The ITSM Tool Pricing Ouch-O-Meter

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One thing that has surprised me during my initial exploration of ITSM tools is the simplicity of some SaaS based pricing models.

Software licensing options offer vendors the ability to flex their competitive muscles, adapt their solutions to different customers and maximize revenue.

Microsoft is particularly good at this, if you are a left-handed student living in Outer Mongolia – Microsoft has a SKU code with your name on it! To the other extreme, Salesforce.com licensing is remarkably straight forward, if you have fifty users and you want Enterprise Edition – everyone must be on Enterprise Edition.

The counter to this simplicity is that customers might end up paying for development of software that they don’t use, but I think this is easily outweighed by simplicity and predictability. No hidden surprises and endless fiddling about with licensing scenarios.

Moreover, for a SaaS based subscription model it is in the interests of the vendor to ensure you are a happy customer, rather than the vendor constantly trying to sell the next upgrade or option. Vendors are more interested in longevity and retention over winning the big deal, in theory at least.

The KISS Principle

I was pleasantly surprised to see some SaaS based ITSM vendors offering one simple price per user per year. For everything. I’m not the sharpest tool in the box so I’m all for keeping things simple when the opportunity presents itself. KISS.

Being this crystal clear over licensing represents a significant paradigm shift for some traditional ITSM tool vendors. It is difficult to wean yourself from high margin professional services revenue when you have grown used to it – how will that revenue be replaced if we simplify everything for our customers? Similarly some vendors position relatively low cost ITSM tools specifically to generate new business for their consulting business.

Eyes Wide Open

I believe pricing simplicity should be a serious consideration when choosing a tool vendor. I have compiled a quick pricing ‘Ouch-O-Meter’ to help during the tool selection process. Click on the image above to enlarge it.

I’m not saying that SaaS is the only way to go, nor am I anti-consultant (being one myself) – I just like the simplicity of the licensing model. I believe how things are priced moving forward should be a serious consideration when exploring a new vendor relationship, there is nothing worse when securing a great deal than to find the hidden extras.

Am I entering into an ‘all you can eat’ license or a ‘We’re going to nickel-and-dime you every time you breath’ relationship?

Have I missed anything here? What else should be considered when it comes to vendor pricing?

Review: SDI Software Solutions Day

Image from @SDIrob

I attended the SDI Software Solutions Day at the British Library last week.

In a nutshell, it was vendor beauty parade for interested buyers.

Six ITSM vendors presented an overview of their company to a room full of SDI members. SDI members had the opportunity to engage with the vendors directly and network with their peers.

I think this is a great format. It was crystal clear that if you were attending the event you wanted to hear from the vendors and what they had to say. Vendors support many events but it is rare for the spotlight to be purely focussed on what they bring to the table.

The compere and guide for the day was Ken Goff, who was very keen to stress the importance of building a list of requirements before even thinking about looking for new technology and provided some brilliant insights into the vendor selection process (more to follow over the coming weeks).

“Every product is perfect at what it is designed to do, and rubbish at what is not designed to do” Ken Goff

When the audience were asked what they wanted most from vendors – two answers stood out for me;

  • Be honest about your shortcomings and scope.
  • Deliver on your promises

The first point is particularly interesting. As a former software sales rep I am all too familiar with the pressure to say ‘Yes’ to every question asked. It takes courage and wisdom for a vendor to say ‘You know what, that’s not really our area of expertise’.

Talking of sales reps… it seemed a little unfair for ICCM to send two sales reps along to network with the audience. Strictly speaking I guess anyone who is an SDI member can attend, but it seems a little unsporting when the other vendors had taken the time to build booths and prepare presentations.

My only criticism of an otherwise very useful and informative day is that it would have been nice to hear more from a customer perspective, some vendors mentioned what their customers were doing but there was scope for a lot more. i.e. “Here is someone that was in the position as you are now, this is what they did, these are the hurdles they faced and this is how we helped them”.

Vendors Participating:

Which ITSM Vendors Engage Online?

I was inspired to compile this list of ITSM Vendors in order of online influence after listening to an edition of the ITSM Weekly Podcast in which James West of ServiceDesk360 discussed his list of ‘influencers’ on PeerIndex.

Of all the segments of the IT market that might benefit from social networking and enterprise collaboration – nowhere is it more relevant that ITSM.

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Vendors have been ordered by their ‘Klout’, a measure of online influence. Those vendors with a higher score are more likely to be:

  • Listening to the market
  • Engaging with their audience online
  • Responding accordingly and
  • Producing good content and thought leadership that people want to share online.

I believe these principles run right to the heart of service management.

I believe it is also worthwhile to identify those vendors that are producing good stuff and listening to the market.

‘Klout’ is not 100% watertight, I’m sure there are ways to corrupt and circumnavigate the system. For example some companies might hire a top notch PR and a marketing company to provide a ‘ghost’ presence but ignore the principles at work within the vendor itself. Looking at the list I believe it provides a fairly accurate view of genuine influence – you could have a gazillion friends and followers and pump out updates every minute but still not have ‘Klout’.  It is important to note that this list also ignores some of the great work by the service management community offline.

This list is by no means exhaustive, I will add to it and expand it over time.

If you have any recommendations for changes please contact me. The table is compiled from this list. See also – Punditry

Punditry and Getting Started in ITSM

I have found Twitter to be a great source of information and updates on the ITSM industry.

As a newcomer I have found it useful to listen in on the pundits as they share expertise and opinion. There is the usual bellyaching about the finer points of ITIL, but generally it is a good source of news, humour and insight.

You don’t necessarily need to join the conversation. It is quite easy to set yourself up with a twitter account, follow the people that interest you and put yourself in ‘listen only mode’ from the comfort of your mobile device.

To help fellow newcomers looking to explore the industry I’ve compiled a list of ITSM pundits and ranked them by Klout.

The ITSM Review – Top 10 Pundits by Klout

Klout is a measure of online influence. It is by no means exhaustive but it indicates that, generally speaking, ‘the crowd’ appreciates the updates from those individuals with a higher score.

If you would like to make any recommendations for alternative pundits or changes please contact me.

Other Useful Resources