In a recent post, The State of FileMaker 13, a couple of readers wrote comments expressing frustration with the licensing costs of FileMaker 13, especially FileMaker Go. Since it seems to be a controversial topic, here are my thoughts.
A History Lesson
Before FileMaker Go, the FileMaker family consisted of FileMaker Pro (client) and FileMaker Server. FileMaker Pro was sold (and still is) by the number of installs, starting around $300 per computer. FileMaker Server was sold for a fixed price of $1,000.
Then in 2010 (circa FileMaker Pro 11), FileMaker, Inc., (FMI) released FileMaker Go. It was originally two separate apps, one for the iPhone and another for the iPad. The price of the iPhone app was $20 and the iPad app was $40. Each app was a one-time purchase for unlimited use.
$20/$40 is considered expensive for apps in the App Store. Although there are other apps with premium prices, these prices did deter some customers from using FileMaker Go. It also made it challenging for companies to submit payment and then install the app on multiple devices through iTunes.
The Next Step
When FileMaker 12 was released, FMI made FileMaker Go 12 a free app. Anyone could download it from the App Store. This was a great marketing move because it removed two significant barriers:
- You did not have to pay for it to test it, and
- Anyone could and install it through the App Store.
During the FileMaker 12 product life cycle, customers got used to using FileMaker Go for free. In fact, if your database was uploaded to a hosting provider, you could deploy a FileMaker solution to iOS devices for as little as $29/month. This was great for users because anyone could get up and running for almost nothing. And, it was good for FMI, for a while.
The market penetration that FMI received from making FileMaker Go 12 was good for the company and the community. However, if you know anything about pricing (one of my favorite topics), a penetration strategy is not financially stable indefinitely. At some point, the company must pivot and make a return on the investment (ROI). And that is what FMI did with FileMaker Go 13.
FileMaker Go Today
At the 2013 FileMaker Developer Conference, FMI showed a preview of the FileMaker 13 product line. Many of the new features were designed to help developers and users create more effective mobile solutions. There was also an “Under the Hood” where Dominique Goupil, president of FMI, suggested the licensing model for FileMaker 13 would evolve. Although he did not give specifics, it was a heads up that a change was coming.
When FileMaker 13 shipped, the licensing for FileMaker Pro (per install) and FileMaker Server (fixed price) remained the same. FileMaker Go remained a free app to download. So, users could continue to use it for a stand-alone solution at no cost. The change was the price to connect to FileMaker Server.
The new licensing model uses concurrent connections. If you have an average of 5 users connecting to FileMaker Server with FileMaker Go, then you need to purchase 5 connection licenses. If you have an average of 10, you need 10 licenses. The cost per license starts at $180 per connection depending on the total number of licenses. If you need more connections, you can purchase them directly in the FileMaker Server admin console. (FMI is also using the same licensing model for WebDirect.)
Is It Fair?
This is the real question people are asking. On the surface, moving from paid to free, back to paid seems like bait-and-switch. However, you can also view it as FMI experimenting with how to price a new product. Think about your own business. How do you learn to price something? You experiment, or at least you should. FMI had to try different strategies to find the right one. Also, it is completely fair for FMI to recoup its investment in FileMaker Go.
If it is fair, then the next question is, “Does the new licensing model work for you?” First, realize there are a couple of different ways to buy licenses. The $180 per concurrent license is for a volume license (one-time fee). FMI also offers annual licensing which gives you the ability to pay a reduced price each year. The annual cost for a concurrent license starts at $60. If price is your objection, then consider annual licensing.
Second, what is the value you receive from using FileMaker Go? Does using your solution on the iPhone or iPad create more revenue than the cost of the volume or annual license? I would suggest you are probably making at least 10 times (or greater) the revenue vs. the cost. What is the benefit to your gross revenue, gross profit, cost savings, productivity, customer service, quality of life, etc., from your mobile solution? If you do the math, I think you will see things in a different light.
Do you agree or disagree? Do you think FMI is right or wrong with the pricing of FileMaker 13? You can leave a comment using the form below.