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I used to work on storage software pricing. We would charge 60% of the value it would bring our customer - based off of the classic behavioral game theory exper
by jmpman 2y ago
I used to work on storage software pricing. We would charge 60% of the value it would bring our customer - based off of the classic behavioral game theory experiment, Dollar Auction. Our customers surprisingly didn’t object.
- supermatt 2y agoHow did you calculate value - if it's based on savings over traditional storage, wouldn't the profit also be capped by the same amount?
- jmpman 2y agoThis was an OEM storage offering back when we sold hard drives. We found a software improvement to our storage arrays which resulted in the customer needing fewer drives. Let’s say that instead of them needing 100 drives, with the software, they only needed 90 drives. So, we would sell them the 90 drives, and a software feature key that cost the equivalent of 6 drives.
- adammarples 2y agoHow is the dollar auction remotely a model for bidding on software and how did it help you arrive at 60%?
- jmpman 2y agoWe had an OEM relationship with the vendor. Basically one where we didn’t want to upset our long standing goodwill. The dollar auction is accepted at 100% when you offer to keep 60%, suggesting that the receipt does not consider that an insulting offer.
- jmpman 2y agoPardon it was the Ultimatum Game, not the dollar auction.