July 10, 2001 1:55 PM PDT
Red Hat rival shifts pricing plan
The Norfolk, Va., company released a new version of its software Monday based on version 7.1 of the PostgreSQL database software, including a $495 package that offers bare-bones support. That price is a lot lower than the $8,750 charged for the next least expensive package, which includes much more comprehensive support.
The new pricing comes shortly after Red Hat, the top seller of the Linux operating system and a powerhouse in the world of open-source software, announced its own entry into the database market. Red Hat approached Great Bridge as a potential business partner, but Great Bridge didn't like the terms of the deal, and now the two companies are competitors.
The pricing change is a dramatic shift for Great Bridge, a subsidiary of Landmark Communications. Previously, the company had emphasized support packages costing thousands of dollars per year while suggesting that free, downloadable versions of the company's software--sans support--would suffice for those wanting to simply get their feet wet.
While the free downloads are still available, the $495 package offers some basic help in installing and configuring the software, said Dave Mele, vice president of marketing at Great Bridge.
But Mele said the company isn't moving toward a revenue strategy emphasizing sales of boxed software rather than services. Rather, the company is hoping to provide a new way for customers to establish a business relationship with Great Bridge.
The company expects 60 percent to 75 percent of customers who start out with the $495 package to upgrade to more expensive support plans, he said.
The $495 version is for those "who are not ready to spend 10 grand until they could prove the concept, or at least get it up and running," Mele said.
Red Hat's entry into the database market, also based on the PostgreSQL software, has helped Great Bridge, Mele said, legitimizing the database, increasing the number of sales calls to Great Bridge and upping the number of downloads.
Great Bridge has also changed the pricing for its top level of support, which offers help 24 hours a day, seven days a week. This option formerly cost about $50,000 a year, but now Great Bridge will charge $12,500 for 50-hour blocks of support, Mele said.
Great Bridge made the change to attract high-end customers with potential savings.
The bulk of the company's revenue, though, comes from consulting work, during which Great Bridge helps customers install and configure the software on their computer systems. "The first engagement with Great Bridge is typically consulting, not a support package," Mele said.
Red Hat also offers consulting services for its database product.