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We are able to track and monitor pricing changes for software development tools and components on a global basis. Do you want to know how real world prices have changed? ComponentSource has been in the software component and development tool business for 15 years and we have watched as product pricing has risen from the humble beginnings of VS-OCX at $49-$99 up to $1,499-$1,999 for complex specialist products like LEADTOOLS Vector Imaging Pro SDK.
So how have prices changed in recent years? Has the recession changed what customers are really buying or spending day to day? Several of you have asked if prices have fallen in the last few years, so I went off and did some research and the answer may surprise you. In the last 4-5 years the average unit price of products actually purchased by our customers has risen by 41.1% from $766 USD in April 2006 to $1,081 USD in April 2011. This data is based on real orders placed by our customers - so it represents real spending on product licenses. That is, it is not just an analysis of how the price lists held in our system have changed over time. It is one thing to ask a customer to spend $1,499 on a product - but it is another thing to make him or her actually buy that more expensive option and not the cheaper $799 offering. In short customers are typically spending 41.1% more on each product they buy compared to 4-5 years ago.
So why is this relevant to you? Well I would ask you to go back and look at your own pricing from 2 years ago and 4-5 years ago. Have you been able to add features and hence value to your software product in the last 2 years or the last 4-5 years? And if so - have you raised your price? Or introduced more highly priced product editions? i.e. Introduced an Enterprise or Universal edition with more complex functionality at a higher price, as well as keeping your Std and Pro editions with basic functionality at a lower cost?
If you haven't re-visited your pricing and licensing model for the last few years - perhaps now is a good time to step back and take a look at how your pricing and sales have changed? And ask yourself should I be valuing my software products more highly? And have I kept up with the global market average unit price that customers are now (happily) spending? Remember - in the last 4-5 years the global market average unit price for a software development tool or software component product has risen by more than 40%!
Has your product range and price kept pace with the rest of the global market?
If you have any questions about this data or valuing your products correctly - then please email: harryk@componentsource.com |
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Many of you will already be sending us your latest price lists each month or quarter as an Excel spreadsheet. Paul Morgan, Paul Kerr, Enrique Perez, Thomas Moon and Chris Brooke have probably already emailed you or called you to discuss keeping us up to date with all your latest price changes, licensing changes, new versions, new editions, upgrades, maintenance plans and annual renewal prices.
Why is this important? We want to make sure that our mutual customers know the correct price for the license option of their choice. This in turn means that we are always paying you the correct money for any license sale we make. The easiest way to make this happen is to regularly send us your complete price list every month or quarter as an Excel spreadsheet, ideally including a column that shows your part number, as well as the description and price. Plus, if something is an add-on, adding a column that says: "Requires Part Number XYZ123-AB before you purchase this Add-on." is also quite useful.
For those of you with more complex multi-currency pricing for different parts of the world this is also one of the easiest ways to send us pricing in: USD, EUR, GBP & JPY. All we ask is that you clearly state what price list applies in a specific country or region. For example: Please use JPY in Japan, GBP in the UK, EUR in Europe and the USD price list for all other parts of the world.
Finally - if the Excel spreadsheet contains new pricing that is to take effect at some point in the future, please make sure that the effective date is clearly stated on the price list - such as: "New Prices Effective from July 1st, 2011". We will then set up our system data to make sure that the new prices appear automatically on that date.
If you have any questions about this please email: paulm@componentsource.com
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Did you know that we provide customer services in 10 different languages?
Yes - to help all your international customers around the world we speak to them in: English, French, German, Italian, Spanish, Portuguese, Japanese, Korean, Cantonese (Chinese) & Mandarin (Chinese)!
More info: https://www.componentsource.com/services/about-us/contact.html |
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