openerp-community team mailing list archive

[Fabien Pinckaers <fp@xxxxxxxxxxx>]

Hi,

I just wrote a blog to explain the new pricing:
    https://www.odoo.com/blog/1/post/158

Please read it before going further in this email.


I'll try to answer most questions here:

1/ How to compute the price?

The price is: # total of users X # of apps bundle X 12€

2/ Why don't we charge according to real usage? (e.g.: 5 users on CRM, 3
on accounting, 7 on projects?)

Because it's impossible to predict for yearly contracts! Quoting would
become a nightmare and a lot of people would abuse from this unclear
situation. (a customer would start with a low price but three month
after we would have to upsell him because of the number of users on some
apps)

Lets take the following use case: a company of 10 users that uses CRM,
accounting, projects. They have 3 sales person, 4 consultants, 1
director, 1 secretary and 1 accountant.

When you do a quote for this customer, how many users do they have per
application?
  - is the director using accounting and CRM?
  - can the sales have read access to project for follow-ups to their
    customers?
  - can the accounting check sales orders coming from the sales?
  - is it the secreatary that give access rights to others users?

I checked in our production database. We have 7 persons working in the
marketing department. If one do a quote of 7 users for the marketing
application bundle, it's totally under-estimated.

In reality, we have 45 users on marketing application, not 7:
  - the Professional Service team that built the certification sample
    exam on the website (survey)
  - users that train others users on features
  - managers that need statistics about events, mass mailing, ...
  - most sales need an access to check prospects on events,
  - system administrator need an access to allocate access rights and
    test for others users

3/ Is it expensive?

Absolutly not. It's 2x to 3x cheaper than the market average. Check this
comparison of software vendors:
  https://www.odoo.com/website/image/ir.attachment/537400/datas

Moreover, partners get 50% to 60% discount on the public price. It means
gold partners pay only 4.8€ / $6 per user and per application. Whatever
the market, it's super cheap and super competitive.


4/ Is it an increase of the price?

For some customers: no. (1-3 apps)
For some customers: yes.

The biggest increase would be around 2x more for one particular customer
that uses a lot of applications. (6) I never saw a company running 10
apps and if they do, it's normal that they pay 120€ per user because the
value they get from Odoo is huge. No other product can offer this.


5/ localization & customization

Odoo has a lot of huge advantages compared to traditional ERPs:
  - higher scope: website, ecommerce, cubes analysis, CRM, ...
  - better usability, faster implementation
  - better flexibility: allows custom development and high level config

Odoo also has a few disadvantages compared to traditional ERPs, the main
one is the localization in some countries. (something we will fix for v9
as we will massively invest in accounting l18n)

Odoo has a lot of PROS and a few CONs. But the few CONs are largely
compensated by the PROs. As the product is better, economics tell us
that the product must be more expensive.

Not only we are not more expensive, but we are at least 2x to 3x
cheaper. And, if you take the partner price 4.8€ per user and per app,
we are 6x cheaper than the competition!

I do not know a lot of industry where a product can be 2X cheaper for a
better quality.

One should not be frustrated about the price.

@marcelo
> I recently read the posts by the Compiere founder explaining what
> went wrong after he got VC money. Read it and it will look like it is
> all happening again.
Every time we do a change in the community people cry: take care of
forks, read Jorge's blog, VCs are evil, OpenERP does not understand its
users...

Odoo is not comparable to Compiere/Tryton/Openbravo or others. The
sustainability of a product is not related at all with fork threats,
failure of others open source software or what ever.

The sustainability of every product is directly linked to it's ability
to create a sustainable model where partners and publishers get enough
revenues to grow their activities on the product.

This requires a lot of things like: having a great product allowing good
service margins, a good price for the publisher, happy customers, etc.

>      What kind of business puts potential clients in front of active
> paying clients? The model is wrong wrong wrong.

What's wrong is to have a pricing so cheap that it does not allow to
sustain the development of the product, or too few customers because the
product is not competitive. That's what killed some products.

>       If Odoo was a ready-to-use software then the model would make a
> lot of sense. But they are ignoring the importance of localization &
> customization. If I wanted off the shelf software I wouldn't bother
> going open source.

Our customers don't choose Odoo beause it's open source. They choose
Odoo because it's better (products and/or servives of partners)

We should stop being frustrated of being open source. It's not because
we are open source that we should be cheaper. The only thing that
matters for a customer is to have a great product at an affordable price.

Open Source is not a customer value, it's a way to develop better products.


>             Also, this thing that partners will not get any commission
>         on contracts with more than two years is REALLY nonsense. It
>         essentially means that the contract will become 50% more
>         expensive on the 3rd year because the partner will need that
>         revenue back and of course it will be important for the client
>         to keep bonds with the partner. It is really sad when companies
>         pull this sort of crap on their "partners".

My understanding is that partners don't sell Odoo Enterprise because of
their commissions. They sell it because they need it for their customers
and because this allows them to sell more services. (and this is how it
should be)

The part of the commission on Odoo Enterprise is usually lower than 4%
of the revenue a partner take on a project. So, their motivation is not
on the commission.

I may be wrong. I am open to discuss this during the community days.



Hope it helps better understanding this strategic move,
Thanks for the feedback,

-- 
Fabien Pinckaers
Odoo Founder

Phone: +32.81.81.37.00
Web: https://www.odoo.com
Twitter: @fpopenerp