I’ve talked about the dynamics of business software — what is changing and where it’s headed in the future. From providing a “no-code” application to creating applications that are fast and customizable, business applications are evolving faster than ever at the hands of non-technical users, or Citizen Developers. These “doers” are building applications that adapt to their business and are versatile enough to meet their ever-changing needs at a price point that is easy enough to put on a credit card and start using almost instantly.
This sounds like a win-win situation, right? But for many companies, this is a big change from how things have always been done as they relate to business software. And change can be difficult for businesses.
In the past, business software applications came off the shelf, packed with features and functionality that the majority of people never used. This is often referred to as the 80-20 rule. Eighty percent of users typically use only 20 percent of the application’s features. Even worse, this came at a fixed price with no option to choose features that fit with your business. Like it or not, buyers had to settle on a solution and pay for all the features, including the ones they didn’t want or need.
The name of the application game over the last 20 years has been around meeting mass appeal. These applications were made to meet the needs of a wide range of businesses of every size and type, and even different industries. Software vendors simply bloated their software, boasting about the hundreds of new capabilities on business software packaging and justifying a higher price tag. They rarely thought about the needs of the end user.
The problem here isn’t the total cost of the solution long term, but it’s the initial prices to get started and initiate the service. There have been many a blog post written on pricing best practices, the art of upselling packages and user-based pricing. This post is not meant to trump any of those. Instead, I want to highlight the importance and cost of speed to solution — or lack thereof. This is about how long it takes for businesses to implement an application and get value from it.
The problem here, of course, is that most people don’t see the cost of time. It’s difficult to measure the cost of an application taking six days or six months to implement. Never mind they were paying for features they didn’t need or want — or worse yet, didn’t really fit their exact business need.
But that is the old way. The past. Let’s talk about the future now.
Price plays a part in the future of business software
Now that the tides have shifted with subscription-based pricing for business software, Citizen Developers are taking advantage of this by building applications that are tailored precisely to their company’s unique needs at a price that aligns with value. Moreover, these Citizen Developers are able to build and deploy solutions in days or weeks, not months or years. And of course, they’re rapidly implementing these applications, paying only for the feature they want and need.
Fixed-priced solutions for business software applications is dead, and now so is fixed-price development for custom software applications. Users are creating apps with the features that drive the productivity of their business and they are doing it more cost effectively than ever before. Today, a business manager can turn to the Internet and buy an application subscription using the corporate credit card for a nominal fee. Not only is this cost savings helpful to the corporate bottom line, it also saves time for the user purchasing the software. The business manager solves their problem faster, and the business saves money and gains greater efficiency in the process.
The price of an application must fit the nature of your business, and the growing number of Citizen Developers are creating a world where a previously unattainable a la carte menu of features and users is not only possible to get, but it’s possible to build it in-house at a fraction of the cost — freeing up budgets and eliminating concerns over finding the business software that most closely matches their needs and size.
Keep tweeting us at @trackvia — let us know how you think the way we work will change the price structure of business software applications.