PeopleSoft eyes new CRM licensing model

By Bob Trott, InfoWorld |  Software

WITH THE RELEASE of the latest version of its CRM (customer relationship management) software, PeopleSoft has changed the way it sells the product to a value-based licensing plan.

The company made a move this week away from using seats and servers to determine how much a company pays for its PeopleSoft CRM suite. Instead, license terms are now based on a number of business metrics and according to the customer's size.

"In today's world it's difficult to employ a per-seat license when there are open solutions on the Internet," said Robb Eklund, CRM marketing vice president at PeopleSoft, in Pleasanton, Calif. "Our approach has been one where we want to assess the license based on the utility customers derive from the applications."

Value-based licensing

PeopleSoft has changed its licensing model for CRM products to rely on a set of business-oriented metrics.

* Number of employees

* Annual revenue

* Operating budget

* Assets under management

Source: PeopleSoft

Although the move is a first among heavyweight CRM vendors, value-based licensing is not new to PeopleSoft. Before entering the CRM fray with its acquisition of Vantive in October 1999, the company had sold its other software applications using the same scheme and is now bringing PeopleSoft CRM in line.

PeopleSoft is assuming that "the size of the company is a better determination of the value of your Internet relationships than just how many CPUs it happens to run on," said Erin Kinikin, an analyst at Giga Information Group in Santa Clara, Calif. "It seems that this pricing appeals to customers who are ready to make an enterprise-level investment."

Marketing automation vendors have used the value-based licensing, whereas CRM vendors have typically relied on models that have depended on the number of employees and an approximate number of Internet users -- often a very difficult number to determine.

"Essentially, it's another way of getting at a site license and not worrying about which machines the company is installing the software on, [which means] less administration," said Sheryl Kingstone, program manager for CRM management strategies at The Yankee Group in Boston. "The problem with site licensing is that it's usually out of range for most companies due to its high cost."

Eklund said the licensing scheme would rely on auditable factorsto arrive at final pricing. Contingencies would also be built in to evaluate the license if the customer grows.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Spotlight on ...
Online Training

    Upgrade your skills and earn higher pay

    Readers to share their best tips for maximizing training dollars and getting the most out self-directed learning. Here’s what they said.

     

    Learn more

Answers - Powered by ITworld

ITworld Answers helps you solve problems and share expertise. Ask a question or take a crack at answering the new questions below.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question