Why Conformiq Designer Costs ______

Dec 8, 2011 | Frequently Asked Questions

Please excuse the blunt title of this post.

It is an FAQ why Conformiq Designer costs exactly as much as it does, and here are some answers. (Note that this post is not about the actual price itself, but only about the pricing logic.)

Software license prices are obviously not based on production costs plus margins, nor on the rules of varying supply and demand, as software licenses are immaterial and their production costs are near to zero. Conformiq Designer pricing is set primarily based on value analysis and secondarily on market perception and established price points.

Value Analysis

Value analysis starts from our consistent benchmark results that show 80% time reduction in test case design efforts, and derives further inputs from our direct knowledge of how the use of our tool has changed budgeting and planning rules within our customers’ operations. 80% time reduction in test case design corresponds to 5X productivity within that task. Most of our customers capitalize this productivity improvement not so much by reducing testing costs as by improving test coverage. This means that if an engineer used to spend 50% of his or her working time on test design and implementation, that engineer would spend still 50% of the available working time on those tasks, but produce 5 times more testing assets than previously.

If the total, fully-loaded cost of a test design engineer is $100.000 / a, a conservative estimate for the economic value from using Conformiq Designer is then 50% * $100.000 * (5 – 1) = $200.000 / a / engineer. This of course does not take into account any risk or other factors. But even adjusted down for risk and a reasonable return on investment, the adjusted value remains much higher than the actual cost of Conformiq Designer.

Market Perception

Because of this simplified analysis and because we stand behind it, we also cannot sell the tool for $199 per year as long as we follow somehow value-based pricing. It would be in a blatant contradiction with our message that using system model driven test generation results in an improvement of not 1% or 5% or 10% but in an improvement of 200% or 400% or 600%.

There is also some general confusion on the market place, caused by the fact that the term “model-based testing” is applied widely to denote all kinds of generative testing solutions that in practice differ very much from each other. Sometimes this confusion also impacts price perception, i.e. people compare the prices of two completely different products as if they belonged to the very same software tools category and as if they produced the same business results. Caveat emptor.

Semi-Established Price

The Conformiq Designer price point is also established to some extent, in the sense that we sell the tool to our customers at the same price point since multiple years, and those who use the tool successfully seem to receive economic benefits that surpass the tool prices they pay.

Future of Conformiq Pricing

This of course does not mean that we wouldn’t be evaluating our pricing system continuously to support the market as well as we can. We also understand the realities of companies who are interested in Conformiq model-based testing but perceive beforehand multiple risks in a potential deployment, including unknown technology problems or skill set development challenges. In order to counter the perceived risks, we offer flexible tools for researching and trying out our offering before making larger commitments.

Furthermore, it can be expected that when advanced model-based testing moves more and more to the mainstream, competition and market size will drive the cost of the tools down and will force a move from value-based pricing towards a more purely market-driven pricing logic.

But today, the fundamental question is whether you can purchase Conformiq Designer from us so that you will receive significant and risk-free economic benefits. And we believe you can, because we want that you do.