Solid Edge subscription: global pricing gone missing

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Solid Edge has the tools, but it’s the subscription that might cause the problem

Talked about at Solid Edge University earlier this year, Siemens PLM has launched its subscription plans for Solid Edge.

The current offering, which we’ll be digging into later, is being made available in three regions: the US, the UK and Japan.

The background to this is a partnership that Siemens has had with Local Motors for some time with the Solid Edge Design1 offering.

This saw those engaged with the crowd sourced engineering community offered a ‘modelling only’ version of the system for $19.95 per month.

Alongside this, there are upgrade options available giving access to all of the products bundles on a monthly basis with the full suite of tools (including simulation etc) for $299.

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Now the team has decided to roll this out to a wider audience. So how does it work?

How much bang for your buck?

There are four flavours of Sold Edge to choose from. These reflect Siemens’ efforts to simplify the product offerings that surround Solid Edge.

To be honest, compared to some of its previous exercises, this is gratifyingly transparent.

Solid Edge Design and Drafting: That’s parts, assemblies and drawings.

Solid Edge Foundation: All of the above but with sheet metal, weldment, frame deign and exploded configurations.

Solid Edge Classic: All of the above with motion simulation, basic FEA, rendering, data management and the engineering calculations tools.

Solid Edge Premium: This is the all singing, all dancing version that adds in pipe routing, wire harness design and the full FEA suite of tools (note: the integrated tools, rather than FEMAP).

Buy it. Use it

This shouldn’t be confused with a cloud-based subscription à la Autodesk Fusion 360.

It’s essentially licensing/renting your traditionally installed software on a month by month basis. You sign up, purchase the license (credit card or PayPal only), download the software install and license it.

It’s then available to use as you see fit., and multiples can be purchase in one go if you need them.

There’s no lock in for an annual contract, no enforcing of cloud-based storage. Buy the software, license it, go.

The software is node locked to a specific machine and that machine needs to get online just once in the first 10 days of each month for it to be automatically updated. Automatic renewal isn’t enforced at the point of sale.

Support it?

That monthly cost includes not only the software, but also support at a local level. This was something Siemens was keen to point out, as John Fox, Siemens VP of Marketing commented: “Our channel partners are very much involved in providing product support for the subscription plans, as they always have been under the perpetual license model.

“I don’t think we dwelled too much on this during our call, but I think that’s one of the unique values of the Solid Edge subscription – the subscription price includes customer support delivered by a local partner.”

The question of VAR involvement in the process is an interesting one. We’re all aware that the software world is shifting towards a different delivery mechanism (Yup. The C word).

What isn’t changing is that people buy from people and the local VAR is still a key part in many sales of professional software. An online sale would, at first glance, look to remove the human factor from the process.

The reality is that for many, there’s a need for support both before and after the sales process. Also, many organisations in the SME market have long standing relationships with their VARs.

The software being sold might change (VARs will and do change ‘sides’), but what drives it are those personal/business relationships – as archaic as that may seem.

The software developers need VARs on the ground, maintaining the customer relationships and pushing the software just as much as the VARs need good tools to sell (though I’d argue that the former is more key).

Prices… Here comes the crunch

So. How much? The answer depends on where you live.

Lets break it down like this:

Solid Edge Design and Drafting: In the UK this is £140.00. In the US, it’s $130.00 (£84)
Solid Edge Foundation: In the UK, this is £220. In the US, it’s $220.00 (£142).
Solid Edge Classic: In the UK, this is £260. In the US, it’s $260.00 (£168).
Solid Edge Premium: In the UK, this is £360. In the US, it’s $350.00 (£225).

Things to note: the US prices don’t include sales tax. The UK prices do include VAT at 20 per cent. And I’ve no idea what the Japanese pricing is. And the GBP price conversions are based on today’s exchange rate)

Even with the taxation difference, you’re still looking at a paying a third more in the UK for the same software and same support. Oh. The outrage I can feel brewing.

Let’s be honest, this isn’t a new concept. If you look at product prices across the board from consumer electronics to the price of a pint of milk, the cost variation between the UK and the US is always apparent. But is it?

The US prices never include sales tax, which varies by state quite dramatically. Some states charge similar percentages while some charge none or little at all.

So is it down to the oft quoted “price of doing business”?

John Fox used that same excuse reason explaining that “The price reflects local conditions, for example the cost of local support and VAT – it’s not only attributable to VAT. The online store is available in specific countries (right now, US, UK, and Japan) and only allows purchases from within that country.”

That’s always a good one.

Is the UK really that much more expensive to live in than the US? ‘Depends’ is, of course, the answer and it depends on which cities you compare.

Compare averages, and you get massive variation. London to San Franciso, and London is more costly. Compare San Francisco to Birmingham, the UK is 20 percent cheaper.

Don’t believe me? Have a play with an of the cost of living calculators online (Numbeo have a good one). It’s truly swings and roundabouts.

This has been the status quo for the professional technology industry for some time. The UK is seen as an economy that can stand higher prices, however begrudgingly.

A well known automotive industry trade association used to refer to the UK as Treasure Island for just this reason.

But are times changing?

New game. New rules

If you look at the burgeoning service based software industry, you can see that times are indeed changing.

Salesforce.com has a series of offerings, in dollars as a global price as does dropbox.com. The list goes on.

In the 3D design sector, both Autodesk and GrabCAD.com have global pricing. McNeel is famed for having global pricing for Rhino. It’s set at what the lowest economic country can afford (I dimly recall Vietnam was the benchmark some time ago).

This is what consumers and pros alike have come to expect. Buy software on a subscription basis at a global price.

The use of dollars for pounds conversion (3,000 dollars magically becoming 3,000 quid) is an artefact of how business used to be done in software world.

20 years ago, users weren’t connected so vendors could essentially charge whatever they wanted. We had a vague idea that things were cheaper elsewhere it but that was about it.

Now the information is available at the flick of a toggle on a website.

Let’s be clear, Siemens is by no means alone in this. In the traditionally sold software industry, it’s rampant.

Is it fair? No. Can it be justified by evoking ‘the cost of doing business’? No. I don’t believe, as things progress, that it can.

So who is the target market for this?

Here’s a couple of scenarios I can imagine playing out and where this might prove useful:

#1 Solid Edge user that needs more advanced tools:
You have a couple of seats of Solid Edge and suddenly have a project that requires, say, simulation. License the seat you want, use it for the months that you need it, dump it when you don’t.

#2 Solid Edge user that takes on a contractor:
You need a hand with a project, hire in temp staff, rent their seats for their contract period, dump it when the contract ends.

#3 You use another system but need Solid Edge:
You get a contract that requires Solid Edge. Rent it to get the project done. Finished.

Conversely, there’s also a set of instances where picking up the phone and buying it from your local VAR is not only more economical, but more sensible.

The main criterion here is length of investment.

If you’re interested in Solid Edge as your main workhorse tool, you’d typically be looking at a serious commitment of time and resources. Lets look at taking Solid Edge Classic over five years for two seats.

With rental you’re looking at £260 per month for 60 months x 2 costing you £31,200. Assuming you claim back 20% of that with VAT, you’re looking at a total bill of £24,960.

The same but with a VAR is £5,130 upfront per seat then five years of annual maintenance at £1,150 per seat is £21,760.

And that’s list price. No-one pays list price.

There’s also benefits to having that cap ex upfront if you have a sharp accountant.

If you phone a VAR with this in mind, I’m pretty sure you could come up with an even better deal, save money, build a relationship, build in training and assistance.

Last year, many Solid Edge VARs ran a promotion to SolidWorks users that gave them access to Solid Edge Premium for just the cost of subscription.

That type of thing, while time limited, can be dramatically cheaper than a rental option.

Even the team at Solid Edge and those responsible for putting this together admit that there are many instances were working directly with your VAR is more economical and kudos for that.

Conclusion

The idea of being able to quickly and efficiently adjust your software capabilities, either the of number of seats or functionality, is an entirely valid one.

Also, the ability to more closely fine tune the period for which you’re paying for software as projects demand is similarly beneficial to many organisations.

It can help cash flow and remove the need for heavy investment upfront.

Siemens has announced something that could prove useful to many of its existing customers but what I can’t see is how it can overcome the benefits of a good working relationship with a VAR.

A good VAR is worth his weight in gold.

He’ll help with costs, training, and support. Imagine the situations listed above. Most are those situations that a call to a friendly VAR would solve just as quickly and I’d bet, more cost efficiently in many cases. That’s my historical experience and that of many others I’ve met over the years.

The question of pricing differentials is something that I still dislike.

It’s not just down to Siemens, but I think considering that Siemens is announcing this now, from fresh, they could have looked at how customers’ expectations are shifting.

Global pricing is the future for subscription-based software, just as global working is becoming the norm of how it’s used. I think it’s time Siemens took that on-board.

The days of dramatically variable costs and node-locked licenses are, if not over, certainly in their twilight. After all, the most common (as far as I can see) usage scenario is that existing users of Solid Edge want an extra seat for a month or two. That doesn’t really need VAR involvement, so the whole “cost of doing business” argument shouldn’t be a factor. It’s a download. And a download shouldn’t be a third more expensive in the UK than it is in the US.

If Siemens had put out a method of using Solid Edge where you need it, perhaps tied to an email address and delivered it at a cost that’s reasonable, this could have been major news for not just its existing community but the 3D design using community at large.

Remember, while Autodesk’s Fusion 360 is a much less powerful tool, the benchmark has been set at $25 a month, globally.

Yes, I’m purposefully comparing apples and oranges here. This is more about customer expectations not technicalities of software.

What Siemens has launched doesn’t change anything. It’s a way of renting your software. And a costly one at that, unless you really do want it for just a month or two.


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