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September 08, 2009

Do you drive on freeways?

We've worked with most of the major commercial search vendors for a long time. We can go back and talk about companies that were once leaders in the space, companies most people have never heard of: Excalibur... Conquest.. Fulcrum... Verity, and more. We continue to work with the best of commercial and open source technologies to give our customers solutions that meet their needs.

A major trend we've written about before and the we see continuing over the next couple of years is the significant reduction in price for what are now best in breed technologies in the space. This is being driven by of couple of factors, including increasing functionality in open source alternatives Lucene and Solr; and the acquisition of FAST by Microsoft, with the anticipated integration of FAST ESP into SharePoint, which many feel will result in a much lower price point.

Lately, we've seen a few major vendors engaging in some pretty severe obfuscation in their licensing parameters. I'm not sure it's a remnant of the 'good old days', or a last-ditch attempt to extract as much revenue as possible before the inevitable collapse in licensing costs we've talked about before. Let me explain, by way of analogy.

You want to buy a new car. You tell the sales person your budget range, and she shows you a model that is about three times what want to spend. When you point this out to her, she acknowledges the 'oversight' in passing, and suggests that if you don't need the backseat, she could take 10% off the cost. And if you insist, she could sell you a car with no reverse and save you maybe an additional 5%. And if you were willing to get in through the window, she could weld the door shut and reduce the price a bit more. Her final offer, still about 15% above your price range, would be for a car with no motor. Are you ready to buy?

Down the street at another dealer, you start over. His burning question is 'What kind of roads do you drive on?'. You see, if you never plan to exceed 55 miles per hour, he can sell you the car for just about what your budget is. You decide that's a pretty good deal, so you buy the car. A month later, you get a call from their global maintenance organization: it seems that you have actually driven your car closer to 65 MPH on several occasions, and your new price is 25% more than you paid. You have 30 days to send in the different, or your car will stop working. Can you hear me now?

A final dealership you now wish you had visited can pretty much give you the car for free. You'll have to assemble it, of course, but you can make it do anything you want. There's another company you can go to that will put it together for you - in fact, there are a number of them. One will even assemble it for you, and charge you an annual fee in case you have any issues. And their guys review the design on most of the parts, so you know they are pros and you can trust them.

Glad that search engines are not like cars? Or are they? This is one reason we really encourage you to use a skilled, competent partner to specify your requirements and to help you navigate the sometimes treacherous waters of acquiring enterprise search technology.

s/Miles

 

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Comments

Reminds me of Neal Stephenson's extended satirical piece relating operating system vendors to car dealers from the chapter "MGBs, Tanks, and Batmobiles" of his book "In the Beginning ... was the Command Line".

Enterprise search vendors are stuck in a bad place. Customers think that they are paying for a search engine, and robust, mainstream search technology (Lucene) is free. What costs money is QA'ing connectors to the last five versions of twenty "critical" software packages on four platforms ("do you support Django on Amiga?").

If vendors passed through the costs, it would cost a pile of money for connectors and the engine would be cheap. But that would lock out the small customers (like local government) and confuse the rest, so we end up with the current licensing schemes.

A connector-oriented market does favor big players. They can amortize the connectors over more customers.

Thank you for this great post! It is heartwarming to see that I'm not the only one argumenting along these lines.

Still it seems that it will be a long way for search enginge vendors to adopt proven (and customer-orientied) pricing modells used in more mature markets (e.g., see discussion on LinkedIn: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=161594&discussionID=5993287&sik=1252486922887&trk=ug_qa_q&goback=.ana_161594_1250523693020_3_1.ana_161594_1252486922887_3_1)

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