ERP Pricing Models

ERP vendors don’t make it easy to calculate the cost of using their system. There are lots of variables to consider including:

  • License – buy a perpetual license to use the software
  • Hosted – annual or monthly fee to use the software by user
  • Named user – for anyone needing any access to the system
  • Concurrent user – for the number of people needing access at the same time
  • Full users – need multiple parts of the system such as a purchasing manager
  • Light users – need limited use of the system such as someone that just creates requisitions or enters their time or uses a handheld or needs read-only access
  • By module – each module is priced separately by user
  • By system – you get all modules whether needed or not

Our approach is to give the vendors all the variables they should need. However in the end, the costs really depend more on market conditions and how strategic/important the client is considered by the vendor.

3 thoughts on “ERP Pricing Models

  1. From the vendor’s perspective the issue is finding ways to assign value to the solution that is being sold, while at the same time offering some differentiation in the market. Developing and Maintaining an ERP solution is expensive. The people you need to hire are not minimum wage workers and they need years of experience before they are productive. That means you don’t even start to make money selling an ERP solution until you have a sizable user base.

    In today’s world you need to be offering a range of licensing models from the Traditional perpetual license right through to the SaaS model, regardless of the model, you still need a means of assigning value so that as a vendor there is sufficient cash in the equation to sustain continued development of the software.

  2. You missed a pricing model – unlimited users! One monthly subscription fee covers it all, without the complexity of concurrent or named user licenses. Plex subscription supports unlimited users and machines for your enterprise as well as all of your customers and suppliers.

    Hemant

    http://www.plex.com

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