Kentico 5.0 the new prices and licenses - what's behind

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Few Days ago we announced our new prices and licenses for coming version Kentico CMS 5.0. I know, each price increase is not popular and a bit unfriendly, but what’s behind these changes? I would like to show you, it’s not only about the product price, but there is a lot of behind. 

Few Days ago we announced our new prices and licenses for coming version Kentico CMS 5.0 (http://devnet.kentico.com/Blogs/Petr-Palas/October-2009/New-Licensing-for-Kentico-CMS-5-0.aspx) and (http://devnet.kentico.com/Blogs/Petr-Palas/November-2009/Kentico-CMS-Small-Business-License---Pricing.aspx). I know, each price increase is not popular and a bit unfriendly, but what’s behind these changes. I would like to show you, it’s not only about the product price, but there is a lot of behind.

As former Microsoftee I will make a short comparison with the licensing model of well-known company Microsoft. I will not focus on the prices as there are not comparable products. Yes, Microsoft has WSS/MOSS, but they are more focused on team collaboration than on true CMS functionality etc. License model in Microsoft is very similar to other companies.

1)      Basic difference

·         Kentico CMS license can be used for internal usage, internet projects, for your customers or in hosting space.

·         MS licenses are only for the internal usage. That means we can’t use it outside the company! For internet access we have to buy “Internet connector”, which costs in general as the base product. For hosting we have to be SPLA partner. To sell some MS products with our solution we have to sign Royalty agreement.

2)      Staging, backup, testing and developing servers

·         With Kentico CMS we obtain licenses for the staging servers, backup servers, testing servers and also for the development. We pay only for the active servers used as the front-end or in the web-farm.

·         In MS world we have to pay for all active servers in our company including backup, staging, testing or developer. We can be Microsoft Certified partner with MSDN subscription or to buy directly MSDN subscription. 1 MSDN subscription = 1 set of all MS products for the testing & developing purposes for 1 developer. Set of products depends on MSDN edition or type of Partnership and competencies in Partner program, but it’s still limited number and MSDN licenses are only for TEST & DEVELOPMNET and mustn’t be used for internal usage!

3)      Editions

·         Most software vendors use licensing model like Personal Edition, Standard Edition, Enterprise Edition etc. and licensing per user, per server, per CPU etc. It’s great concept for the software vendor and his revenue, but from the customers’ point of view, it is @#$#@@.

·         Kentico new license model is focused more on the type of usage than on the type of functionality. So, we decided to prepare packages and give our partners/customers the opportunity to select only packages they really need. This model also allows us to prepare new packages without any increase of the base license!
We will consider to prepare “pay per module” license model, but to be honest, it’s tooooo early to say, when and how.

4)      Localizations

·         At this time is Kentico CMS localized only into few languages. But, the resources for the translations are opened for everybody and we are supporting our “translation” partners.

·         In MS we have to always wait for the official language pack.

5)      Support

·         Kentico CMS licenses obtain UNLIMITED support for you. In 2010 we will start 24-hours support.

·         Support for MS products costs about $100 per incident. We can buy 5-packs, 10-packs etc. at better price. As certified partner we can have 2-4 incidents per year for free (depends on type of partnership etc.). This support is not for CUSTOMERS, they have to buy additional Premier support or similar.

6)      Bugs

·         We in Kentico have 7-days bug fixing policy for everybody.

·         In MS we have to buy the most expensive support to be VIP customer and obtain hotfix as fast as possible.

7)      Partner program

·         Partner program in Kentico is for free. We have partner prices which can be used for internal licenses or for the customers as well.

·         Microsoft Partner program is not for free. We pay yearly fee close to $1400. Price sale is only for the internal licenses and not for the customers. For better customers’ prices we have to be reseller or have royalty agreement etc.

8)      Market place

·         There are no licensing and other obstacles to include your modules etc. into Kentico Marketplace.

·         MS Marketplace is full of conditions for the products.

9)      Perpetual licences

·         Kentico licenses are perpetual for everyone.

·         Microsof has perpetual non-partner licenses. As Microsoft partner we have valid licenses only during our partnership with Microsoft.

 

Short summary:

Feature

Kentico CMS Licensing

Microsoft Licensing

Base license

$ xxxx

$ yyyy

Internet access

$ 0

$ yyyy

Staging server, backup server

$ 0

$ yyyy

Development & test server

$ 0

$ zzzz (for other server or for the MSDN)

Support partners

$ 0 (unlimited)

2-4 incidents free ($ zzzz for others)

Summary – 1 product license

$ XXXX (still the same price, there are no additional hidden costs)

$ several times higher than the original price YYYY

 

Hope, you better understand, it’s not only about the product price. As you can see, Kentico provides huge value included in the license.

 
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Michal Neuwirth

Comments

Yatharth jain commented on

I want the Exact basic difference in features of kentico 4.1 and kentico 5.0.

Michal Neuwirth commented on

Hi Xian,

it's not comparison of products, prices etc. But it's about the licensing approach.
Major software producers (including Microsoft) tend to push their partners/customers to buy the most expensive edition for some particular feature. We would like to change this approach and give our customers/partners the option to buy only modules they really need.

...and my job in Microsoft was Developer Evangelist. It's deep technical and developer focused person responsible for the platform adoption, partners/developers satisfaction etc. Evangelists are one o few positions without any sales related goals. More about this role here: http://developer-evangelism.com/, but thanks for the joke :)

Xian commented on

Hi Michal,

I'm sorry, but comparing Kentico to a completely different range of MS products makes no sense to me. In fact, the whole blog post doesn't make any sense at all, except for that it answers the title question.

Q: New Kentico licensing - what's behind?
A: A former Microsoftee ...

Michal Neuwirth commented on

M. Rutter,

I used comparison with MSDN, since it is the way how to obtain licenses for the test, development etc. and to show, our licenses are more transparent :)

There are two different versions of MSDN. You can buy MSDN "in the shop" or receive MSDN as part of your MS Partner benefits (Empower, Certified, Gold Certified). Partner MSDN is not perpetual, the second one is. There are also new "programs" for start-ups called BizSpark and HostSpark and licenses from Sparks programs are perpetual... A bit confused.

I understand your concerns about "pay per module" licensing. It is just an idea for the future which we will consider during the next year.

Thanks for your feedback, it's what we are looking for!

M. Rutter commented on

Dear Michal, thank you for your post.
I think that your comparison is not correct because you're mentioning an MSDN / MS Partner scenario (which is specific to development processes) versus a licensing system (Kentico CMS) that is target to end users (that is our customers).

Many times I written to Kentico that from my point of view (a developer and a Kentico Partner) you should apply the same policies as Microsoft distinguishing Kentico solutions developers from Kentico Resellers from Kentico Hosting and so on.

Moreover there are some mistakes in your comparison. I know MSDN Microsoft EULA very well and I can confirm you that:

* MS EULA rule 3.a: User Testing. Your end users may access the software to perform acceptance tests on your programs.

* MS EULA rule 3.g (valid form MSDN Premium): Desktop Application Software. For each license you acquire, the licensed user may also install and use one copy of the following desktop applications on one device for any purpose. [OMISSIS – Office 2007 Products]. This Desktop Applications section of these product use rights applies to the licensed user‟s use of the Desktop Application components of the software. These rights are in addition to the right to install the supplied products for the purpose of design, development, testing and demonstration of your programs.

Moreover MSDN subscription is permanent: when it expires you can still use products included in your subscription (you can read it by yourself in this link https://msdn.microsoft.com/en-us/subscriptions/securedownloads/cc150618.aspx). You cannot update them nor get new activation keys.

But let me say that this points are not interesting.


I would like to stress that Kentico should think of a flexible licensing model. Thinking to a per-module license model is not a good idea (from my point of view) because it’s very difficult to forecast customers needs and I think that it would be very cumbersome to manage licenses (license module A to customer B; customer C need module D – I don’t have it … ok purchase the license … and so on).

One of the big advantage in Kentico is that it’s a complete product. When I think to kentico I like to think that I have a complete toolset that covers major customers needs. Perhaps singles modules, taken by themselves, are not so good compared to marketplace (that is: does exists a better forum module than one implemented in kentico, a better survey module, a better e-commerce module, a better analytics module and so on) but I think that it’s hard to find all of them working “in peace” together. You should better highlight this advantage.

As always, thank you for sharing your opinion and to allow us to express ours.

Sincerely,
Marcello