Open Source Pricing Incentives and Business Strategies: the GroundWork case

About three months ago GroundWork announced the availability of GroundWork Monitor Starter Edition, a cheaper edition designed to establish a position at the lower end of the market and yet educating users to trade money to save time (as MÃ¥rten Mickos docet).

I asked David Dennis, senior director of product marketing at Groundwork, to keep me updated about the initiative, below some answers on the topic of GroundWork Monitor Starter Edition.

David, could you give us a little background about the Starter Edition?

We originally launched on April 30, 2009 with a limited time offer making the Starter Edition available through July 31, 2009. At that point in time, the Starter Edition was an experimental offering designed to address smaller

environments and smaller budgets than our Enterprise product. We had data indicating there was demand for such a product, but until a product is actually released, one never really knows.

Since that time, demand for and sales of Starter Edition has been sufficiently high that we will be making the Starter Edition a regular part of of our product lineup going forward.

Can you disclose any information about the regional breakdown?

The regional breakdown for Starter Edition sales in Q209 (partial quarter given Starter Edition was launched April 30):

20% – Europe

20% – Asia Pacific

60% – North America

This aligns fairly closely with the regional sales of GroundWork Monitor Enterprise (65-70% North America, 30-35% outside of North America), so at this point we haven’t seen a big difference in regional demand for the Starter Edition compared to Enterprise.

Starter Edition sells abroad are slightly higher than through the classical sales channel. I am wondering if this could be a different or complementary “ice-breaking” technique to get into new markets. Commercial open source editions that can be deployed with internal resources are well suited for this selling technique.

Did you discover anything new about your customer base?

Interestingly, we had some customers buy more than one Starter Edition, which was a bit of a surprise to use. Some Starter Edition customers had multiple, small, autonomous geographic locations for which they did not need to have a comprehensive roll-up view at the top (GroundWork Monitor Enterprise plus Child Server(s) lets you roll up data to a parent server at the top of the tree). Because each geographic region was completely autonomous, of modest size, and didn’t need to combine data with other locations, these customers bought one Starter Edition for each location.

Nature (and customers), finds its way, indeed! Is the Starter edition helping with up-selling?

A number of Starter Edition customers are interested in expanding the sophistication other their usage and have inquired about GroundWork Monitor add-ons such as the SuperVisions version of NagVis for GroundWork.

Special pricing incentives are a sign of change, and yet a valuable tool to better understand your customer base. GroundWork is receiving interesting feedback, actually its customers demand for more flexibility in the buying process. Let’s see if and at which extent they will affect the evolving GroundWork business strategy.