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Should the SAP Conversion Agent by Itemfield be included in the base price?

Boy!  Did I get a lot of responses from yesterday’s blog about the new Conversion Agent!

There were two general threads to the discussion: first, those of you who have seen the tool agree that it is very impressive.  Of course I’m delighted to hear that, becasue I think the tool is really great.  But the other thread to the conversation, which was pretty consistent, was that people felt like the product should be inlcuded in the SAP NetWeaver XI license.  That’s the part I’d like to talk about.

SAP NetWeaver Exchange Infrastructure ships with an impressive array of built-in features, and is priced accordingly.  Of course, if you need functionality that is not part of the basic feature set – say, a CICS adapter for mainframe connectivity – then you can buy that adapter from our partner iWay.  But you only pay for what you need.  If that adapter – or the SAP Conversion Agent by Itemfield, for that matter – were included in the base price, then we would have to raise the base price (after all, these things don’t come for free.  Our partners and we have a lot invested in them, and we all need to make profit). Then customers would have to pay for features they don’t want or need.  Why should you pay for the conversion agent if you don’t use it?

The XI pricing model is consistent with the way that most integration vendors price their products.  While there is always a sticker shock effect when evaluating software purchases, I believe that we are pretty reasonably priced.  One very large customer recently evaluated SAP NetWeaver XI against one of the major players in the integration market; and what they concluded from their analysis was that, when you consider not just the purchase price, but the true cost of messaging, including the cost to maintain the infrastructure, the cost of making changes, etc., SAP NetWeaver XI was actually the more cost-effective solution.

Partners, and the partner ecosystem, are crucial elements of the SAP strategy moving forward. For examples, see I LOVE Open Source—Really!, or my June blog on the SAP Launches Inititative for Industry Content.  But we can only have a large, robust, and productive partner community if there is the opportunity for people and organizations to be rewarded for their contributions. 

There’s no free lunch in this world.  You pay for what you get (wow! two cliches in a row!) – and hopefully you pay a fair price.  Ultimately, it is up to the market to determine that.

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4 Comments

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  1. Michal Krawczyk
    Hi 🙂

    let’s say XI costs 100 SDN dollars 🙂

    conversion agent – 10

    if itemfield is sold for every 10 th XI’s installation then Intefield gets 10 SDN dollars

    but if XI costs 101 then the price is only a little bit bigger and itemfield gets it’s 10 SDN dollars don’t they – for ten XI installation too?

    Itemfiled is happy – cause they get their 10 SDN dollars + their product is very popular

    developers are happy cause they can use conversion agent for 1/10 of a price…

    everyone is happy:)

    so who’s buying the lunch? 🙂

    Regards,
    michal

    (0) 
    1. Alessandro Guarneri
      I agree with Michal’s comment.
      Plus, Conversion Agent is in XI std help… So one could easily expect it to be a std functionality, and get disappointed by discovering it needs additional licensing.
      Btw, has something changed since this wl was written?

      Cheers,
      Alex

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    2. Henrique Pinto
      It’s been a while, but I’d like to give my opinion anyway.

      It’s true that the users would be happy and, from a software license point of view, the income would be the same. But however, the costs of maintenance (processing OSS messages, correcting errors etc) would multiply by the number of customers. In your case, it would be multiplied by 10 (10x more OSS messages mean 10x more required support resources + 10x more demmand for development corrections etc). On the other hand, the support revenue income related to conversion agent would be constant (22% * 10k in both cases).

      So, it’s not like the account will sum up…

      (0) 

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