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Paying for Usage

February 17th, 2010 Comments off

From a paying for what you use perspective, paying for use of a feature or per minute of usage is much more appropriate. A big technical barrier to this though is the connectionless nature of the web. Many users log into an application, then leave their browser idle for hours. What’s the usage here? If they load a survey page, then it’s submitted an hour later – can you reasonably claim there was an hour usage? Did they spend an hour reading the questions, thereby “using” the system, or did they just go for a coffee break and come back. This varies from page to page so would be impractical to instrument.

This can be determined approximately by a combination of usage statistics, walkthroughs with users and user feedback. It would be interesting to know if there is a dollar figure per minute that purchasers consider appropriate for different types of software.

By my (very) rough guesstimate, a dollar a minute seems to be in the ballpark for general purpose employee applications. Tools such as Salesforce.com, hosted MS Project/Sharepoint and related apps are around $60/month/user and users and users probably spend around an hour a month on them. For a 360 survey, there may be 10 raters spending 20 mins each which is $200, which is in the ballpark for a high end 360 tool. For a performance management system, a user might spend 30 mins completing appraisals once each year, which would be a cost of about $30/seat/year, again in the ballpark for this type of system. Let me know if there’s any research on this.

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