Software vendors don’t like so much publishing their prices on the web site. They will explain they have a very complex price list, or can be very creative justifying why they can’t. But to make a long story short: they just don’t want to. I don’t see the value for the client to hide the price. And that’s exactly why they don’t like to show it.

I can’t say there is a significant wind of change, but these days, several people have been arguing that Commercial Open Source Software (COSS), at least should publish their pricing.

Anyone who spent some times in countries located into the Middle East knows there is no price written in the bazaar. (By the way, it is funny to read into Wikipedia that “The word derives from the Persian word bāzār, the etymology of which goes back to the Middle Persian word baha-char (بهاچار), and meaning "the place of prices"”. Ironic, isn’t it?). And business is business so what works for Bazaar works also for other businesses, and, more important, that's where business was invented, a long time ago.

First Bazaar's Principle

As usual, the vendor is doing is best to sell to the buyer the highest price possible. Of course no vendor will admit it, but that’s basically the reason why you don’t have prices available. Hiding the pricing helps a lot. It is really a great rule; everybody will pay its “custom” price. That’s great. The more you are ready to pay, the better the margin will be for the vendor and the buyer will just pay the price he decided to pay. Everybody’s happy. You usually learn that basic principle during your very first year of sales, wherever you work.

Second Bazaar's Principle

There is another (excellent) reason: people are not logic, they have emotions. They can be influenced. So they can change their mind and can adapt their budget accordingly. First you attract them, and then you try to convince them. Some people may not be interested into an expensive product first, and then would change their mind finding it finally to be the perfect match for their project.

But is it the perfect business model?

There is no perfect business model, by definition. But there is a basic principle into business: you have to be consistent if you want to be understood and to convince, it helps to be understood. As I am too a believer there is no “open source companies” but only open source projects, I would not say COSS need to publish their prices. That said, transparency is a key value of open source, so it is very consistent to publish the prices for that reason. That’s also why people will be looking for with COSS. Some will say there can be no transparency in business, fair enough, but at least there can be some transparency in the public price, which is already a lot.

Further more, I hate losing my time, like everyone, but as a COSS vendor, I am supposed to be more competitive too. COSS are supposed to be cost-killing solutions. So I cannot afford losing my time, and that’s a fact, sales model of COSS pretend to be more effective (Optaros’ white paper, page 6). For one client who will change his mind on his budget (assuming he not only wants but also can), how many will just knock at the wrong door, dreaming of a software too expensive for their budget? The second principle of the Bazaar is not consistent with the COSS argument of having more competitive sales.

So why does a vendor publish his pricing?

Because he believes it is a commercial advantage.

Publishing prices means renouncing to the Bazaar's Principles. It means something; it is not just a detail. So don’t expect high discounts with the vendors (otherwise they would be fool publishing too high prices), but expect them to believe in transparency and openness. Like in any business, you can ask for discounts if you are ready to buy something unusual (volume, volume, volume - mainly), but, obviously, you cannot ask simultaneously transparency and high discounts. As you know the price since day one, it is consistent.

We are almost in 2010, the software industry is a worldwide vibrant B2B business, so maybe it is time to renounce, for good reasons, to the so old Bazaar's Principles. Further more, open source is more and more adopted by global companies. Their projects don't like surprises and are allergic to aggressive commercial behaviors. Anyone who will take a few minutes browsing the web will find a good estimation of the software pricing thanks to the Searches/Social networks/Analysts reports. Why hide something easy to find out? Last and not least, every vendor should be able to justify its pricing and be convinced it is the perfect price. There is no such a (good) thing than a vendor believing into his pricing.

So, buyers, what do you prefer? Are you keen giving an advantage to the vendors not hiding their pricing? Or do you still want to be the next victims of the Bazaar's principles?