Lawson: I had heard 50 cents, but it’s 40?
Van den Bergh: It’s 53 cents, including the Amazon server charges. The 40 cents is for our software and 13 cents is for the server, the hardware that it runs on.
Lawson: And so you're basically getting a BI tool for that.
Van den Bergh: Yeah, you're getting a full BI server. So you can create reports, you can create dashboards. You can do in-memory analysis starting at 40 cents an hour.
Lawson: What does that work out to if you're running it for, say, six months or a year?
Van den Bergh: Well, if you were running that 24/7, 365 days in a year, that works out to about $3700, or in that ballpark, a year, right. So no matter how you cut it, it’s incredibly cheap for a full BI server. Again, we don’t tell you how many users you can put on it or what type of volume you can access.
The main point is the flexibility of the utility pricing, which is that I can turn this on and off as I want, and particularly in business development or in test mode, that’s what developers like to do. When it’s in production, of course you're going to want to have it on 24/7.
But if you're doing development, if you’ve got a specific work load that you just want to turn something on and turn it off again, or a project — there are lots of use cases where this type of model fits much better than buying licenses up front. It gives ultimate flexibility.
In our 350,000-member community, a big part of them are developers building applications. And so we understand that the hardest thing about BI — there are lots of things that are hard about BI — but if you're embedding another application, you’ve really got four barriers that you're having to address: You’ve got the cost barrier, you’ve got the complexity of deployment, you’ve got the complexity of use and then the complexity of integration.
When I’m building an application, I’m not going to know necessarily when or if my application is going to be successful, how many users I’m going to have. There’s going to be a mode in which I’m certainly developing and I don’t want to have to buy large license fees up front. And even our model, which is very cost-effective when compared to a traditional BI player, our annual subscription ends up being about 20 percent the cost of a traditional software deployment, the perpetual license deployment from the traditional BI vendors. But even that still is expensive. If you're talking about 20K a year, it’s still a lot for a developer who doesn’t really know where the application is going to go.
So this model removes that first layer of cost, because I can start really at 40 cents and can see where this goes.
I think the biggest proof point that this model is successful is that in the two months since we’ve launched the commercial edition, we’ve had over 200 customers purchase the product, which for a BI server is a very fast adoption rate. And these are, in some cases, large, brand-name customers. In other cases, they're the latest start up.
Lawson: And what are they using it for, beyond development? Do you have any insight into specific examples of how they use it?
Van den Bergh: The use cases are as varied as the company. The data we have is limited to those we’ve been in contact with, because the beauty of this model, from a customer perspective, is that this is all automatic.
They’re on Amazon’s cloud and they push a button and they launch our server and then if they want support, we have free online support. We’ve done all the technology integration, so they press a button, it’s launched, and then it automatically picks up their Amazon AWS data sources. It can connect to other data sources, but we’ve really tuned it to work well with Amazon data sources like Redshift. And so in literally under 10 minutes, you can be analyzing your data.
The problem with that model is that they don’t come and talk to us. We appear simply as a line item on their Amazon bill. So if they sign up for our support, we get their contact information and we try to connect with them to see what their experience is. So we get to know about a quarter of those that purchase our product, and from the ones that we’ve spoken to, some of them are using this as a way to just try out our software before they go into production. The use cases sometimes are internal reporting. So it’s not exclusively embedded.
One of the first customers that we have that’s publicly recognizable is Click Travel, an online company that does expense and travel management, and they are using us for internal reporting on their customers and on their finances. It’s really just to run their business.
There’s another company using us to analyze log files from their website. So large volumes of data and they're using us in conjunction with Redshift. I can’t disclose that customer’s name.
Lawson: Why that particular price point? It seems low. How is that possible?
Van den Bergh: Well, honestly, in the world of Amazon web services, it’s not that cheap. So it’s all relative, but of course, as you get higher up in the stack, things can be more expensive, because as I said, the server that it runs on at 40 cents an hour costs you 13 cents an hour. That price point was something that we did a lot of work on to derive a price point.
Our goal was to get as low as possible in a way that was defensible from our internal perspective, because, as you can imagine, one of our concerns was cannibalization of our current subscription offering.
What we did is we pulled the phone-based support, and we made that a separate offering. So we have free online support, which is our community forums where there’s advanced documentation, there are online video tutorials that will teach you how to use the product, but these are all automated services. If you need to talk to somebody, then we will provide you a separate subscription, annual subscription or a monthly subscription, $1500 a month or $7000 a year to get access to phone support. That’s consistent with the Amazon model.