For example, when purchasing analytics - how many seat licenses do I need, and how do I ensure adoption by these users that will that result in value I’ll see over the course of the year? For data integration buyers - how do I create a data fabric that can evolve and grow when new sources and targets appear from thin air? When the CFO is looking for budget control and predictability, not being able to clearly show value makes it hard to justify budgets year after year.
Quite frankly, this isn’t really the best situation for Qlik either. If adoption or value is hard to measure and prove, it creates more churn and puts the internal champion in a tough spot – go with less or have their next purchase recommendation put under a microscope. In a market where every dollar and moment counts, this can create real disruption and distraction for both customers and vendors.
Thankfully, there is a better way forward – capacity pricing. Capacity model pricing makes so much sense because it puts the emphasis on valuing data. The real value an organization gains through data integration and analytics inherently comes from the data that is moved and analyzed. When you move away from measuring value based on the number of users or source/targets to capacity, you are aligning with how a customer creates benefits from your solution. Our in-depth research and conversations with customers and prospects clearly support this approach. By selling based on the value of the data with simple tiers of capabilities, customers get to experience the full power of a solution, so everyone in the organization benefits.
So, you might ask why capacity vs. consumption? It really comes down to predictability. The consumption model looks attractive at first since initially it is lower cost. But it requires a lot of management from the customer in monitoring and adjusting, and once adoption takes off, the costs quickly get out of hand. For Qlik, we want to be up front with customers and give them a predictable cost structure and path forward that fits their needs. This gives them the flexibility to use whatever capabilities they want and more easily try out new use cases before incurring additional charges.
Today Qlik is taking its first steps in this direction by introducing capacity model pricing for Qlik Cloud Data Integration. This new way of purchasing Qlik Cloud Data Integration ties directly to our belief that everyone should be able to use data and analytics to inform better actions. By tying our pricing to how data is being moved and used by our customers, we’re removing the adoption barriers inherent in a license-based model. Instead, we’re putting the emphasis and focus on partnering more closely with customers to support their data needs and truly increase their ability to drive more value from data.
This is a big (and positive!) change to how customers and prospects can purchase Qlik. We’ve been working through all the different aspects carefully and diligently for quite a while to make sure we get it right. We’ve designed this change based on input from customers and prospects, external SaaS pricing experts, Qlik partners and employees as well. We believe this will fundamentally transform the way that we interact with customers and partners, shifting the conversation every day to how we can continue to deliver value. We will not be forcing customers onto capacity pricing, and we’ll be adjusting models over time, so we’re excited to hear your feedback so we can best fit your needs.
We’re starting with data integration because we’re hearing from customers that they are eager to have more help in shaping their cloud data strategies. With data sources and targets increasing daily, customers want to connect more of the right data to downstream systems and analytics use cases. With capacity-based pricing, data integration customers can benefit from the full capabilities of Qlik Cloud Data Integration, opening up new use cases in the cloud in a way that scales easily and matching data strategies to overall business strategies. And as customers see increased value from how Qlik Cloud Data Integration is deployed under the new model, they can make the business case for more capacity tied to business needs and outcomes.
We are planning phase 2 of this approach for later in 2023, where we will introduce capacity-based pricing for Qlik Cloud Analytics, taking the same diligent and thoughtful approach to ensure we’re matching pricing with value.
We’ll be talking more about our capacity model pricing evolution throughout at QlikWorld, we hope you come by to learn more and share your thoughts!