisconsin, saved $24,000.00 in advertising costs just in the first year alone directly because of BizWizard. She estimates she saved even more in labor costs.
Sheri Arnold at Arnolds for Awards (http://www.ArnoldsAwards.com) in California, saved $14,500 in advertising costs just in the first year alone directly because of BizWizard, and she saved more in labor by not having to hire an additional employee because of the automation of BizWizard. A Single minimum wage employee equates to about $15,600/year and that does not take into consideration employer matching or benefits costs. So in essence, Sheri saved over $30,000 the first year, and continues to save the yearly employee wage of $15,600 EVERY YEAR.
Joe Pisani of B-Hive Awards (http://www.bhiveawards.com) in Florida, completely automated his store and saved thousands of dollars in time and labor simply because of the Automation of BizWizard Professional.
Niels Norby from San Dieguito Trophy (http://www.ourtrophy.com) in California saved thousands of dollars and was able to remodel his showroom with the money he saved. As he put it at a dinner we had for users of BizWizard Professional "If I didn't have BizWizard, I would quit this business as I could not imagine going back to the old way of doing things"
Richard Schaeffer of Awards and More (http://www.awards-more.com) in Connecticut told us that not only did BizWizard benefit his company with organization and savings in his small 2 person store, but he received a phone call from one of his customers that orders products every week. His Customer told him "I don't know what software program you are now using, but whatever it is, you have made my life easier with it as our accounting of invoices we pay you are more on target and on the dollar than ever"
These testimonials are the NORM. Ever seen the commercials on tv that say "results not typical" - we are the opposite these are TYPICAL results, TYPICAL savings. 90% of the trophy shops report these similar savings. So in essence, if you could save $30,000 in 2009, and spend $1800 to do it. Thats the same as NetSoft Studio writing you a check in the amount of $28,200.00 just to use BizWizard Professional.
The main point here is the pricing model is actually designed to save you cost and expense from the older licensing models.
We have seen software vendors in the last 10 years close doors and go out of business because they didn't utilize the Saas business model to benefit their customers and their own company. All those companies that purchased these software solutions have no one to support or upgrade their software. Thus their initial investment was a waste of money.
So the caveat is:
How do we make the product "Cost effective" for the trophy shop and
At the same time make sure our company is around to support it for the next 50 years, and
At the same time, ensure you save more money using the software than the cost of the software.
Saas business model accomplished all of these goals in one swoop. You save More money, we stay in business because there is constant revenue stream, your customers even benefit from the organization aspects. Everyone wins.
Hopefully this explains why we utilize the Saas purchasing model vs. traditional purchase model.
First let me introduce you to the software buying program of the future, fast becoming the present. Many software companies have already adopted the Saas model with many other software companies adopting it daily as it is the advantage of the consumer due to savings to the consumer in costs. This model is called SaaS which stands for Software as a Service. You can read more about it at wikipeda.org
http://en.wikipedia.org/wiki/Software_as_a_Service
The goals of SaaS model is to achieve the following:
alleviates the customer's burden of purchasing software for every computer in their organization with every conceivable application.
reduces traditional End User License Agreement (EULA) software maintenance costs, ongoing operation patches, and patch support complexities in an business.
on-demand licensing enables software to become a variable expense, rather than a fixed cost at the time of purchase.
It also enables licensing only the amount of software needed versus traditional licenses per computer or per user.
SaaS also enables the buyer to share licenses across their organization reducing the cost of acquiring licenses for every computer in their business.
reduces the up-front expense of software purchases, through less costly pricing.
In essence, Saas, although different thinking than traditional purchasing, saves you more money than you spend with traditional purchase pricing models. Example: If this were simply a purchase or our software solution or even a competitor solution you would spend close to $20,000 for 15 computers. Because $1800 per year allows you to install the software on as many computers and as many users, its a flat fee no matter how many users or computers. You also get all software upgrades free of charge. So lets assume you spend $20,000 to purchase equivalent licenses vs. $1800/year - your break even point would be in about 11 years, and under the purchase model you would have NO upgrades during that 11 year time-frame, plus you had a huge upfront cost, upgrades can cost as much as $5,000 each time you upgrade. On average you would need to ugprade approx every 3-5 years, so that $20,000 purchase actually equated to about $30,000 spent over an 11 year period.
Simply put, in 3 years, if you purchased software equivalent, your software most likely will not even run on the current computer platform if you did the purchase. Computer technology changes every 6 months on a significant scale, and every 3 years on an outdated scale. However with our Saas model, your software will always work on the latest technology in computer hardware. Take for example engravers or lasers, the manufacturers don't keep the printer drivers up to date thus forcing you into archaic technology that is not compatible with current technology thus holding back your business. Our goal is to ensure your software is always up to date no matter what computer platform in the future. On average we release two new upgrades every year. You get these upgrades FREE OF CHARGE!!
With the Saas model, your software is upgraded free of charge year after year after year. Your costs are 10 times lower because you never pay for upgrades, you know your software will always run on the latest computer platforms, and your investment is less each month than you pay for your electric bill for your business. ($150/month is what our software costs, you can sell two 9x12 plaques per month to pay for BizWizard each month for all users and all computers in your business) - in addition, Saas model qualifies for full writeoff, vs. purchase pricing must be depreciated on your taxes.
So, we understand that traditionally, you are more familiar with purchasing a software product and then owning it, but then you must keep paying upgrade fees to keep software upgraded. In the end, you actually spend more money with upgrade fees and higher upfront costs, then the Saas model that we offer.
In addition, lets assume you even view the $1800 per year as too expensive. 90% of our customers have reported to us over and over again saving 20 times in excess of the cost of BizWizard Professional:
Donna Gray at [/URL] [URL="http://www.awardsmall.com"]Awards Mall (http://www.AwardsMall.com) in Wisconsin, saved $24,000.00 in advertising costs just in the first year alone directly because of BizWizard. She estimates she saved even more in labor costs.
Sheri Arnold at Arnolds for Awards (http://www.ArnoldsAwards.com) in California, saved $14,500 in advertising costs just in the first year alone directly because of BizWizard, and she saved more in labor by not having to hire an additional employee because of the automation of BizWizard. A Single minimum wage employee equates to about $15,600/year and that does not take into consideration employer matching or benefits costs. So in essence, Sheri saved over $30,000 the first year, and continues to save the yearly employee wage of $15,600 EVERY YEAR.
Joe Pisani of B-Hive Awards (http://www.bhiveawards.com) in Florida, completely automated his store and saved thousands of dollars in time and labor simply because of the Automation of BizWizard Professional.
Niels Norby from San Dieguito Trophy (http://www.ourtrophy.com) in California saved thousands of dollars and was able to remodel his showroom with the money he saved. As he put it at a dinner we had for users of BizWizard Professional "If I didn't have BizWizard, I would quit this business as I could not imagine going back to the old way of doing things"
Richard Schaeffer of Awards and More (http://www.awards-more.com) in Connecticut told us that not only did BizWizard benefit his company with organization and savings in his small 2 person store, but he received a phone call from one of his customers that orders products every week. His Customer told him "I don't know what software program you are now using, but whatever it is, you have made my life easier with it as our accounting of invoices we pay you are more on target and on the dollar than ever"
These testimonials are the NORM. Ever seen the commercials on tv that say "results not typical" - we are the opposite these are TYPICAL results, TYPICAL savings. 90% of the trophy shops report these similar savings. So in essence, if you could save $30,000 in 2009, and spend $1800 to do it. Thats the same as NetSoft Studio writing you a check in the amount of $28,200.00 just to use BizWizard Professional.
The main point here is the pricing model is actually designed to save you cost and expense from the older licensing models.
We have seen software vendors in the last 10 years close doors and go out of business because they didn't utilize the Saas business model to benefit their customers and their own company. All those companies that purchased these software solutions have no one to support or upgrade their software. Thus their initial investment was a waste of money.
So the caveat is:
How do we make the product "Cost effective" for the trophy shop and
At the same time make sure our company is around to support it for the next 50 years, and
At the same time, ensure you save more money using the software than the cost of the software.
Saas business model accomplished all of these goals in one swoop. You save More money, we stay in business because there is constant revenue stream, your customers even benefit from the organization aspects. Everyone wins.
Hopefully this explains why we utilize the Saas purchasing model vs. traditional purchase model.