For vendors the issue is double edged. By making it easy to try their software they may get customers that would otherwise not have chosen them as they were unwilling to commit to an up-front license cost. However pitching the price is not easy. If your software used to sell at USD 300k + 20% annual maintenance, then if you price the software at USD 5k per month you are seeing the maintenance (USD 60k a year) without the software license fee. Yet if you pitch the monthly fee too high you will scare the customers off and be back into a lengthy sales cycle. Ideally there is some way of pricing that draws customers in further as they use the software more e.g. as they add more users or load more data, gradually increasing the monthly fee. This was actually one of the clever things in the salesforce.com model - it seems really cheap at the beginning, but as you add more and more users you end up with a pretty hefty monthly bill, and can end up wondering how that would have compared to a traditional licence model. But by then you are already committed.

This is ideal from the vendor viewpoint. It is what I will term the “frog in the saucepan pricing model”. The legend goes (and I don’t fancy verifying its veracity) that if you toss a frog into a pan of boiling water it will jump out, but if you put it into a pan of cold water and slowly raise the temperature it does not notice and ends up being cooked. A pricing model that lures the end users in and gradually creeps up without anyone getting upset is certainly what a vendor should aim for. Not all software may be amenable to such gradated pricing, but it seems to me that this is the key if vendors are to avoid SAAS being the “maintenance but no license” model.

Every major company I talk to struggles with getting reliable enterprise-wide data, and in every project I have been involved with, the data quality in corporate systems is worse than people think it is. If the current tough financial conditions prompt a new focus on fixing these issues, then indeed perhaps there will be a modest silver lining at the end of the credit crunch cloud.

For more information or to download a complete copy of the brochure, visit: www.tdwi.org/neworleans2008

Register before October 4, and receive an early registration discount, if you use this code when booking.

Priority Code: IN34

By early November it is nearing the end of hurricane season, and you can take advantage of New Orlean’s famous easy-going atmosphere and fine music and cuisine (at least after you have finished the workshop sessions). You may even learn something.

Hope to see you there!

It is good to see venture firms dipping their toes back in the water of innovative enterprise software companies. A couple of years ago I came across what I thought was an interesting data quality company called Zoomix. I introduced them to a prestigious venture firm, who were entirely uninterested, at the time chasing after ever more trendy social networking websites (the company was in fact bought by Microsoft a few months ago, which would have netted a pretty decent return for the investors). Although the enterprise software sector is not exactly booming, there is still room for astute investments in differentiated technologies.

Indeed in talking recently with data quality vendors, a number have commented on how the increasing profile that data governance is getting has enabled them to, in turn, get a higher profile. Previously data quality was seen by many companies as strictly something for IT or those direct mail geeks in their marketing department, but now data quality is getting an airing as part of broader initiatives to improve data across the board.

In order to put more flesh on the data governance bone, The Information Difference is conducting a major piece of primary market research into data governance. You can be part of this by taking the survey Completed surveys will receive a full copy of the research, and there is even a prize draw with exciting and valuable prizes (this view may depend a little on your taste) to tempt you.

For a more in-depth view I strongly recommend the book Smarter Ventures by ex-journalist Katherine Campbell, now herself in the private equity business.

Later in the year the Information Difference will conduct some research amongst MDM vendors to see how the predictions from analyst firms such as Forrester and Yankee are stacking up to the reality of a tricky economy.

In this case the R&D team will move into the Microsoft technology centre already in Israel. This is a logical move by Microsoft, who acquired Stratature in order to give them an MDM capability. This product is currently being retooled under the code-name Bulldog, and a data quality offering to complement this is a natural fit. The timing around Bulldog’s release are unclear at this point, as it is folded into the SQL Server release timeframe.

There doesn’t seem to be a place where this kind of information is gathered together but there is now.

http://www.informationdifference.com/vendor_technical_details.html

This also has information on the level of SOA support (if any), which non-English languages are supported in the user interface etc.

Generally this has little impact, but a lack of exit opportunities is a poor thing for the enterprise software sector in general, as venture capital firms are less likely to invest in earlier stage firms with one of the two exit routes (the other being a trade sale) closed. Initiate had made excellent market progress with its MDM technology, and it would have been nice to see a pure-play MDM vendor going public.