Thoughts on Increase 2008 hosted Microsoft CRM price plans

While we're having fun testing the latest "Titan" build and looking forward to the launch of Microsoft Dynamics CRM 4.0, we're also planning our new pricing plan for 2008.

Today, our pricing plan is a flat fee + user fee. The flat fee is our hosted infrastructure fee and covers the costs of the data centre, network, security, servers, operating system licences and administration, database licences and administration, bandwidth, storage and database backups. The user fee is our hosted Microsoft CRM subscription fee and covers the cost of the Microsoft CRM licenses as well as our CRM support, training and system administration services.

Most other hosted Microsoft CRM service providers and others such as salesforce.com charge a flat fee per user. Although we've tried to keep our plan simple, being a little different can make our offering seem more complex. But we think it has the added advantage of being less expensive to add additional users compared to our competitors. At 10 users our fees are the same as salesforce.com Professional Edition (£750 per month), but user #11 costs £50 with Increase CRM and £75 with salesforce.com.

I invited some of my LinkedIn network to provide their input, and sparked an interesting debate. (http://www.linkedin.com/answers/technology/enterprise-software/TCH_ENT/111207-9701572).

Microsoft is set to announce pricing for Microsoft Dynamics CRM 4.0 at the Convergence conference in Copenhagen in a couple of weeks. The new price list will include new SKUs for CRM on the SPLA program, which we're really exited about. We're hoping for a lower cost user licence, a read-only user licence, an External Connector licence, and other improvements. But we'll have to wait and see.

Based on the announced prices, we'll be announcing our 2008 price plans shortly afterwards. At the moment, I'm leaning towards scrapping the infrastructure fee and introducing tiered user fees. For example 5 users for £75 per user, users 6-25 for £60, users 26-75 for £50 and so on. This reflects the reality of some fixed infrastructure costs for small deployments, and the economies of scale of larger deployments. I'd love to hear your feedback.

NB