How much to charge for cloud-based CAD?

There was an elephant in the Anaheim Convention Center last week, and it took the form of this unanswered question: "How much?"

How much will it cost to add cloud-based services to SolidWorks that store files, perform calculations, and collaborate with servers run by Dassault Systemes and contractors? How much will cloud-based SolidWorks cost?

(The question bothered resellers especially, but also worried third-party developers and even a few customers.)

The ceos of DS and SW did not know, except to say that (a) the licensing might be monthly or annually and (b) it would be cheaper for customers. 

(Item b was qualified in this way: the cloud payments would cheaper than buying and maintaining your own server and database software in your office. To that, I would add, "Maybe.")

We have a hint from Arena, whose cloud-based bill of material application for SolidWorks users costs $99 per month.
 
In my opinion, DS will charge a price that allows them to profit more from cloud-based SolidWorks -- my guess is that it will be roughly double the current annual maintenance fee, the "savings" to the customer coming from no upfront $5000 payment for the CD. 
 
Resellers, on the other hand, will be screwed. 

On another topic...

As Deelip Menezes asked at a SWW press conference, "How will third-party developers run on SolidWork's cloud?" Also something the ceos had no answer for, and one that Arena will also be interested in learning: how will the servers of their cloud-based BOM interact with those of DS?

Also of interest is Arena's chart of uptime, which is defined as "number of minutes in the specified period during which Arena was scheduled to be available by Arena Solutions, excluding pre-announced downtimes during weekend hours": arenasolutions.com/uptime.

Comments

[John]

Why should cloud computing cost more than the current delivery model?

With cloud computing, software piracy could be greatly reduced or eliminated. This alone could result in a reduction of license fees.

Given that resellers would still be required to promote, teach and support the software, why would they be screwed?

[Kevin Quigley]

I think the biggest challenge for software companies with cloud delivery is persuading customers in different locations to pay different prices. When I used Think3 software, which was an annual rental the price was the same everywhere. If SolidWorks, Autodesk etc go cloud can they continue to argue that local distribution and support is the reason for huge price differences? No.

If it means we all pay USA prices then great, I'm all for it.

[Account Deleted]

Kevin: "If SolidWorks, Autodesk etc go cloud can they continue to argue that local distribution and support is the reason for huge price differences?"

Frankly I am surprised that people buy that argument. The last time I checked the Indian rupee to the US Dollar was about 46:1. So CAD software should cost tens of times lower in India, right? It doesn't. This only goes to show the extent of crap that CAD vendors continue to dish out and the extent of crap that their customers continue to consume.

[Kevin Quigley]

Deelip, this is one battle I have personally been fighting for 20 years. I have come across some companies that do have a world-wide pricing policy subject to local tax variations (and of course you do have to set prices at some point in time when dealing with VARs). These companies also tend to be the ones who actually have pricing on their websites! Amazing that! pricing!

The really bad offenders in the USA=low price, everywhere else="let's fleece them for every penny" are Solidworks, Autodesk, PTC and Siemens. Funny how all the mainstream systems have similar policies isn't it?

Even Alibre, when they started selling Alibre Design had the system (which was web delivered direct from the USA at the time) had USA pricing of $499 and UK pricing of £499 - at a time when you were getting nearly 2 dollars to the pound. When I was contacted by Alibre's sales team from the USA I explained this and they gave me the same old BS as all the rest.

I wouldn't object IF there really were huge extra costs but over the last 10 years the actual cost of software delivery has fallen dramatically, and they now have worldwide development in the USA, UK, India etc.

Whenever I complain about this on forums I tend to get shouted down by USA based users who basically say "not my problem". I think they are worried that their prices will increase!

It is not down to greedy VARs either. I spoke to a reseller of SolidWorks here and he said he could make more profit to fly to the USA, buy a single seat of SolidWorks Standard and fly back and sell it here at the UK price. But the license doesn't allow that.

If the cloud stuff changes all that crap then I'm all for it. But I bet this side of the equation stays exactly as it does now!

[R. Paul Waddington]

Deelip said;
"This only goes to show the extent of crap that CAD vendors continue to dish out and the extent of crap that their customers continue to consume."

And like lambs to the slaughter customers continue to accept the un-acceptable!

[matt lombard]

I think SolidWorks in the cloud will be more expensive than a disk because if it isn't, if customer costs actually go down, that means that DS is leaving money on the table. No self respecting salesman would ever allow that to happen. "Look at all of this additional service that we provide now, this is worth much more than you were paying before"

I say brace for impact. Cloud SolidWorks is going to be priced like the fashion fad accessory that it is. You will pay a premium to not have it on your local machine.

[Henrik Vallgren]

One way to look at the cloud is that it solves the "existing users only pays upgrade fees" problem. Every client can be expected to start paying from scratch.