Forrester: What customers want from ERP prices

Every enterprise software vendor is hearing the same thing these days from their customers: "I need to cut my software licence and pricing costs. What can you do to help me out?"

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Value.

Everyone's looking for more "value" for their money. Maintenance and support fees, for instance, is one area that customers have almost unilaterally targeted as "Where's the value for me?".

Wang notes that maintenance fees have come "under greater scrutiny as clients question the level of reinvestment, innovation and support that vendors provide."

Customers also want value in decreasing software implementation and operating costs while improving flexibility. New SaaS offerings, for one, "have shaped current expectations because these solutions provide pay-as-you-go, 'flex-up and flex-down' deployment," Wang adds.

Overall, he writes, users now expect (and many are demanding) that their enterprise vendors allow them to buy software licenses when needed, reduce licenses during downturns, and unload shelfware maintenance fees that often result from aggressive sales tactics.

Predictability.

Enterprise customers have to come to expect predictability in maintenance fee pricing and reasonable price list changes. They also count on a more constant stream of innovation, Wang writes, "but current on-premise options limit user access to new functionality over long periods of time."

Of course, customer "access" to that new functionality typically necessitates expensive upgrades. Again, the SaaS vendors have put pressure on traditional on-premise vendors, "since they can deliver constant innovation with quarterly and even monthly product updates," Wang adds.

In addition, the report analyses how 12 well-known enterprise vendors have responded to customers' new needs-examining the vendors' completed, work-in-progress or ongoing pricing and licensing initiatives for the fourth quarter of 2008 and first quarter of 2009.

Naturally, vendors aren't oblivious to their customers' recessionary realities, and Wang notes that many vendors have focused on "proving value and simplifying licensing and pricing."

But on-premise vendors have entrenched business models-and aren't nonprofits, either. "Not all vendors," he adds, "can deliver on choice, value and predictability."

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