openerp-community team mailing list archive

[Fabien Pinckaers <fp@xxxxxxxxxxx>]

> Basic math for a client with 20 users and 5 apps for 24 months:
>   * 20 users x 5 apps x 24 months x $15 = $36,000
>   * Partner commission for 24 months (~50%)= $18,000

No, this is a common usecase:

Here is a typical use case (with old pricing), 40 users:
  - Public Price: $18720
  - Partner Price: $9360 (a ready partner)
  - Price sold to customer: $13.000
  - Implementation Cost:    $90.000

Maintenance part of the TCO: 12.6%
Commission  part of the TCO:  3.5%



> 
> On Sun, May 18, 2014 at 11:47 AM, Fabien Pinckaers <fp@xxxxxxxxxxx
> <mailto:fp@xxxxxxxxxxx>> wrote:
> 
>     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 <tel:%2B32.81.81.37.00>
>     Web: https://www.odoo.com
>     Twitter: @fpopenerp
> 
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> 


-- 
Fabien Pinckaers
Odoo Founder

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