Monday, 14 June 2010

New pricing strategy

Non-techie types: please read this, I value any and all input on this.

It's been a while since I discussed anything Informix-related on this blog. But given that it's quite a dramatic change to pricing, I wondered what people's thoughts are.

IBM has radically reduced and simplified the pricing of one of their products, it happens to be the one I work with most of all. In addition, they are giving it away on the Windows and Mac platforms, free to develop and, more importantly, free to deploy. There is a maintenance charge, but it's quite low considering what you're getting for that money.

My take on this is that they're hoping to a) eat into SQL Server's market share and b) buy the Apple market by offering seriously high-end technology at a very competitive price: free. By reducing the price of the software on the more traditional platforms, I guess they're hoping that the existing user base won't migrate away to either of these free platforms.

But aside from that, it looks to me like IBM is finally starting to pull its finger out when it comes to selling Informix by adopting a more aggressive market strategy.

In general, what would you think of someone adopting a strategy where they give away their product (but you have to buy support) in a market where they don't have much presence? Do you think it will work?


Brian, follower of Deornoth said...

It seems to work fine for MySQL.

Anoneumouse said...


Timdog said...

Non-techie comment here.

I'm always a bit sceptical of this kind of pricing policy, the problem with something being free is that people assign very little value to it, and will tend to ditch it again as soon as they have to pay for it, whether it be upgrades, support etc.

So, my fear for IBM is you get excellent initial penetration followed by horrible attrition rates.

No idea what Informix does tbf, just my thoughts on that kind of pricing policy.

Anonymous said...

I'm an old MVS/IMS/DB2 man, and slowly recovering. They threw DB2/2 at us FOC in an effort to get DB2 onto desktops. On fucking OS/2. And we were running fucking Token Ring.

Anything would be an improvement on that. SquealServer is the modern day equivalent of that nightmare, and I sit near three, that's right, THREE, 11 in binary 03 in hexadecimal, drei, sun, trois, SQLServer DBAs and they are all fucking porridge wogs.

Listen sunshine, you have not suffered until you've heard the intricacies of the MS caching algorithm discussed in Glaswegian, Dundee and Edinblurgh for two hours. IBM could turn up with Hitler's shit, covered in tramp shit, covered in tramp vomit and then covered with Hitler vomit, and I would let them fuck my sister. I'd pay them to do it. Lots. Just to make these SquealServer sweaties disappear.

In essence, I am delighted to hear this. We have our oars in the water in Informix and I have some say in what happens with some small/medium scale projects. I also have some input into the ratio of Windows/non-toy systems we have.

Thanks for the info, you rabid misanthropic children's entertainer! Love your blawg.

The Penguin said...

I can recall when "Big Blue" were the only really big player and everyone else were in thrall. Then some cunt failed to read the contract properly and gave proprietory rights to some geek called Gates for "his" operating system for their new toys...

The Penguin.

Anonymous said...

It's the Iphone App approach. Give away the IAquarium cut down version. Small children love it, but pester for the paid for upgrade so they can get more aquarium decorations. EXCEPT, Mum says no, and the kid gets bored anyway and goes onto freeware MustEatBirds instead.

I think the whole cost will be looked at, ie Mum will examine the maintenance costs very carefully and may say no.

Also, if the kids get bored with it, as someone else said, it's free so meh! get rid, get something else.

Might work as an idea, but it's a bit scattergun. Permanent takeup might be a small % - but of a big pool of buyers, so could work for IBM


A Zimbo said...

As usual from IBM. Sod all marketing of the new strategy. Try googling IBM Informix and you will not find a single press release about this. Then they will claim nasty Microshaft are too dominant in the market place while in fact it is because ol' Big Blue is like the British Civil Service, fucking inept.

Wat Dabney said...

The only economic knowledge I have comes from a couple of episodes of The Wire where a drugs entrepreneur, of necessity forced to cut his meagre supply of heroin with too much baking powder, develops strategies for selling his 'inferior goods.' I don't remember everything about it, but some people got hit with bats a bit later.

John R said...

It's not a new trick. Lots of companies selling lots of toys have worked out that you only sell the product once but the service/support goes on forever.

Easy example, printers. The original hardware isn't much more expensive the cost of a new set of ink cartridges; essentially you get it free with your first set. But how much do you end up spending on (high margin) refills over the next 2 or 3 years?

This is much the same tactic and stands a pretty good chance of working.

Chuckles said...

No. Mature market, trying to play catchup/pissing in the soup. WHatever market share they have is what they have.
People already have their chosen product, and not even dynamite will shift them.

Kingbingo said...

I know nothing about IT, but part of what I do is pricing strategy in financials. Generally the point made above about if you give something away it has no value is true. It also creates the problem of re-pricing to a fair level, after everyone has accepted that zero is the fair price.

Much better to always maintain a price your happy with but offer 101 promotions, deals and packages to pump out market share. I won’t bore you with how this might be done on pensions or wealth management. But I have witnessed it done by Microsoft quite well. They always have in the shops a high priced version of their software, but will allow you to blag a student & teachers copy for less than half price with little effort. Or as when win7 launched they made available hundreds of thousands of cheap pre-purchase copies. They also try and bundle a cheap copy with anything that moves.

The IBM strategy you’re describing seems a little lazy, they may well have a brilliant strategy in their back pocket. But it sounds fraught with problems down the line to me.

ex-Oracle said...


Idle Pen Pusher said...

A pricing structure where the supplier gets paid more the crappier the product is doesn't sound great...

Obnoxio The Clown said...

Thanks, Kingbingo.

Roger Thornhill said...

Well, I have IT, Marketing and Sales exposure.

This is a variation on "blades and razors", charging for the upkeep, but not the initial infrastructure.

It could be a good move, to build the number of skilled bodies out there who know how to make the most of the platform.

More bodies means commoditised bodies means cheaper bodies and a more reliable source of said bodies (hire and fire wise).

All this means more attractive to adopt and means you can offset (some of) the cost of maintenance from the lower cost of hires.

If it is free on Mac, I might take a gander at it.

Roger Thornhill said...

p.s. if your living is from being a rare commodity, as in this case an Informix guru, be afraid. IBM is after your lunch.

Obnoxio The Clown said...

Roger Thornhill, you can get the official download here.

You probably want the developer edition for a starting point, but that's just a guess.

Obnoxio The Clown said...

Actually, although they might be after my lunch, I think the current situation is no better. At the moment there aren't sufficient Informix skills out there and customers are reluctant to spend money on precisely for that reason.

The days of easy DBA money are gone, but I think if I can get a slice of the Informix sales pie, that will do me fine. :o)