Pricing for Foreign Markets - Autodesk Gets It

In her quest for world domination, Carol Bartz, previous CEO of Autodesk, returned from a trip to India with the realization that selling software for one price regardless of location was not going to work*. Software that may have been priced right for the US market (fast approaching saturation) was priced utterly wrong for countries like India. Software that costs many times the average workers salary can be quite unattainable in such a country. Or should I say, a legal version can be quite unattainable?

This realization has resulted in "geography-based" pricing for Autodesk products. Prices in India have take at least a step in the right direction. Inventor is about half of what it costs in the US. So, I am told, is other Autodesk software.

What is to prevent software bought in a country with "geography-based" pricing being used in the United States? For one thing, the end user license agreement (EULA)--the fine print no one bothers to read as they are in too much of a hurry to install the software.

Unlike material goods such as cars, coffee, clothes, etc. which have an intrinsic value based upon their ingredients, software has the luxury of bearing whatever price the market can bear. The cost of a CD or a download is negligible. Once software investment (the cost of writing and testing the code) has been recouped, additional licenses can be distributed for next to nothing. Of course, this thinking does not take into account support but as we know, software support can and has been established very inexpensively overseas.

*Source: Jim Lynch, VP Marketing, Autodesk Building Solutions

Comments

[Jason]

Well Carol Bartz already stated one time that Autodesk was in business to make money, not wave the American Flag in regards to using programmers from China and India. In that regard, they probably don't care if more jobs are sent to India or China as long as they get some of the $$$.

http://www.awprofessional.com/articles/article.asp?p=173977&seqNum=3&rl=1

[Richard Williams]

Wow talk about inequities? I wish the drug companies charged higher for overseas shipments like Autodesk. We pay more here for drugs then for the same drugs in most other places outside of the USA. What kind of marketing schools did the Architectural firms and Drug companies go to? They had to be different.

[Wes Macaulay]

One outcome from this that is now places like India can get software and labour cheap. What's to prevent them from consulting back to the North American design market?

[Ralph Grabowski]

Autodesk doesn't have a "one price regardless of location" policy. That's pure spin.

The price of Autodesk software is artificially higher outside of the United States, even in Canada. By "artificial" I mean higher than can be accounted for by the exchange rate and taxes. Just check out the prices on the company's own international Web pages.

I have pointed out these inequities for many years; most software companies engage in overcharging overseas. Until now, the excuse for higher pricing was blamed by CAD vendors on the costs of internationalization.

While Carol Bartz was CEO, she had a deliberate policy of charging far more for AutoCAD LT in Asia. I dunno why. New Zealanders complain to me that they pay triple the price for LT.

It takes a trip to India to receive enlightenment? Autodesk has a new external PR firm, and I wonder if they're behind this.

A former CADKEY executive explained they allowed international distributors to set prices that met local conditions.

And recall Martyn Day wrote in my upFront.eZine of the policy by some CAD vendors to provide software free in China, because they can't sell it anyhow. We saw a similar move by think3 recently.

It sounds more like "we can't fight the price of pirated software, so let's price our software like pirates."