New Licensing for Kentico CMS 5.0

Hi all,

I have just posted the new Small Business licensing at

http://devnet.kentico.com/Blogs/Petr-Palas/November-2009/Kentico-CMS-Small-Business-License---Pricing.aspx

as an answer to your comments. I hope it will be helpful.

Petr Palas, Kentico

I think all the posts on this page demonstrate that there is real support for your excellent product. It is however a regrettable that such a well architected system is being threatened by an ill considered, over complicated and restrictive licensing regime.

I agree with Greg's model and posted something similar on the survey page. I also proposed that some modules were optional parts of teh server package (such as staging) and other were optional parts of the site part of the package (such as ecommerce and some social features).

We too have designed a packaged product around Kentico. Based on a small number of projects we took the decision to build some internal skills and other resources and approach customers with our package. We had a very favourable response but the economics of it don't stand up any more under the current pricing model. I hope we can work together to get to a price point that makes sense.

Hi Peter,
You commented that 2K was not much when the budget is 10-50K Except we're dealing in Kiwi dollars not US dollars, so instead of 10% of the budget, the CMS becomes 20% of the budget or, most of the time, considerably more than that (the Kiwi is at an all time high right now). At the <20K end of the spectrum, where most projects exist, this is simply not viable. I LOVE Kentico and seriously think it gives all of the open source refusniks something to shut up and take note of, but I'm not going to be able to sell it into the company on the new model.

Hi Petr,

Posted this to the Small Business suggestion Blog. See if other partners agree to this type of model...

The model we are trying to achieve is for us to push Kentico as our primary CMS offering. We have built the hosting infrastructure, and acquired design resources, development resources, training resources, and support resources to provide an awesome small business website offering. Our goal is to have the ability to scale across servers as we need to, but have a predictable cost over the long term and allow us to recoup our licensing fees within 2 to 3 months from the monthly fees we charge our customers. I am looking to you to provide some type of licensing scheme that fits within a SaaS provider model. So we would pay a flat annual site license to allow us to manage server requirements depending on the customer, but then we would pay you one-time fee per site, or a very low annual fee per site. We would look to you to provide the full feature set under this licensing scheme. This would simplify your application and our business offering so it is less complicated to support. So here it is in a nutshell, what we are asking for:

1. Multi-Client Shared Hosting Site License: $10,000 per year (or tiered based on feature set)
*allows an unlimited number of servers to host sites for an unlimited number of customers as a base for paying the licensing in #2 (Per Website/Customer). However, no server farming allowed; meaning, if a single site/customer required an additional server above and beyond their existing install in our shared environment, this would require your standard server/web farm license. This license Includes annual maintenance and support for our organization only.

2. Website/Customer License: $500 site (installation of Kentico, not per domain)
*This is in ADDITION to the hosting license #1 above. Every site/customer we bring online, we pay these fees. This gives you additional revenue over the long term and more importantly, puts your product into the hands of small businesses for a future conversion to a bigger license.

I hope this makes sense to everyone. I don't know if this pricing is what you would work with, but I think this type of model would work perfect for us and most web agencies. Again, what we are trying to accomplish is rapid growth and agility. This type of scheme will get us there because we would have an annual commitment to you, and we can sell the sites a lot easier this way, which translates into more volume and higher conversion rates onto the Kentico engine. For you, you get annual revenue and you get paid when we get a contract. If we were to sell and host 1000 sites over the next 3 years, under this model, you would receive $30,000 in hosting license fees and $500,000 in site/customer fees. Contrast this to us just taking our existing 2 server licenses and taking them as far as they will go and then going with another CMS down the road or writing our own to fill our customer’s needs. Thoughts?

Petra

I am a small business owner and my website is currently powered by your CMS solution through one of your channel partners.

I have read all the posts stated here and let me first say I am happy that your company is willing to allow this type of dialog to be visible to both end users and partners alike. Thank you for your transparency.

As a 13 year veteran of the value added reseller channel for software companies like Sage and Microsoft, I can appreciate the opinions being expressed by your partners, but I also understand your business model and how high the costs to support many, smaller profit contributors can become a burden. I assume this is at least partially the motivation for Kentico in seeking to capture larger enterprise clients.

In my opinion and experience, this will inevitably result in the consolidation of your channel to fewer, larger partners and ultimately may translate into reduced technical support costs for Kentico. However, you are also inviting more politics into your channel negotiations because of the increased partner leverage you will be creating. As another commenter noted, you will be forced to improve your pre/post sales support to the channel which may erode any temporary technical support cost savings.

So why is it that Kentico feels so compelled to go after the Enterprise space at the expense of the Small Business Community? Is there no lesson to be learned from companies like Intuit?

In reading the comments from your blog, it would seem that you have an audience all to your own in the Small Business space where owners, like myself, desire options other than open source/do it yourself. I would urge you to consider some licensing/pricing alternatives that will continue to support your channel partners who service small businesses such as mine by sharing costs across many small business customers.

At the end of the day, if my web partner can continue to deliver to me the value I currently receive, I will remain open to whatever platform they select as a means in accomplishing this end. But I would prefer not to be forced into a change and would rather be assured that Kentico CMS is a platform that will meet my web needs as my company grows.

This feedback is amazing. I thought I was the only one.

How about diversifying your revenue stream with some training and some certification programs. In addition, how about focusing more on the web part store - do what Apple has done, create the "preferred" eCommerce store for web parts and take a portion of the licensing fee.

Maybe you can scale the server price based on individual site licenses. Base costs "X" and each site on the Base costs "Y". That way the Server folks can ration their initial investment. If someone has 30 sites running then they can pay "more" than someone who has 10 sites. (Okay don't shoot me fellow partners) but what about limiting every server to "X" websites. Say 100 websites per server.

I would also recommend a tiered SLA for support. These prices are steep but I see both sides of the coin. Just wish there was a more tiered approach to pricing. That 30% is a big whack of money.

Just some random thoughts. It will all work out that's for sure.

Keep up the great work...

-Neil

Elijah, last year there was no need for the Small Business License, since most agencies could use the server license to cater to their small business customers. And many agencies built there business model around this possibility over the past year or twowhich is the main reason for this crisis here.

There is a real need for a multi-client license. Let it be 10 sites or 20. And let the agencies decide what they do with these 10 or 20 "seats".

Petr, you try to get a cut on each Kentico site that sees the light, but on many many sites there is no cut to make, but agencies take these jobs likewise, be it to gather experience, be it to keep staff busy or be it for a good cause.

All the single-client license model does, is creating an enormous frustration.

I see you point in price increases and I see your point in eliminating the unlimited license. But you also need to understand how agencies work and that an overly restrictive (and cumbersome) license model does not work for them.

To Gary: We are looking for a model that would make this possible for both you and us. We are getting some interesting suggestions from our partners who submit the Small Business License survey.

To Elijah: Thank you for your support! Last year, there wasn't much interest, but this year we receive lots of suggestions, so we will sure follow this feedback. The more partners provide us with their ideas, the better we will match the Small Business license to their expectations.

To Sidath: if we introduce $1,000 Small Business License that you could combine with E-commerce package ($1,499), will something like $2,499 before discount work for you?

It is obvious that the 'large end-user' who can afford a $100,000 license was the impotus for the price increase. You would be losing money in this case. However, CMS is being introduced to the masses through many different offerings, including Joomla, Drupal, Business Catalyst, Graffiti, Konductor, etc. Kentico is among them, but what's different about Kentico is platform. As an ASP.NET developer I appreciate the opportunity to use your product and I am able to provide the management of the product within my skillsets. The customers that use Kentico are the same users that would use any of these other solutions that I mentioned. It just so happens, that I am pushing Kentico. So really the pricing is not my concern, as much as the fact you took away the ability to host multiple clients with a single license. This makes it absolutely impossible to tap into the small business market. Again, these consumers of CMS would never pay these large licensing costs. I was able to smooth the barrier to entry by utilizing a server license for multiple clients, but now this rules Kentico out for the long term. You really need to account for this market segment - they are not your competition. These are not customers that would be buying your web farm licensing - however, they could become those customers one day. We are simply hooking them by giving them the featureset for a low price. Eventually they will want to bring the licensing in house. Then you would make your additional revenue. You are missing this opportunity - learn from Microsoft. They did this with their MBS product line - hooking the customer with Small Business Financials and then moving them to Great Plains. It's a customer for life approach. We are your evangelists and have it in our best interest that our clients use Kentico because that's the platform we want to use - for small to enterprise. Please give us this opportunity.

Thanks.

I'm not sure who all remembers this, but we did this same thing last time. People complained, Petr listened, and he put up a form for us to help design a "Small Business" license.

But not enough people helped out by filling out the form.

This time, fill out the form and let Kentico know this is a real need. If we do not, then don't be upset when nothing happens. Be part of the solution.

http://devnet.kentico.com/Blogs/Petr-Palas/October-2009/Small-Business-License-for-Partners.aspx

I can understand the price hike with the new version 5.0. But unfortunately it looks like we won't be able to afford it anymore with our target market. The current pricing for version 4.1 with ecommerce($1999) is perfect for us, with the new pricing it's $3498, which is definitely going to put us off.

For the moment we've implemented kentico for our clients at least 5-6 projects per year.

I'm in doubt now.

To Dom: As I wrote above, selling $999 license is not very profitable for us, which is why we are increasing the entry price. Still, we should be able to offer lower price with Small Business license that would be available only for partners who generate repeated business.

Regarding support: I agree with you, we can improve the documentation and help our partners shorten the learning time. That's why we have just hired another Technical Writer and why we hired Thom Robbins who will create video tutorials for both end users (that you can use to train your clients) and for developers (that you can use to help your developers get started more quickly with Kentico). I understand your concerns about the 24 hour response time, but that's why we are enhancing our support team - we want to be able to actually answer the questions.

Regarding expansion: there are two benefits for partners:
1) Higher credibility of the CMS to your end clients since they can see the company is located in your country.
2) We will be able to do local campaigns and increase the visibility of Kentico on your market which generates leads we can refer to our partners.

I hope it makes a better sense now.

To Anthony: The cloud license will be available also after 5.0 release and the price ratio between web site and cloud license will be the same as it is now. The reasons why we do that haven't changed. Will it work for you if we make the Small Business License and allow its deployment in the cloud hosting without extra fee? This shouldn't be an issue for us since it will not compete with our higher licenses for larger projects.

Petr,

If you're profitable, why the need to hike prices like this? Why not reinvest your profits in your growth? It seems crazy to me that you have a successful pricing model which is driving high growth and profits and yet you want to change it. Surely if the current pricing model works you should keep it and gain more market?

Regarding expanding support: I bet you could cut your support costs in half by improving documentation. Your market are people who are used to looking through documentation for solutions and would much prefer to find an answer in the documentation than wait for a support response. And you know what happens when companies grow and committ to 24 hour response times. The first response always says please provide more information.

Another question: how will your expansion into new markets generate leads for existing partners? Surely you plan to do it the same way, by selling into new web agencies in these territories. If you plan something else which helps existing partners, please can you explain.

So I can't agree that these investments (funded by customers) are investments that everyone will benefit from.

Sorry, that's what I meant - You don't have control over the numbers of servers but it's essentially the same as you don't manage the servers + you don't care about the numbers.

Petr, Can you tell me whether we can use Web site licence for cloud or are there any changes in this respect for 5.0?
And will the Cloud licence be available after the 5.0 release and what about the price?

To Tony: I'm not saying we will double the prices every year. I'm just saying that the prices may change. We are looking for some way how to keep the entry price affordable for small partners. You're invited to suggest your solution here: http://devnet.kentico.com/Blogs/Petr-Palas/October-2009/Small-Business-License-for-Partners.aspx

To Anthony: You're not correct, the cloud hosting license is not required when the servers are managed by someone else. It's required if you're using cloud hosting service where you do not have control on the NUMBER of servers and I explained the reasons in this blog post: http://devnet.kentico.com/Blogs/Petr-Palas/July-2009/Kentico-CMS-Licensing-for-Cloud-Hosting.aspx

I am not happy with price change however all of you are missing one point : Cloud Hosting License for Unlimited Web Sites Social Networking Edition

We may be able to host unlimited number of sites for small-ones withing one hosting provider (so called Cloud) - as Petr Palas said in previous blog post: as long as you aren't the one who manage the servers physically it's considered a cloud hosting. I don't have to say you can add any number of servers into cloud, right? For small clients its OK to have managed hosting.

btw; I would never ask my customer whether he's happy with price increase since I know the answer already:)
I guess the price change is inevitable no matter what we say, no more small sites with Kentico and profit from first site. I only want to see this amazing 5.0 version.

To Jason: I'm not sure if I understand your question, but I will try to clarify your situation: you currently have 1 Server License Enterprise Edition with Source Code. It means there's no change for you. You will get free upgrade to version 5.0 as a part of your maintenance, so you will keep your current feature set plus some new features (widgets, UI personalization) in 5.0. Your yearly maintenance fee will not increase. Unless you want to purchase an additional license for additional server, you don't have to pay anything.

Petr,

You say:

"Our long-term strategy is to keep our pricing affordable for small and medium-sized busineses..."

BUT THEN You say:

"There's no reason to expect that the price/licensing will not change..."

These statements are contradicted with each other!

How exactly you plan to keep the long term pricing affordable for SME and in the same time double rise the price on yearly basis?

Petr,

You mentioned something in response to my comment that I had a questions about:

> To Jason: If you use Server License with Source Code for
> your organization, you need only one Source Code license.
> It's not necessary to purchase Source Code for every server
> that you run. If your organization creates web sites for
> other organizations that are governed by your organization,
> you can "share" your Server License with them.

Perhaps I am confused about the Source Code options that you have available. From what I see in your pricing details, the lowest cost available for any type of source code is $14,499 for a single website (45% increase to us). Whereas currently, for $9,999, we can get nearly everything and the kitchen sink. We personally have no need for the Social Networking add-ons, but I can understand you wanting to work that into your base price model.

However, the number of sites is a big concern for us. Not because these sites are for other organizations - they are all for us. The number of servers isn't a problem either - we are fine with one.

So it appears to me that if we need more than a couple sites, the next price point we will need to consider is $23,499 (135% increase to us). Again, all of that price increase, and we still get _less_ than we get now.

And if we need more than 10 sites, the final price point we will need to consider is $32,499 (3.25 times what we would pay now). All that money, and finally we have reached the license identical to what is available to us now.

If there is some additional discount that we are offered in this pricing model that I am not aware of then I am VERY interested to know what that is! We are just one organization - all websites would be one of our websites. We only need one server. We don't need _any_ of your add-ons (E-commerce, Social Networking, Advanced). But we must have source code! Must we pay the exorbitant cost increase?

To Brandon: If you already own the Server License or purchase a new license before 5.0 release, you can keep using it for multiple clients as long as you wish, even if you upgrade to 5.0 or 6.0. There's no change for partners who alread purchased the Server License or who purchase it before the 5.0 release. Only if you purchase a new Server License after 5.0 release, new rules will apply and they will apply only to this new license. Also, the maintenance renewal price doesn't change for you. We do not change the rules for already sold licenses.

Petr - I have a question specific to our situation and how it would be affected by the new licensing structure.

We are currently a registered solutions partner and own one server license which we purchased earlier this year. We currently develop small sites ($5k-10k) for multiple clients, so we have them all under one server license.

Under the new pricing structure, what happens to our cost once we upgrade to 5.0, 6.0 and later versions?

Hi Petr,

I would also like to add please consult your solution partners and customers like us first before making these massive decisions. As partners and customers, we are the ones that are doing the marketing for Kentico by promoting how good and affordable it (was) and sending in bug reports and feature enhancements.

It's just not economically viable anymore for our agency, which is a shame because we loved using the product. It was a great product.

Please please reconsider and do something about it!

Hi all,

Thank you for your feedback. The reason why we are increasing prices is to make our business model sustainable and allow us to keep improving the product and services.

We actually did a small survey on the new pricing model among chosen partners and the results were positive. Still, it seems we didn't choose a representative sample of partners and I'm open to discussion how we can keep supporting small agencies.

I can see there's a significant demand for small business CMS among our partners. Let's consider together what kind of license would work for you and us, too. Let's call it "Small Business License". This license would be available only to our partners, not for direct sale. It would have limited number of content editors so that it cannot be used by large companies and so that we do not lose money we could make on big deals.

Could you please submit your suggestions using the form at http://devnet.kentico.com/Blogs/Petr-Palas/October-2009/Small-Business-License-for-Partners.aspx.

Thank you.

Petr Palas, Kentico

Your point about smaller sites going to the cloud and picking a template of $10/ month is right on the money. It’s also a statement that indicates you have little interest in serving the clients you already have.
I get that, you want to grow and play with the big boys – make a few dollars for all your hard work. However, you have built this platform into what it is today because of a promise that it was the right entry point into CMS for smaller organizations. You’ve said so in your marketing materials, and those who have bought into Kentico and who work hard at evangelizing either publicly or directly to end clients have in the past earned a pat on the back. This new pricing and your responses here are a slap in the face. Thanks guys but we’re going to leave you in the dust.
YOU’VE OBVIOUSLY MADE A STRATEGY CHANGE.
Small(er) agencies dream of having a solution like Kentico - albeit a horribly document one - it works and has, up to this point been something we could sell our clients on. It’s not always an easy sell and in these economic times every dollar added to the proposal can be the one that breaks the deal. The only way a small(er) agency can use a CMS as a platform is if we can draw some economic benefit by streamlining our processes.
Clients are comparing our prices to those in the cloud and don’t have the technical expertise or the desire to understand the differentiating values of their agency using a system like Kentico. Our clients want custom, they want customer support and if we can offer an affordable, robust and flexible CMS we might just be ahead of the curve. Yes, everyone wants a CMS but so few can afford it and in the absence of something "affordable" they are forced to look at the free solutions available. Thus, the majority of your current customers who are here today voicing their concerns are essentially saying we’re going to have to drop you; all the time and effort invested in ramping up to your system and living with your growing pains, evangelizing to our clients and web developer community are for naught.
I'm an account exec and content developer who, while frustrated with the lack of documentation, adores working in Kentico. I won't pretend to truly understand much in the technical details written by Ray Ban, but he definitely has a point which essentially says that you can’t compare apples and oranges. I do know that there is a huge difference in the systems that charge $20K and Kentico. I also know when someone has broken a promise and caused me to lose trust. That’s what all these comments have been saying. Not that you’re not worth more; Just not this much or in this structure. We’ve looked high and wide, analysed and measured what could work for us and our clients and then bought in to your promise of an affordable platform for smaller agencies. Now you’ve broken the trust. A very sad day. This is a HUGE decision on your part which means that much of the next few days on our end will be spent evaluating our new options.
One last thought. We all like to preach about partnerships and a new open model of working – open communication, conversational marketing and all that from the social web. Well, here’s your opportunity to let us know if you’re a partner with us or not.

What started as a highly competitive product/solution at under $500 for websites is now 4 times more expensive. The landscape still has us vendors competing with open-source Joomla / Drupal and other basic ASP.NET (DNN).

For vendors, you need to educate how to compete with other players in the market.

Earlier it was easy to show why a simple website could be constructed for under $2k. Now its not possible.

The social / e-commerce feature are not mature enough to compete with others in the marketplace.

I would tend to agree that the business strategy is flawed.

The new versions to keep the entry point of a simple website low and same as the first versions. Keep the fluff of e-commerce / social etc. for players who need it.

you would imagine that the business take inputs from its vendors / consultants prior to making strategy.

do you remember what happened to IBM when it thought it ruled the computer world and can decide what it could do with others.

Is Kentico listening?

I think you totally miscalculated your business strategy!
Lets put it simple and short: Do you think that Kentico solves all issues regarding web design just like magic wand? Do you think that running Kentico on dedicated server is a cost free? Do you think that Kentico sells for us, talks for us, convinces clients for us? Do you think that is normal and convenient to rise the product price 300% and more over past 2 years. I assure you are pretty wrong dear Petr if you think this way. Any hey, who is going to pay our time spent on training development staff... is this also cost free? You used your partners as a platform for testing & debugging your software. Well this is a huge disappointment and somehow I doubt in your further success with this poor business strategy.

I agree with the comments on the new pricing. I chose Kentico because it was .net based and affordable for small to midsized clients. I have been working hard to implement sites to achieve the gold partner status. I had to convince one client who wanted to go the open source route by sharing the cost of an ecommerce license. Now I have two big sites that are almost done and I will have to license 4.1 for them, but They aren't going to want to upgrade. I have contributed lots of my personal, staff and company resources to Kentico and you have now put me in the position of reconsidering Kentico. You should have done some research from the partners.

Now I will have to find another CMS solution that fits my needs and figure out what to do with the existing sites I have in production.

PS- I have managed many partner programs for companies like Avaya, Bic, and Dairy Queen. Your partners are telling you something and you are choosing to ignore it with silly statements like "we can't please everyone" or "use our free version". This is a terrible business decision. Many partners like me have chosen Kentico because it is robust yet affordable. You are now taking PAYING customers, and driven them to you free product, or away from your product. Good luck.

Petr,

Unfortunately, I have to agree with the majority of posts above.

It concerns me that these prices were not run past any of your partners prior to being made public. With a little consultation with gold, certified and standard partners you would have this feedback prior to getting dozens of complaints above.

We all think Kentico is a great product, the way in which you have pitched the product in the past (which we have echoed to our own clients) does not match the new pricing model.

I can understand that you need to build an economically viable model, but the one above is not going to work for the vast majority of our projects. It might be ok for clients with bigger budgets, but having said that there are well established CMS's that cater well for that market.

We recently researched our own clients and found that, typically there are 2 markets: 5-10k budgets and 25k+ budgets.

The first budget does not have the scope in it to include a 2k license (or 3.5k with ecommerce) so they would not be suitable for Kentico.

The latter normally prefers to have their own server license, but 13.5k is half of their budget... again not suitable.

The maintenance costs are another issue - if you supported the clients directly I could understand the charges a bit better, but we always have to act as middle-men stuck between a rock and a hard place.

If you don't think it's too late to go back to the drawing board, I hope you'll take these comments as productive feedback and reconsider the new tarrifs.

Thanks,

James

Petr,

Obviously, Kentico has to decide what business it is in and act to develop that business accordingly. This I understand.

However, I too, like many others who have posted comments here, have to make the same choices about my business. My typical customer is a small business paying $2,000 or more for a web site. I have chosen to use a CMS to create these sites, rather than develop from scratch in VIsual Studio.

Just a few weeks ago, I chose to start using the Kentico CMS for this development. It allows me and my staff to have a common vehicle for developing and maintaining my customers' sites. Now I will need to alter that decision. I can no longer afford to pursue this path given the nature of the clients' that I support.

As I said at the start of this comment, you have to make the business decisions that are right for Kentico. Unfortunately, that means a number of us, myself included, will need to do the same for our own businesses.

I am glad you sent the change notice out now, before I invested too much time in learning and using the Kentico CMS. That is now wasted time. In fact, I now must choose another partner and start two of my projects over again as a result.

I wish you the best with your decision, but I am sorry to see you leave the small business developers' and agencies' marketplace to your competitors. Your product and its documentation significantly distinguished you from the competition. But these last two years of significant pricing changes make it impossible to continue using this product for my company and others who have commented in a similar fashion.

Glenn

Petr,

You keep comparing Ultimate with Social networking on the basis that each represents the top of the range. However, when people make a buying decision its based on features, not position in range.

If you want the features which were in Enterprise edition you need to buy Ultimate. As I pointed out staging, for example is in advanced, and many social networking features which were in Enterprise are now in the social networking module.

I'm not going to go through the %ages again. I stand by them. People will need to look at the features they need and the dicounts they get and make their own calculations. The point is, it's a lot of money and it removes our margins.

For us, Kentico didn't compete with enterprise products, it competed with opensource. We felt that it was worth paying for Kentico's impressive features and flexibility. In fact, the great differentiator was always that CMS was not an enterprise product, so it wasn't carrying all the complex features and requirments of an enterprise product, and we weren't paying for them.

I think a CMS can only be one thing or the other. It seems as though you've made your decision.

Really agree with Tony and others on point about the need to use one platform rather than several. The new licencing makes this impossible - smaller client's simply won't pay it.

I reiterate my earlier point that I think you need to go back to the drawing board with your licensing and actually spend some time understanding your market.

The people posting on this blog are only the tip of the iceberg, a lot of your customers will simply go to your competition.

I also agree with everyone here. With new prices, Kentico is going over budget of small web agencies.
Sorry to say this, but we do not plan using Kentico for our projects under this pricing and licencing model.

I guess you are changing your market target off the SME bussines, unfortunately...

Regards,

Also, alternative payment methods, like a pay monthly scheme. I might be tempted to upgrade to the social networking edition if I could pay it over 12 + months ;-)

Scott

Petr,

you wrote:
"Actually, in this case, you will have to switch to web site licensing then, since you won't be able to use the new Server Licenses for multiple clients."

It is all about that; Most of my clients maybe 70% are not willing to pay such a high price for 1 website licence, no metter how god CMS is. They don't care about it, and they will probably go someone offering open source like Joomla. After all, even if they are willing to pay high cost for Kentico licence, I must cut my own price to be competitive at market.. so where is the profit for mine agency? (Totaly agree with Dom)

On the other hand if I can use Kentico for only those 20%-30% of clients who will pay licence, then I will not choose Kentico anyway. Why? The time invested in studing as well as in implementing & customization Kentico is too high against these 30% of clients. We need one solution that will be used for all our projects if we want to be profitable.

With these new prices I don't see where Kentico fits at market place:

1. Big agencies usualy have their own solutions, either made from scrath, either customized open source. Do you think they will buy Kentico and depend on Kentico licencing and prices? Wrong!

2. Small agencies work for small clients. Both don't have budget to afford nothing expensive. They will sell & buy static sites, php scripts, custom made poor CMS, open source..etc because 1k $ in this world means a lot. Especially today in the economic crisis.

3. Does not exist!

At least this is situation here in my country.

Hi

Sadly, I am going to have to agree with the above. In a time when most clients are tightening their marketing budgets doubling the cost of the CMS (entry level) is going to cripple our business.

We work with SME clients who typically have only $5k - $10K budgets (AU$). We only found Kentico relatively recently and it was a perfect solution. However the CMS is no longer an affordable option for these clients. In your reply posts above it seems your comments are driven to "if clients are paying for a CMS they won't mind paying double that now" - well that's not the case I can ensure you.

It will simply remove most of the profit out of these jobs and not make any sense for us to continue using Kentico. Is that our fault for having SME clients? Perhaps, but Kentico was always sold to us as a solution for small businesses. It's not now and I fear you have made a significant error in removing your product out of the price range for smaller web agencies like us.

We thought "ok" when the prices went up at the beginning of the year, and we thought "ok" when the partner program was restructured to make us pay more but to then double the price in less than 12 months, without a long warning period seems crazy and it is clearly evident by the growing responses here that your customers don't agree with you!

I would much rather see an affordable entry level option being added to the available licenses. The free edition nearly has what most SME businesses require, but the lack of multiple forms and the requirement of the "powered by Kentico" rules it out. Can you not provide another one? In all honesty I would rather have no free edition but one for say $500 that allows for upto 5 forms, 1 newsletter, 1 blog etc.

I truly hope you listen to the feedback you are getting, but my fear is that you won't. Personally speaking 90% of our projects will now not be using Kentico - but I don't think you really care about the small businesses who use your product now.

I have to agree with everyone else here. Kentico's niche is that it is affordable to small-medium agencies working to tight budgets. Alienating your primary customer base in the hope of targeting an enterprise market is very risky - especially when the product is still only getting there.

With the high level of competition in this area, "good will" is vitally important and based on the feedback I would also suggest you reconsider...

Hi Petr

I'm going to have to agree with everyone here. I think Kentico is a great product and the support is top notch. And the main reason why we invested in Kentico was the 1 server unlimited site licence which was extremely affordable. But the new pricing almost prices us out. Simply put, we just can't afford it. Also remember that web design companies need to spend time and money for design of the website, integration and customization of the code for any specific features, styling the look and feel of each of the modules and also we have to get out there and sell it in the first place which takes time and effort.

I think it's just a massive jump from the old prices to the new prices. I understand that Kentico want to expand and increase revenue, but how about a more reasonable pricing scheme. I mean 700% increase is a great testament to your loyal customers who are happy with the product and the pricing. But the new pricing scheme will lose a huge target market which are the small to medium web design companies. Only the larger ones will benefit from this.

To Dominic:

I had to remove the current partner price from your post since it's confidential information for partners only as we wrote in our blog post on the Partner Portal. It's not necessary to put partner prices here since there's no big difference in the price increase numbers.

I'd like to explain the terminology first: if price growths from $100 to $150, it's called "50% increase".

If you really need to use the Ultimate License instead of Enterprise Edition which is something that won't happen very often (if you need web analytics and want to save money, you can always use Google Analytics with Kentico site), it's increase from $1,999 to $4,499, which is 150% increase, but again, you're comparing uncomparable. You should compare Social Networking License to Ultimate, which is $2,999 to $4,499, it means 50% increase.

The current maitenance renewal for the Social Networking License is $999, the new maintenance renewal for the Ultimate license is $1,349, which means just 35% increase. Even if you compare Enterprise Edition maintenance ($599) to $1,349, it's 125% increase, not 710%.

I understand that the increase will decrease your margins. On the other hand, the new prices will allow us to provide more competitive product and support which means you will have better chances to succeed in tenders and offer Kentico to larger clients.

Petr,

You asked how I calculate a 300% increase in cost. Sorry - it's in fact a 265% increase because you'd buy the Ultimate license. Or to put it another way your paying 365% of the current price. I calculate it like this:

Current Enterprise license is 1999 which includes web analytics, staging and e-commerce. If you want web analytics or staging you need to get the new Advanced module. If you want ecommerce you need to get the new ecommerce module. Total price of 4,499 for the ultimate license.

For a partner the current discount of 25% makes enterprise 1499. The new cost will be {the price was removed by Petr Palas since it's confidential information available only to partners} at partner discount. That's {removed} times as much.

If you are a gold partner it's not so bad and it's only costing you double. However, since we'd been led to believe that working towards higher partner status would lower our overall costs, even this has a sting to it.

I notice you don't challenge the 500% increase in maintenance. I made a mistake there as well. At partner level, maintenence on ultimate would be {removed} which compares to 199 * 0.75 (25% partner discount) = 149. This is an annual increase of $1065, or 710%.

The problem as I see it is in the division of your packages. I think that anyone who previously used Enterprise will need to use Ultimate in the future. This means that ultimate doesn't compare with Social Networking, it compares with Enterprise because that's the necessary migration path.

A better solution may be to create a mixed licensing model which has some elements on a server basis and some on a site basis. This way you don't get into a trap by providing unlimited server licenses but the scaling of the cost doesn't have to be so savage that you lose half your customers.

One final note. When you say to Martin (above) "is it really such a big issue..." you need to realise that building web sites is highly competitive and your extra costs cut into our margins. Whereas a while back you could make 30% on web sites it's now getting closer to 15% with increasing pressure on prices. For a web site at 25K with a 15% margin, it aims to make 3.75K profit. If the license costs 4499 instead of 1999, that drops the profit to 1.25K or 5%. If the project has any problems (and it will) it's running very close to becoming loss making. From me the answer is "Yes, it is really such a big issue".

Very timely posting. I had narrowed down my choices to 3. This allowed me to remove your product from my list. Thank you for making the decision a little bit easier.

To Martin Bulmer: Martin, if you do a project between 10k and 50k, is it really such a big issue to put in 1 Web Site Base License (that fits most of the projects built with Kentico) at $1,999 minus Partner discount?

To Tony: Actually, in this case, you will have to switch to web site licensing then, since you won't be able to use the new Server Licenses for multiple clients.

To Allan: Yes, the Free Edition requires a logo, but you can place a small link Powered by Kentico to the footer, too - we are fine with that. If someone wants a CMS for free, I can't imagine this should be a show stopper. If they do not want a CMS, it doesn't make much sense to me for us to accomodate our business model so that you can use Kentico CMS to clients who do not need a CMS.

Hello Petr,
Damm but this has come as a bit of a shock! I've been busy trying to sell-in Kentico to my current firm, having sold it in to the last two firms that I've worked for. It's also in place in two other businesses where devs who worked from me have carried the torch to their new business. To be honest, it should have been an easy sell here at NV: the product matches the requirements of our relatively small agency where we make sites between 10 and 50K and do custom integration up to 200K The brilliant features, multi-site license and low cost of entry of the base product meant that the competitors looked laughably costly. Now I think Kentico has seriously lost its financial competitive edge and I can see it being considerably less likely that I'll be able to convince the management. Buying the previous version won't appeal either as this is merely a short-term solution and does not scale should another server licence be desired.
You have to consider the investment in time and learning that we agencies put into such tools and whilst I think Kentico is a cracking tool, I can't see the company investing in something they think is going to be too costly to employ in many cases.
I hope you can reconsider and come up with a solution that has universal appeal.

Petr,

You wrote:
"If you buy Kentico CMS 4.1 now, you can upgrade to version 5.0 for free as a part of your maintenance and still use the server license for unlimited clients as I explained in my blog post. If you buy another Server License of Kentico CMS 5.0 or 6.0, the new rules will apply."

Let say some web agency buy server licence now for 3.999 $ (get free 5.0 upgrade etc..etc..) and during 2 years they produce 50 web sites. After 50 sites (or even more) they require another server licence. Now, if 2010 price for BASE server licence is 9.999$ it makes me belive that 2011 the price will be at least 19.999. What price will be 2012? Only God knows. That is a problem! I don't know about other small web agencies but mine cannot fit into this "plan", knowing that prices are going to rise at least double+ every 12 months...

Petr,

Does the free edition have a requirement to place your logo on the website? If so, this is a show stopper for the majority of projects..

To Tom: Did you consider using our Free Edition for these clients? If so, why couldn't you use it?

I don't see any reason why small web agencies couldn't use Kentico CMS. As I mentioned above, the 5.0 Base License covers majority of today's sites needs and with partner pricing, it's very affordable in comparison to any alternative - even to the free open source tools if you consider how many hours you save through using a stable and fully supported platform with dozens of features and hundreds of web parts available out-of-the-box.

To answer your question: our strategy has not changed - we want to sell a stable, professional CMS at a reasonable price. However, I don't see any benefit for us if we sell it at $200 per site if we can focus our resources on selling it at $2,000 per site and still being 10-times cheaper than solutions of the same feature set and quality. We have the Free Edition for small web sites that can be used also for commercial projects.

If you buy Kentico CMS 4.1 now, you can upgrade to version 5.0 for free as a part of your maintenance and still use the server license for unlimited clients as I explained in my blog post. If you buy another Server License of Kentico CMS 5.0 or 6.0, the new rules will apply.

Petr,

I completely agree with Dom re: the increase in prices being difficult to sell.

There are a further 2 problems with the Kentico licenses:-

1) We decided a while ago that investing in a shared server licence for use on multiple client's websites was unworkable - smart clients want to know upfront that they are not 'locked in' to a design agency / hosting company and that they can move if required. We need to be able to advise clients that they own the licence to the CMS (that they have paid for!). This is particularly problematic when source code licences are involved.

I support the new “single client per licence restriction” as this keeps things much cleaner HOWEVER one would expect LOWER prices accompanying this restriction, not dramatic increases.

2) Some clients want to host their site on their own server (rather than the design agencies servers). When multiple websites are involved (E.g. a small business with 3 domain names that point to different pages) the licences are unfeasibly expensive and unsellable.


I think all the posts on this page demonstrate that there is real support for your excellent product. It is however a regrettable that such a well architected system is being threatened by an ill considered, over complicated and restrictive licensing regime.

I think if you go back to the drawing board with the licencing you will be able to work out something that is much more workable for your customers and profitable for Kentico.

Hi Petr,

We are at a testing phase of Kentico CMS. We wanted to leave our solution and start migration process to Kentico CMS/server license. As I read some posts fome small to mid webagencies that are using this solution - we are not sure what to do...

We run about 60 websites on our server. We've built a lot of modules and enhanced features based on opensource .net CMS platform. Now we wanted to start using Kentico CMS.

To answer your questions about small/mid webagency. Most of our clients have one user account doesn't matter how many people are editors. Sometimes we become editor of a website for our client - but we still use a CMS for that. Sometimes the richt-text-editor for content editing in client's hands is a web killer. In that case we make available f.e. news administration to client. So there's where the server license made sense to us. That was the Kentico feature no.1 - as a webagency you were able to scale to client need from the smallest web presentations to the biggest solutions and you could still use one solution for all of that. For small to mid webdesign company it's critical to choose/develop one solution to fit the largest spectrum of needs - including the smallest clients with basic internet knowledge. As was written in some posts above - our clients pay for what they USE not for what they MAY use. I'm missing support for agencies that use server license for building every web they do and use Kentico CMS not just as CMS which they set-up, template and resell to client but as an internal development framework and internal content management tool too. Small to mid webagency needs to make small websites to live out. When you start with Kentico even for the smallest websites you can then very effectively enhance the client's website. The smaller/mid companies doesn't always know what they want at the start. They even don't know what to expect from internet. Most of them comes with requirements as they get familiar with their website or internet. It's not good to push them, much better to let them grow or help them to develop.

Is your new sales/licence model a forecast of some strategy changes? Does that mean, that some of web agencies using Kentico CMS as their engine are not interesting clients for you anymore? I understand that you are not able to maintain and sell product that is for everyone, but what are your future plans?

As I read your post I made one conclusion - does that mean that for small, mid webagency it is the last chance to get in with 4.1 till 5.0 release? If we buy server license today can we upgrade to 5, 6 etc with conditions that are actual today? If yes - good for us, but as you can run let's say 50-100 websites on one dedicated server machine, it still doesn't solve the future problems that comes to agencies that choose to use Kentico as mentioned above.

To Dom: I'm not sure how you calculated the 300% or 500% price increase.

The current Enterprise License price is $1,999. I would say that 80% of sites that are currently built with Kentico CMS can be created with Kentico CMS Base License that is still at $1,999 as it was before. If you look at the Gold Partner price on the partner portal, you will see that this "entry" price is very low. I just can't imagine how a client who wants to use an advanced CMS can't pay this amount for a professional, stable CMS with many advanced features. If they do not need such CMS, you can build a static site for them or simply use the Free Edition that is sufficient for such small clients.

Even if the client wants to use all the features, the Ultimate License price is $4,499 which is just 50% increase from our current top edition (Social Networking Edition - $2,999).

The maintenance fee for the newly purchased 5.0 licenses is still 30% of the license price as it was in version 4.1, so it can hardly grow by 500% if the license grows by 50%.

Petr

Please don't forget the people who will find the 300% increase in Enterprise version and 500% increase in maintenece difficult to sell to their customers.

The difficulty with the server license is that a web agency will volume to make it worthwhile. Several people above have said that they were planning to upgrade to a server license, indicating that they started on a site licenses and found that Kentico worked for them. The site licenses are the entry point and I think it's important that you provide a cost effective entry point to new partners.

I think what's needed is a low cost entry point, a flexible server license and a way for you at Kentico to be able to make money out of the top end of the scale, when your product is used by large corporates. To me the thing that's missing from your licesning at the moment is a way for you to benefit from that.

I can see that most comments come from partners who do not like the fact they will not be able to use the new server licenses for multiple clients. Can you tell me more about typical projects that you support with "shared" Server License?

1) What features do you typically need for these projects
2) How many CMS users does your typical client have?
3) What is a typical budget of such project (for services and CMS, without hosting)?
4) What would be a reasonable CMS price for such project?

Thank you.

Petr Palas, Kentico

To Scott/Rhino Car Hire: We actually considered this, too, but we currently do not plan to sell single modules since
their price would be too high for most clients should it make sense to us. Please note that if you need all features, the price is not $7,500, but 4,499 for the Ultimate License. Plus, partners get discount.

To Mohamed: I think we are pretty much aligned with your criteria for software vendor selection - the prices change once a year with notice before the change; the higher price means higher financial stability of the company, as well as increase of company size.

To Petar: I'm not sure about typical budget of your projects, but as I wrote in my reply to Ralph - it doesn't make sense for us to sell Kentico CMS at $200 per site if our competitors sell 1 Web Site License at $20,000 to $70,000 per site.

To Chris: Thank you for your feedback - you're right, we need to increase the price so that our business model is sustainable in the long term. And yes, you will see more pre/post sales support and marketing materials from us in the next year. That's where we're going and we need to keep our pricing in line with better product and services since these come with extra costs.

To Chris and Andy: if you currently run 1 Server License 4.1 or purchase it before 5.0 release, you will receive free upgrade to 5.0 as a part of your maintenance and you will be able to keep using your license for multiple clients as you do that now since you purchased the license before 5.0 release. Even if you decide to upgrade your license to 5.0 Ultimate License, you will still be allowed to support multiple clients using a single Server License. I would recommend that you upgrade to 1 Server License Social Networking Edition now to save money next year.

To Tony: we re-evaluate the pricing every autumn. I can't tell you what our price will be next year since it depends on the situation on the market. Our long-term strategy is to keep our pricing affordable for small and medium-sized businesses who are looking for an advanced Web Content Management solution. We may not be a fit for very small clients who expect to pay $200 for the CMS and I don't see much future for commercial CMS vendors (as well as for web
designers!) in this segment since these clients will be more often choosing SaaS solutions with pre-built templates at $10/month in the not-so-far future as the cloud computing lowers the costs of running such solutions.

To Ralph: we keep the maintenance fee for existing clients at the same price as it was when they purchased their license, so there's no price increase for maintenance.

To Jonathan: Thank you for your suggestions, we will consider them.

To Jason: If you use Server License with Source Code for your organization, you need only one Source Code license. It's not necessary to purchase Source Code for every server that you run. If your organization creates web sites for other organizations that are governed by your organization, you can "share" your Server License with them.

Frequency of price changes: The last price change we made was at the beginning of 2009 with release of 4.0. We are adjusting the price of Kentico CMS on a yearly basis. There's no reason to expect that the price/licensing will not change. Prices do change, no matter what product you buy. All our competitors change (actually increase) prices time to time, despite the fact their prices are already 10 times higher. There are many factors that lead us to change the prices: product improvements and growing maturity of the solution, better services, competition prices, etc. We are announcing this change 2 months in advance and if you already budgeted or quoted using the current price, you can ask our sales team to lock the price for you for some extra time.

It seems everybody here agree 100% regarding the price & licencing.
I think Kentico should deeply reconsider their strategy.
It is for sure that Kentico CMS is great tool, but if the price becomes unafordable nothing else will be important anymore.

Just yesterday before this announcement I was thinking about Kentico CMS; It asks acctualy a lot of time to study it to be able to use and customize full set of functionality. Just after some time when the team is well trained, company (Kentico patner) can finally benefit from Kentico CMS.

My opinion is that Kentico should stay at the cost level where is right now. Maybe some new extra licences with new feature sets could be considered for higher price.
Kentico should be primary focusing small to medium bussines. I think there is the most of the profit today.

I think Kentico company should work more on marketing and sales than on developing extra features. You already have a great product and you just need to incrase sales and here is a profit, no doubt very BIG profit! With price rising , you defenetly lose big part of the market.

Please take my opinion as a good intention. I truly want Kentico to grove more and more because it is a great pleasure working with it!

Wow... we just achieved Gold Partner status and had every intention of moving our entire client base to the Kentico CMS solution. They don't all need CMS, but it certainly streamlines our process when our employees are supporting one product. With over 20 Kentico sites launched and about a dozen in development, this licensing structure has forced us to rethink EVERYTHING about the way we run our business.

Rajeev, Allan-Avian, and others brought up excellent points about how small web development companies are now forced to look at other solutions. We work with small companies, non-profits, and large enterprises, and Kentico seemed like the perfect fit and an ideal way for us to streamline our process. This is very disappointing, as we had based many of our future plans on the Kentico platform. We have trained our personnel and were planning on continuing that. We have created internal documentation to streamline the development and launch process. Most likely, we will not be able to continue under this pricing model, even with our partner discounts.

Here's an interesting nugget that was written by Petr back in November of 2008 when the last price increase came about... "Many of our partners purchanse (sic) 1 Server License and get a dedicated server for that. It allows them to offer a better price to their clients since they can split the cost among e.g. 50 sites and get as low as $100 per site with Enterprise Edition. This solution works for us well, too, since as the partner builds more sites, they require less support."

At the time, I agreed. We offer significant level-one support to our clients and rarely contact Kentico. I think we contacted Kentico for support less than 5 times in the last year, and twice the issue turned out to be a bug...

This post also touted the viability of small businesses using the product. I don't know where that philosophy went:
http://devnet.kentico.com/Blogs/Petr-Palas/November-2008/Kentico-for-Small-Businesses.aspx

Our small business must be extremely budget conscious, especially in these times of economic unrest. It is disappointing because I feel that Kentico's success in many ways was built on the backs of developers like us. We will have to go from being a huge proponent of Kentico to finding a different product - not by choice, but because of budget. I sincerely hope that Kentico rethinks this strategy and considers where they are positioned in the market and how this change will alter that.

Unfortunately, I am now forced to seriously review our CMS strategy. Prior to today’s announcement, we had decided to use Kentico going forward for all our clients requiring CMS systems.

As a relatively small agency, we fear the new pricing structure and restrictions are going to make us completely un-competitive– particularly to SME clients. This is very regrettable since we love your product and our experience (so far) is showing that Kentico is an outstanding website / web application platform.

I don't see any specifics on the prices for source code licenses without the 'Ultimate' stipulation. Do you really have to buy an Ultimate license even if you are only using the single-organization-single-server model? If so, it seems that Kentico is no longer a cost-conscious option for organizations that rely on a source code option. The price increase looks like it will hit us hardest, since the license available now for $9,999 give us one server, unlimited web sites, and source code. Now, even in a one-organization, one-server model, the only comparable license will cost us $32,499. A cost increase of 325%. Our organization needs to be able to tinker with the innards a bit in order for our web site to be compatible with legacy applications, etc. So affordable source code was one of the biggest selling points for Kentico. May not so much anymore.

Hi Petr

I am very pleased to see that you have a new version coming out and am looking forward to seeing the details of what is included.

I am intrigued to see the new licensing model and feel like I been through all this before.

I look forward to hearing your thoughts.

Three years ago we used a different CMS vendor for the majority of our .Net developments, when we first started using them they were one of the leaders in the field and were successful. As a result they kept pushing their pricing higher and higher and delivering less and less improvement with each subsequent release.

The vendor then placed all their emphasis on partners and focused less and less on core product development. Today they are miles behind the rest of the market - still focusing on features that were great 6 years ago. Most importantly they are far too expensive for us to use.

As a developer we understand the investment that has been put into a product and are more than happy to pay what something is worth. But when a product becomes too expensive we will find a different CMS.

PS. I have only three things on my wish list for Kentico 5.0, everything else is just about perfect:

1 - Let me use web parts in aspx template mode
2 - Release the product as a .Net Web Application as well as a .Net Website
3 - Exclude all the modules and webparts by default so that I can inlcude them as needed

You have an amazing product, but you need to accommodate your product champions a little better in your 5.0 release - even if that means delaying the release until you can put together a slightly better licensing model.

Have you considered issuing a server license for partners above a certain level that then incurs a nominal cost for each website built under the license?

Kentico CMS is a well put together product and we have built and are currently building several websites - from smaller companies to enterprise wide solutions. We were very happy and excited when we first found your product.

The new pricing and licensing structure that you are rolling out is quite disappointing.

You recently changed your partner pricing structure and are now rolling out significant price increases. This has shaken my faith in your company. If you can double prices at this time, can you be depended upon to maintain stability in pricing and licensing over the next year or two? By dint of such significant and sweeping changes, you are going to alienate a quite a few web designers and developers - as is becoming evident by some of the comments posted on your blog.

We have invested a lot of time, effort and money in training our development staff and with this new pricing structures, it becomes unaffordable for most small-to-mid size websites. It is very disheartening to see that we have pretty much wasted a lot our time and resource in this endeavor because with the new pricing, I just don't see us continuing to use Kentico.

I am very happy to hear that you grew 710% and that you are one of the top 50 fastest growing companies in Europe. But, does that justify these serious changes? I believe that you may just price yourself out of the market, and to be blunt, I am sorry to say that it does makes you appear to be bit avaricious.

We will have no choice but to look for alternative solutions. And I wouldn’t be surprised that many other web design firms like ours would be doing just that as well.

Thank you.

Hi Petr

Thanks for your reply. However, you haven't convinced me.

You say:
We realize that we cannot be the right fit for everybody.

Well, Petr, actually you did it! You are at the moment the right fit for everybody! As an (small) agency I can offer large CMS based web sites, but I can also produce smaller web sites, that do not require CMS functionality to streamline and speed up our internal development process.

And believe me, to get to this point, there was a lot of work invested, that certainly makes the initial license price and the maintenance fee seem very low.

And again, I am not complaining about the increase of pricing in general (even if I can understand the long list of concerns in the comments here).

What I am really concerned about is that with the new pricing model, Kentico will only fit larger budgets. And this means that I need a second tool to built smaller sites, which on the other hand makes no sense for small companies, because the learning curve and development process is just too time intensive.

Petr, I am not sure, if you are fully aware on how difficult it is to sell a professional CMS against all the OpenSource solutions like Joomla and even Wordpress. This has a lot to do with clients not being fully aware of the consequences of choosing a product with no assured support, but it has also to do with budget.

At this point, I can be competitive, because I can calculate to split the license fees by a number of clients and I can charge the amount of the CMS that is USED by the client and not the amount of POSSIBILITIES.


You say:
Kentico CMS can be used in the shared hosting environment at $20 per month

Yes, until now.

But I am sure that the 2010 change will have an impact on shared hosting as well.

And then again, I do not want to go to shared hosting and being dependent on another third party, when I am totally able to provide the services myself.

The $200+ hosting is a rough calculation of your maintenance fee, dedicated server & server maintenance, SQL license and client support. ow if you look at the Ultimate license, you are at $1500 = $120/month maintenance fee.

The part, that I have not totally understood yet is what my unlimited server maintenance fee would be in 2010. Would it be 30% of 1 server ultimate license @ 22K = 7K (- Partner discount).... I hope not, because that would be an increase of somewhat between 500%-1000%...



Petr, I sincerely hope that the flood of comments you get on this post will make you rethink this license model. Your web agencies are your most important partners, don't leave them in the rain.

ciao
ralph

Petr,

With some features from the enterprise edition being in ecommerce and some in advanced, the cost of buying v5.0 (before partner discounts) is changing from $1999 to $4,499 (ultimate) because you need advanced for staging and ecommerce for ecommerce.

Maintenance on that will be $1,500 per year ($125 per month) compared to a previous enterprise edition maintenance of $299 per year.

You've just made small web sites uneconomic and, as various people have pointed out, agencies will need to look for another solution.

Finally, I'm sorry to say it does look greedy. A 200% increase in the Enterprise version, a 500% increase in maintenance, new revenue streams from disallowing server licenses to share web sites, new maintenance from all the separate licenses people would have to buy when they used to have server licenses. You've been in 710% revenue growth over 3 years making you one of the top 50 fastest growing companies in Central Europe. This doesn't seem to fit with needing more revenue for marketing.

It's a great product and well supported by a great team, but giving your partners a kicking like this may have some of us looking around for other solutions. Cutting off the tail is not very Web 2.0.

Hi Petr,

I am glad to hear about the improved response support. As the current model is slow with single email responses per day. I can understand increasing the price, but this is twice in about years time. I am very curious to see how the Software has been optimized for large websites as we have over 500,000 page views a day, and this has been an ongoing battle with using your product. The asset management by the Kentico CMS can bring any system design to it knees. If method in which the asset are access has not been improved there will be little true performance increase. I know that I personally got over a 75% increase in performance increase just by implementing my own functionality in this area.

Thanks for listening.
James

As CEO of a Kentico Partner I can say that this is going to severly impact workflow and cost of site development for our clients. We, too, were working on the server license concept to be able to host multiple sites all at once on our servers but now we're going to be stuck with even larger license fees per client site delivered.

I'm not in the software industry, but you need to really evaluate what you're doing because it's my opinion that you are on the road to pricing yourself out of business. You need an option for smaller to mid size sites because that is where many of your partners' markets are.

Hi Petr,

I am relly dissapointed with the new price rise and licencing model. With this prices we are losing the faith for future partnership. There is no stability in the licencing and pricing, as mention in above posts, and it makes Kentico not an option for planning the future with....at least not for us.

We invested a lot of time (and still do) to study this platform to be able to use it. After all we see that Kentico is becoming very expensive solution which soon will be used only by big companies.

So it seems now that small companies, which mostly first used Kentico do not have future with Kentico.

My question is how much Kentico plans to increse price over next 2-3 years? What is Kentico long term market target at all? We have to make strategy plans and descisions!

I agree with Mark, above. I am a full-time employee of a company that uses Kentico for their website and I also freelance to a number of sole proprietorships (annual revenues well under $100K) for which I've recommended a Kentico solution. The previous move to a price tier that started at $999 for a single site license where it was previously only several hundred dollars made many of these potential customers refuse the suggestion of using this fine CMS.

Because of the nature of their needs, I am the sole support point for them and support would probably never bubble up to Kentico. I have implemented a couple free edition versions for clients and it works to a degree, but I warn them of the significant limit in document, member and other types of objects before implementing. In these cases, I've also had to go around some of the CMS limits by creating my own forms as custom webparts or using an alternate membership provider and direct mail engine or commerce engine. It would seem there is a market for a small-sized CMS based on .NET and Kentico was the only one I've found that was worth paying for. But it is now too expensive for my type of client and will become moreso in December.

I would ask you to consider releasing a product between the free and single site license that increased some of the limits on product, document and member counts but maybe kept support limited to forums and otherwise required end-users to go through their implementation partner for support and keep the requirement for the Kentico logo in the footer. Maybe limit the sale of this license to your registered partners (which I actually am not, yet).

As it is now, the $999 price is too high for my clients and I'm stuck managing their content for them manually or they're using the free version and could likely hit a limitation soon. If I'd ever acquired enough customers, I'd considered moving to the server license and getting a dedicated server to run it, but that was far off anyways and now looks like it will not be allowed.

I have the same question as Chris. We are a smalle web development agency and new to Kentico, but its a great product at a great price. If we buy a server licesne now (4.1), will we still be able to upgrade to 5.0 and beyond, while running multiple customer sites using that server licesne? Cheers!

Hi Petr,

I'm a freelance web developer that recommends kentico to my small business clients. It is a great product and i enjoy working with it.

However, these licensing hikes make me question my strategy.

I think you risk shooting yourself in the foot by making Kentico economically unviable to a large section of your target market - for my money you would be better positioned with a reduced licence cost and selling more units.

Implementation cost is not the same as licensing cost. Your argument therefore is fundamentally flawed. Your price increase will increase TCO for clients, and make Kentico a less attractive option.

The option to host multiple (free) instances of Kentico is really unattractive from a maintenance point of view, because Kentico is not modular, and very hard to update.

Good luck with the new prices, and with the new marketing, you will need it!

I am surprised by the changes because kentico have only relatively recently updated the pricing and licensing. It us unusual and disturbing to see such changes in quick succession. Are we going to see price increases again in 1 year? It just looks like u made a mistake before.

V5.0 appears to have a major version to support the licensing and pricing changes. The licensing Is more confusing than buying ms office, so congrats on that! I would favour a module by module price list also, as the arbitrary choosing of packages doesn't fit everyone's needs, the more choice the better.

Kentico is a great product and u deserve to be paid well fir this software, but I would like now to see some stability in the licensing and pricing.

Petr,

I’ve always wondered how you managed to keep the cost of entry so low... I guess you’ve just answered those questions – you can’t! Although the increase is (almost) understandable, it’s now (or as of December) going to be much harder to convince my clients of the benefits as your increases will have a direct impact on their bottom line. The price increases brings Kentico much closer to some serious competition who offer far more by way of pre/post sales support & marketing material in addition to the technical support that Kentico offers.

I'm in a very similar situation as most of the commenters – we are a UK based web design agency who utilise the Kentico 4.1 Professional server license to roll-out multiple sites for multiple clients. Some are using the full capabilities of Kentico; others are on the platform as it speeds our development process.

I think I understand the new server licensing system but would like further clarification on the upgrade limitations. As I mentioned above, we currently have a Kentico 4.1 Professional server license. I understand that we will receive a (regular) free upgrade to v5.0 when it is released, my questions is will the ability to run multiple client sites on a single server license still be available to use if we run with v5.0 as our core system or will have to stick to v.4.1 to run multiple client sites on one server license?

If my assumptions are correct you are saying that any existing clients who receive an upgrade to v5.0 will continue to be able to use their existing server licence (on the v5.0 platform) to host multiple client sites under one server license. If this is the case, what are your plans for subsequent incremental versions? Can I plan on keeping the cost to my clients at their current levels or do I need to make plans for a price increase if we choose to continue to use the latest versions of Kentico? ... Not ideal in the current economic climate!

Your thoughts appreciated.

Hi Petr,

this is terrible... If we have to buy Kentico license for every site... where is the profit?

It is not problem if we pay 20 000$ for 1 Server license, but why can't we put as many client sites as our server can handle. To be honest Kentico is killing our Sun Server with 64GB RAM. So we can't host more then 100 to 150 site per one server. Even small sites take up to 100mb of ram in application pools...

The only solution that I see is to create new license and new terms for small Web Design companies.

Also Kentico Fee edition was terrible move.

Second solution can be to create Platinum partners with 400 points that have 50% discount...

Dear Petr,

I am very disappointed that you are changing again licensing scheme. You had new scheme at beginning of this year. For software companies the main factor for the decision to buy or to develop is how secure are we when using you products. Security here means security against prices changes, size and financial stability of the partner company. I see now that Kentico is becoming tougher on pricing than before.

Although I will keep using (at least for current versions I have) it but I must now say that I will look for other alternatives because with such pricing (and attitude) and in this economic environment we will not be able to continue depending on Kentico any more

Thanks

Hi,

Pricing seems okay to me, I guess you guys need to take a pay check one day ;-)

The only thing I would like to see is the ability to just buy a module licence. Example I have the professional licence but would like to make use of the message board module. I don’t need the rest of the social networking package. I may also only need the module for just one site, so $7500 is out of the question, however I could probably find $500 for just that module.

Scott

Hi Ralph,

Thank you for your feedback. I understand that disallowing agencies to run single server license for multiple clients may mean that some of their small clients will not be able to afford to use Kentico CMS. We realize that we cannot be the right fit for everybody.

If someone wants to have a dynamic web site running on a full-featured CMS, they cannot expect it will cost them $100. Just the implementation of a CMS (even if they choose a free, open source CMS) will cost them thousands of dollars.

For small clients, we still offer the Free Edition that may fit their needs very well and that can be used for commercial projects.

If we are to offer a full-featured, stable and scalable CMS with professional support, we cannot offer it at $60 and $3,000 at the same time, which is what happens if partners use a single server license for all clients. Especially if comparable solutions cost $20,000 - $70,000 per web site. Also, I guess we've been the only .NET CMS vendor offering this model until now. I understand this is a big change for some of our partners, but it's something we would have to do at some point anyway.

As to the hosting: I'm not sure if I understand your point of $200+ monthly hosting. Kentico CMS can be used in the shared hosting environment at $20 per month. Also, the new licensing model doesn't mean that you couldn't run all your client web sites on a single physical server, you just cannot use the 1 Server License for multiple clients.

Anyway, partners who already own the Server License or Unlimited License, can continue using it for multiple clients. Partners who feel they may need to support small clients with "shared" Server License, can still purchase it now, before 5.0 release and run unlimited client sites on it.

Please let me know if it makes a better sense now.

Thank you.

Regards,

Petr Palas, Kentico

Hi Petr

That is a tough call!

I am not talking so much about the price increase. I know that Kentico CMS is a fantastic product, with a fantastic support and its capabilities have indeed dramatically increased over the past 2 years I am using it.

But this pricing model is tough on web agencies. It basically means that from now on it is almost impossible to produce Kentico sites for smaller clients, that maybe do not want to take advantage of the CMS features, but where the agency decides to still use Kentico to streamline its working process.

I understand your point that giving away a server license for 3K, whereby the agency is running 50+ sites on a server does not make sense for the CMS maker, but from unlimited to 1 is a big step. An argument for a agency license would be that supporting one agency is less work than supporting let's say 5 individual clients.

I am also afraid that convincing clients to accept monthly hosting fees of $200+ dollars is difficult.

I am aware that I can still use my (good) old server license to host my existing clients, just thinking about new agencies that are about to jump onto the Kentico train.

These are my 5 cents....

ralph

Hi Alexander,

Thank you for your questions. Here are the answers:

1. You can find the roadmap here: http://www.kentico.com/cms-asp-net-features/Roadmap.aspx

2. The maintenance renewal price remains the same for clients who purchased Kentico CMS 4.1 or earlier versions. It also means that if you purchase Kentico CMS license now, you will save on maintenance renewal in the future.

3. All clients who have Professional or Enterprise Edition now, will receive the same features as they have now plus new Widgets and User Interface Personalization modules. Clients who have the Social Networking Edition will receive free upgrade to the new Ultimate License which means it's a good idea to upgrade to the Social Networking Edition now to make sure you receive all new features and packages added to the Ultimate License in the future.

Please let me know if you need any additional information.

Regards,

Petr Palas, Kentico

Petr!
1. Where we can see "What's new" for version 5?
2. What will be mantaince renewal price for existing customers who have Enterprize editions?
3. If we have Enterprize edition now - should we buy something to get same set of functions when we upgrade to version 5?