Flexible pricing produces quick solution for CNT, possible lesson for software vendors
By Staff -- Manufacturing Business Technology, 9/1/2004 6:00:00 AM
Software vendors still wondering why sales are stagnating despite the signs pointing to a recovering economy might want to consider what recently transpired at CNT, a Minneapolis-based supplier of storage networking systems.
The engineering department wanted to revamp its mostly manual change order process, but it couldn't afford any of the well-known product life-cycle management (PLM) packages. "They were all too expensive for us to purchase without direct CEO approval," says Curt Carlson, CNT's manager of configuration management.
Even if he had been inclined to do so, Carlson says, it would have taken too long to gain the company wide support necessary to get the CEO's blessing. Then, he adds, CNT would have faced a complex implementation.
Carlson says all that was avoided with the discovery of a flexibly priced PLM solution called Innovator from a relatively unknown vendor named Aras. Peter Schroer, Aras founder and CTO, touts Innovator as an alternative to "traditional PLM software packages."
"The traditional vendors are hooked on a business model that requires users to spend a lot of money on services after they purchase the software," argues Schroer. "Our model is centered around a flexible, inexpensive software platform."
Innovator addresses a specific set of problems—project coordination, engineering change management, and ensuring product quality—that affect all companies that build products, says Schroer.
Carlson says the best thing about Innovator is the way it's priced. Fifty thousand dollars buys a package of 10 Innovator licenses that can be used by anyone in the company, as long as no more than 10 people use the system at the same time. Aras calls this the "floating license."
"We currently have 20 licenses for 100 users," says Carlson, "and I have never seen 10 licenses in use at the same time. With other systems to have 100 users, you need 100 licenses."
CNT's use of the Aras product started with a module called Design Innovator that contains best practices for managing change orders. Carlson says many of those practices reflect CNT's approach to change order management, and any modifications that were required were easy to make. He also says the engineering department handles all system maintenance.
"Self maintenance was a key goal for us," Carlson says. "We only wanted the IT department to provide servers, databases, and network permissions, and then let us manage the rest." CNT runs Aras Innovator on a Compaq server with the Windows 2000 operating system. An identical server houses a Microsoft SQLServer database that holds records related to CNT's change orders.
Carlson says CNT eventually expects to put all of its product data into a vault that comes with Innovator, and he is pleased about not having to pay more for that option. "With Innovator, when you buy a license pack, you get the complete product," he explains. "The vaulting, or sourcing, or any other module you want to use later does not cost an additional $50,000."
Carlson reasons that this approach did more than make this system purchase more affordable. "We could not have purchased a PLM system without this pricing model," he says, speaking words for all IT vendors to ponder.
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