Agile PM Tools: Per-user pricing considered harmful

Posted on June 1st, 2009 in Silver Catalyst, Tool by siddharta || 1 Comment

If you look around the agile project management tools landscape – and it is now a rather big landscape – you’ll notice something strikingly odd. What I’m talking about is the pricing model for most of these tools. Almost all the tools follow a per-user pricing model. In other words, if you add more users into the system, the cost goes up.

Why is this odd? Because the primary purpose of an agile or scrum project management tool is to increase visibility through the organisation. But per-user pricing actually does the opposite – it encourages companies to reduce the number of users who have accounts in the tool.

Companies know that they need to pay for every single person that gets added in. The natural response is to figure out the absolute minimum number of people who need to be involved in the tool. Everyone else gets information outside the tool through emails or meetings.

At the extreme end, you could have a situation where a few users proxy the entire team – one account for all stakeholders to use,  one for all the testers and so on – all to reduce the number of live accounts in the system.

I understand the need for agile tool vendors to scale the pricing as usage increases. After all, we are an agile tool company too. But the per-user model is actively harmful for agile teams.

There are other ways to scale pricing.

A per-project pricing model is one of them. That’s what we decided to use for Silver Catalyst. We wanted a situation where teams could add users to the system without thinking twice about it

Another model is to charge extra for additional features. Many of the larger vendors do this too in the form of different editions aimed at small teams and large enterprises. We do this through hosted and on-site versions.

These and many other models are fine for agile teams. But per-user pricing can cause side effects that are especially bad for agile teams.

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One Response to “Agile PM Tools: Per-user pricing considered harmful”

  1. New Silver Catalyst Pricing Model » Silver Stripe Blog » Blog Archive Says:

    […] have previously blogged about why per user models are harmful for agile teams. The short summary of that article is that user based pricing encourages teams to reduce the number […]

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