Apotheker: When you sell something that generates a loft of value, you need to ask yourself how to price it. Should it be the cost of production? Or could it be the value it generates for the customer. We want to see whether we can offer a mix of pricing that would combine user pricing, which is a standard metric, and engine pricing, which is also a standard pricing metric, with some process for value-based pricing. We essentially need to agree on what value a piece of software can generate for the customer. This is easier said than done but we have developed a methodology for this.
IDGNS: This sounds very challenging. Has anyone attempted a value-based pricing model?
Apotheker: Yes, for some consulting services. We see metrics that we can apply to software as well.
IDGNS: When do you plan to offer value-based pricing?
Apotheker: Probably for the 2006 price list.