About the client
Our client is a provider of cloud-based software applications for marketers in various industries worldwide. The mid-size company is keen to tap into the software applications ecosystem with a new feature-enriched product that promises to enhance overall user experience. Before that the client wanted to assess at what price points the product is likely to be most attractive for customers in different geographic regions while being commercially viable for the company. The client spent a while researching various market intelligence offerings but doesn’t seem to have found a broad-gauged solution. Soon, the company turned to our experts for assistance in understanding and decoding the price dynamic in the software applications market.
Business situation of the client
Enterprise software applications are typically bought and sold based on the specific business requirements of end users. This is a highly customized market with very few standard packages and predefined product features. Therefore, drawing “apples to apples” comparisons between products simply based on their price labels is a difficult if not impossible task.
To develop a better understanding of the price competition in the enterprise software market in Europe, Middle East, and Asia, the client decided to engage with our market intelligence researchers with years of core software expertise. The key deliverables from our team included:
- A comparison of the key features of the top-five competitor products
- Identification of market prices of key competitor products
- Detailed examination of competitors’ pricing plans and discount pricing strategies
Our market intelligence solution for the client
Having received the go-ahead from the client, our market intelligence specialists began an in-depth study of pricing trends in the enterprise software applications market in Europe, Middle East, and Asia. To have a firm grip on the approach to setting product prices, our team held multiple interviews with a large cross-section of respondents from large and mid-size software vendors and their retail customers in the target regions.
Our report confirms some of the key aspects of the enterprise software market. For instance, customers in the enterprise applications market hardly ever shop for packaged solutions. Rather, they are likely to look for custom software tailored to their specific business goals. The study also reports that products come with varying pricing plans (e.g., monthly or yearly subscription, one-time upfront payment) and these are, more often than not, subject to further customization and negotiation. The final sum paid by the buyer depends on the number of hardware systems and retail outlets as well as the volume of customer data and retail transactions.
Concise descriptions of popular pricing plans in enterprise software markets also form part of our study. Broadly, these pricing plans are (a) monthly/quarterly/annual subscriptions-based plans with free maintenance, upgrade, and technical support; (b) perpetual or one-time payment with no additional monthly fee; and (c) SaaS pricing based on the number of licenses or user accounts with maintenance and support all included. The study presents a shortlist of five enterprise software vendors from each of the target regions based on their market share, share of users, and number of retail customers. Vendors who made it to the list also boasted a strong regional presence. The report includes average prices for the top three vendors and a detailed breakdown of these prices into components (e.g., base price, premium add-ons). There is additional information such as the number of active users allowed per software package and the number of stores and terminals the solution can potentially cover. Furthermore, the report proceeds to gauge the relative strengths and weaknesses of five of the leading enterprise software platforms, and this competitive assessment covers two basic features and seven premium add-on features of these offerings. The report is tightly written and easy to read, with brief business profiles of the shortlisted software vendors, a diagrammatic breakdown of their solutions, and a list of other software providers as well all baked in.
Our market research experts helped the client gain a deep and accurate understanding of how pricing influences the market behavior of enterprise software buyers in different target regions. Client teams are using insights gathered by our research to shape their pricing approach with a view to capitalize on new growth opportunities in the near future.