zara technology: go to market strategy - University at Buffalo School ...

spend another $10-15K on hardware and implementation. I believe someone over there
needs to recognize that there are companies like us who want a full soup-to-nuts solution
for 10 users for $10-15K”, “NetSuite was impressive but we needed the complete version
and price quickly added-up. Over a 3-year period, we expected it would cost
considerably more than iCode. If we added more staff than expected, it's per user/per
month/year-after-year cost would outstrip a purchased license even quicker”, “NetSuite:
pretty much the same experience as SalesForce. Multiple pushy sales reps. I really
wanted to buy this software at the beginning - it looked perfect for us. But the attitudes of
the reps and the avoidance of quoting prices just made me feel I was being lined up to be
suckered”, “”the cost to add on new licenses or modules is very expensive”, “I see that
NetSuite raised their price for their "distribution" edition yet again from $399/mo for the
first user to $999/mo. Given their triple digit yearly price increases why would anyone
want to take a chance on giving the complete control over their system?”, “They have
been raising the fees to users so much each year (latest increase from $399/mo first user
to $999/mo first user)”, “I suspect that there are very few companies with 1-25
employees for which NetSuite, Oracle, SAP and the like are appropriate or economical.
Just yesterday I spoke to one of our new users who left NetSuite because it was much too
complex and because they were charging him $600 per month for one user”, “Why do
these software guys think you'll go from a few hundred dollars for QB [Quick Book] or
PT [Peach Tree] to $50k or more?”, “Why should anyone need to purchase version
upgrades, if the version they're using now works just fine? If the version they're using
now doesn't work fine, why won't the S/W Company fix the problems? These things
(forced upgrades) are just a mechanism to introduce artificial scarcity into a marketplace
to generate more income” express concerns regarding high (a) base cost, (b) additional
user cost, (c) price inflation in later years, and (c) upgrade cost. There is also concern
about lack of software ownership and future inflexibility to move to different software:
“If I buy a software package, and the vendor refuses to give me the source code or easy
access to my data at any time, then migration to a different package is difficult.”
Second issue deals with the cost of implantation/adoption of the software.
Users, particularly those not competent in IT or lacking time/trained personnel to
implement are either reluctant to adopt a system or become frustrated. Comments such
as these are frequently made: “...As do all the software companies, sell licenses at 20% of
the list and make your money on the services. The fact they would not do that sent me a
message that they are not really out there for the small business like us, they want the
medium sized businesses”, “Implementation costs had doubled and they wanted over
$16k with a possibility it could hit $20k. I was going to go ahead, but they were bookedup
till early '05. We called them early in Jan. Now, they wanted to send a new quote! It
came in at $37k not counting the add-ons we still needed. After adding those, the bill
would be $45k with more due for the 2 new seats I wanted by that time”, “You can't get
any service or qualify for the annual maintenance plan until you pass a 23 page exam
and pay them $2700 per try for a remote system-analysis performed by their engineer
until you finally pass (probably after you've spent thousands more guessing what you'll
need to fix)”, “.. they wanted $5,000 plus for unlimited support and maintenance on 10
seats per year. I am an experienced user and don't need that sort of hand holding”, “We
paid more than $100K for an iCode "implementation" and we are still not up and
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