Organisations evaluating enterprise architecture (EA) tools are often surprised by our price proposition and question how we can provide a world class EA tool at such a low price, but still manage to make money as a business. They seem to think there is a catch!
There is no catch, the answer lies in the unique nature of EAS’s business model, which has similarities with that of a low-cost airline. Successful budget airlines focus on the essentials (no pun intended!). They fly people from A to B efficiently, reliably and safely in well-maintained, modern aircraft at a much lower price than that charged by traditional airlines. But to make this model work, the passengers have to accept their part of the bargain: no frills in the basic offering, maximum self-help, and supplementary charges for non-standard services. With Essential we use a similar approach to minimise, or even eliminate, the burdensome costs of product sales and delivery. Our business model makes us very different from a traditional software firm.
EAS’s approach to the market does differ markedly from the low-cost airline parallel in one important respect. Over twenty years ago the firm was established as a specialised EA consulting shop, and the Essential toolkit was evolved over time as a productivity aid to support the firm’s own consulting assignments. The Essential product, therefore, reflects the real-world needs and experience of practising enterprise architects involved with a wide range of organisations. Our clients report a high level of satisfaction with the Essential Tool and also with their interactions with EAS, acknowledging them to be relevant and of high value. They appreciate being truly treated as clients and peers, rather than as transactional customers.
Minimise cost of sale
So, how does our business model truly differ? Let’s start with cost of sale, a significant and often unpredictable factor in the pricing of a software product. Unlike other vendors, EAS does not employ a dedicated sales force, our ‘sales’ people are all part of the core team and use the tool to support clients in being successful. As a result, we don’t have the overhead of on-going commission payments.
For leads, most people learn about Essential from existing EAS clients, from industry analysts, or from the EAS website, www.enterprise-architecture.org; we don’t have a dedicated sales and marketing division or a costly external agency. Importantly, people can trial and experience the basics of the product free of charge through Essential open-source. This means that many potential clients contact EAS having had first-hand, practical experience of what a basic version of the tool can offer, and hence a willingness to buy.
Additionally, we utilise self-service demonstration tools that allow people to learn about Essential without needing to speak to someone, reducing the cost of the sales process to us.
Once a client is signed-up, we can set-up a client platform in minutes with minimal effort, so again costs are minimised.
Pay if you don’t want to follow our model
We also strive to keep our procurement costs low. As with a low-cost airline, the pricing of a secure, reliable, well-performing product is based on standard conditions. If a client has special demands (for example, tailored contracts or customised security assessments), extra charges are levied for such services. No discounts are offered, other than for multi-year contracts. We will not respond to overly complex, time-consuming Requests for Proposal (RfPs) although we are very happy to engage in standard RFPs. In our opinion an RFP is no substitute for hands-on experience prior to purchase, so we offer a free POC for a short period, combined with our easy-to-use quick-start tools such as Launchpad and set review points from our consultants.
In line with the “maximum self-help” principle, we have designed our support services to be as light touch as possible, with the option to pay for additional supplementary services. If a client prefers the self-help route, the EAS website, and the Essential University in particular, offers a wide range of facilities that provide online guidance and training in the use of Essential and the approach to EA in general, as well as support for such critical tasks such as metadata capture and view development. This minimises the amount of hand-holding that clients would normally require from a supplier and, therefore, our underlying costs. Importantly, all our clients receive a free of charge consultant-led welcome meeting and an annual review to ensure they are on track in achieving their objectives, provide resources and support if they are not, and gather feedback on enhancements and suggestions for the tools continued development.
For clients that do want additional support, there are many options available, from competitively priced video-based training modules to a range of consulting packs. So, people who don’t want the self-service model, or need extra support, they have the freedom to opt for paid services.
Outsource as much as possible
In terms of back-office support, EAS chooses to outsource as much as possible to carefully selected specialised firms who provide a depth of knowledge and expertise in non-core services that would be uneconomic for the firm to replicate in-house, e.g. HR. The aim here is to minimise the fixed cost base, and to focus the firm’s own resources and management time on product promotion, development and client support.
No global offices, but lots of global partners
Finally, we don’t have expensive offices dotted around the globe. We have always provided remote support for clients that are happy to work that way and, for clients that prefer a more hands-on approach, we engage excellent partners who can support clients globally, and make use of them to service local markets.
All of this allows us to keep our price to a minimum, affordable to most organisations. The bargain – clients get a great EA Tool at a great price offered with a standardised, self-help model; if you want add-on, non-standard services there will be a charge.
We designed the Essential business to be low cost from the start, primarily so we could offer a tool that had a high Return on Investment, that fell below most RFP limits, was accessible to all without constraints, and which was a low risk for CXOs to sign-off. We’ve been profitable as an EA tool vendor for three consecutive years now, which indicates our effective approach. So, perhaps a better question might be: Why are EA tools, similar in features to Essential, priced so high?