Cloud ERP & Pricing Strategies

In the world of Enterprise Cloud Technologies, there are two main pillars: Product Development and Technology Consulting. Each comes with its own unique pricing strategies that shape the way businesses operate. Let’s break them down.

Product Pricing

Flat Rate Pricing: This is like a nostalgic trip back to the early days of software. You pay once for a specific set of features, and that’s that. If demand for your software explodes, well, sorry—you won’t see those extra profits rolling in. A classic example is Parallels, which offers a “one-time purchase” option. You get what you pay for, and that’s the version you live with. Future updates? Those are not part of the deal, unless you want to pay again. Think of it like buying a car—what you drive off the lot is what you’re stuck with, no matter how many new features the next model has.

Pay-As-You-Go: This is where things get interesting, especially in cloud-heavy environments like Oracle Cloud Infrastructure. You pay based on how much you use, whether it’s transactions processed, memory consumed, or tokens spent. It’s like having a pay-per-view movie marathon—you only pay for what you watch, but if you end up watching all the movies, make sure your bill doesn’t look like a mortgage payment! This is where services like Orbrick’s SAGE help to optimize usage by analyzing license consumption and usage patterns.

User-Based/Seat-based Pricing: This one scales based on how many people in your organization will actually use the software. You’ll see this in tools like Microsoft and Oracle Enterprise applications, where you can buy individual or business plans depending on how many seats you need. I often deal with Enterprise Performance Management systems, where my clients are highly specialized teams—like FP&A or Risk Management, with maybe 30 users per department. They usually go for an enterprise plan for 100 users, covering 60 actual users, some IT and admin accounts, a couple of testing logins, and some room to grow. Of course, some organizations will try to “economize” by sharing logins, but as product creators, they know all the tricks to prevent that from happening (or at least make it super annoying).

Hosted Employee Pricing: This model is not just for HR systems (though it fits well there). It’s designed for scenarios where the number of users is not the main cost driver—instead, it’s the number of entities or records being managed. Take an HR system as an example: you might have only 40 HR team members logging in, but the system is tracking data for 5,000 employees. Hosted employee pricing means you’re paying for the number of employees being managed, not the number of users logging in. This model works in other areas, too, like customer management platforms, where you might be tracking thousands of customer records but only have a handful of active users. The bigger your database, the bigger your bill.

Land and Expand: The bait-and-switch of the pricing world. You start with a low entry price to lure the customer in, and then once they’re hooked, you start selling them more. Think of it like offering someone a free sample at the grocery store, and then walking them through the entire frozen food aisle. Before they know it, their cart is full. This strategy creates deeper relationships and plenty of cross-selling and upselling opportunities. If done with the right intent, this could also be a great way for both product and service firms to showcase their quality and build trust before more work is taken on.

Captive Pricing: Here’s the trick—you offer a low base price for the core product, but the necessary add-ons are where you make your money. It’s like buying a printer for cheap, only to discover that the ink costs more than the printer itself. The customer is locked into your ecosystem, and suddenly, the line from Sholay, “ab tera kya hoga Kaliya?”, starts making a lot of sense. They’re your captive audience now, and every future purchase flows back to you. Think printers that only work with expensive ink cartridges that are sold only by the printer manufacturer!

Sliding Down the Demand Curve: This strategy capitalizes on early adopters. When your product first hits the market, you price it high. Over time, as newer versions come out, the price drops, making the older version more affordable to a broader audience. It’s like when the first edition of Harry Potter came out—people paid top dollar for those copies, but as time went on, paperback editions were everywhere, and suddenly, that once-exclusive price tag looked a lot more approachable. This is also known as Price Skimming.

License Subscription-Based: Pay per license on a periodic basis.

Service Pricing

Time and Material: This one’s all about billing for every hour worked. Simple and transparent, it’s perfect when the scope of work is as fluid as your coffee consumption. If the client needs flexibility, this model allows them to adjust as they go.

Cost-Plus Pricing: It’s as straightforward as it sounds. Take your costs, add a 15% markup, and call it a day. No frills, no surprises—just good old-fashioned math.

Fixed Scope Offering: When the project’s boundaries are well-defined, you go with a fixed price. Any changes along the way are handled through change control, and yes, they come with extra costs. It’s like ordering a set meal at a restaurant—if you suddenly decide you want extra fries, don’t be surprised when you see them on the bill.

And now here’s where things get creative. Orbrick Consulting has some unique, well thought out pricing strategies which are not designed to extract the most consumer surplus. They are tailored to their customers’ needs and also show Orbrick’s confidence in their consulting quality.

At-Risk Pricing: This is where the real gamble happens. You agree on specific KPIs at the start, and payment only comes if those KPIs are hit. If not, no dice. It’s like agreeing to pay your personal trainer only if you lose those 10 pounds—no results, no payment.

Pay If You’re Pleased: A portion of the payment is held back until the client is truly happy with the service. It’s the ultimate satisfaction guarantee, but you better believe you’re working hard to keep that client smiling.

Subscription-Based Consulting: Clients pay a monthly subscription for a team of consultants, and the exact nature of the work is flexible within a pre-agreed scope. It’s like signing up for Netflix—you pay a flat rate, and what you watch is up to you.