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In previous roles I assessed and procured new technology products, particularly social media tools, and I was on the receiving end of a lot of pitches. I now pitch digital and social media technology myself, and one thing I've always needed to be crystal clear on is pricing. And I've never known an industry where pricing changes more than in tech. But then, I've never worked in corporate finance.
In the golden years of desktop application software the client paid for a license, an actual piece of paper in ye olden days. SaaS pretty much ended that. Typically you buy seats, a kind of per user license arrangement not unlike the old Client Access License of Microsoft yore.
Then the market shifted again. The always on, ever changing, demand driven, global economy spinning like a roulette wheel. Next it was data. How much data? So you paid for the volume. How many bytes, how many mentions? And everyone watched the overage charges.
Not long after I started seeing pricing models based around concurrent users, and I liked that. It felt smarter and fairer. The vendor can scale smoothly up and down. All powered by the march of ever decreasing IaaS costs. The client gets the benefit of a commercial model that maps to shift patterns and seasonal cycles. Brilliant.
But very recently, perhaps only in the last year I've seen something else. A price point that isn't really a price point at all, per se. In this new model you pay for complexity. The data is cheap, dirt cheap. User access is so elastic it has it's own event horizon. Now, you remunerate inconvenience.
I almost said processing power. Which might be technically accurate, to a point. The more variables, the more processes required. If they support a structured outcome (rather than a raw firehose of data) the more computing power you need. But that only applies to pure automation.
The really good products. Those with human insight and human intelligence. They have actual humans working on the data. Refining it, enriching it and applying emotional intelligence. Nuance, sentiment...sarcasm! What you pay for is the enormous variability and ultimately bespoke work load of highly specialised people. And outsourcing that colossal inconvenience.
And it's worth it because machines do the heavy lifting, the industrial data crunching. Humans add the really smart, wow experiences. So we're not quite ready for our robot overlords just yet. Nor are we ready to escape the confines of the flesh and upload ourselves into an omniscient hive mind.
Social media strategy can get complicated. Have you set objectives? What are you trying to achieve? Are you monitoring, engaging, advertising? All of the above perhaps. Who is your audience, who are your customers and what relationship do you want with them? Seemingly infinite requirements can be met with almost infinite complexity.
Successful businesses of the future will be those that understand and manage intricate variations at scale. If everything is customised, for everyone, the challenge to overcome is the burden of the elaborate. So the next time you find yourself paying for complexity, please remember, you never had such great value.