Revisiting the idea of fixed prices for support

By Technical Support

We’ve talked about fixed pricing before on this blog (here and here), mostly as an alternative to the common practice of pricing support as a percentage of the base license fee, a standard approach in the high end. Although I’m not necessarily a fan of fixed pricing because I’m concerned that it may create some missed opportunities in the high end one area where fixed pricing may be particularly strong is in resisting discounts. As we know customers often obtain very significant discounts on software licenses. If you compute your support prices from the license price, a generous license discount will translate into an even more generous support discount (assuming that you calculate pricing from the discounted price.) So starting with a fixed price may help you avoid runaway support discounts.

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