This is a very informal, off-the-cuff survey of some web applications in the Rails ecosystem that have varying payment plans, how they present them, and some of the differences among them. The idea is not to compare the services, but to start to get a handle on how to price services on the web.
I’m working on launching a small, very niche Rails-based web application in the near future, and am looking to charge a small amount per-month for it. Mostly as a way to make ends meet while I’m unemployed, but also because I’d like to provide a few extra features to those users who already donate to the free JBidwatcher application, and because the web application uses S3 and I have to defray those costs. While I’m very grateful my users are contributing because JBidwatcher itself is useful to them, I’d like to offer a ‘premium’ value both for folks who have already donated, and for people who don’t feel comfortable just sending money, and want to see something extra for it.
This led me to be curious about pricing. I pay for several web applications already, and expect that eventually I’ll have to pay for more if Google starts actually asking for money. I decided to dig into the applications that are out there, and see what kind of pricing models I should be looking at.
From my informal survey, a lot of the subscription plan models used by Rails-oriented companies naturally grew out of 37signals and their fanatic devotion to the concept that web applications should be good enough to charge for, and should be charged for.
The products I’ve looked at for this are Lighthouse, Tender, GitHub, Highrise, Basecamp, Campfire, NewRelic RPM, CrazyEgg, Hoptoad, Thunder Thimble, and Pingdom. I’m sure there are many others out there, but those are the ones I deal with on a semi-regular basis. I have paid accounts with GitHub and Pingdom, and have used (at other companies) paid accounts on Hoptoad and NewRelic RPM.
One specific attribute of all of these applications is that they have varying levels of paid accounts, not just a free/paid[/lifetime] like many other services (LiveJournal, Flickr, LibraryThing, to pick a few that I personally use). I like the spectrum approach as it gives users a choice as to how much services they’ll need, and what the amount they’re willing to pay for it is.
Raw Pricing Plans
First I want to present the ‘raw data’, a link to the plans and a brief table with the plan names and the monthly cost. Then I’ll point out a few things I found interesting about the data.
|* and a free plan|
Free trial is 30 days only.
|* and a free plan|
|* and a free plan|
|* and a free plan|
*Free trial is 30 days only
|* and a free plan|
So what’s interesting here?
Lighthouse, Tender, GitHub, Highrise, Basecamp and Campfire all differentiate on disk space used.
Lighthouse, Tender, GitHub, Highrise, Campfire, Hoptoad and Thunder Thimble all have some variation on the concept of ‘user’ that you can pay more for more of.
In everything except NewRelic and to a lesser extent Hoptoad, all the capabilities of each application are available to all user levels, just at varying quantities. Feature distinction only exists in those two applications. In Hoptoads case, the distinction is between free/non-free; if you’re paying, you get all the services. This leaves NewRelic as the only one that deeply distinguishes between features available to different paid levels.
GitHub, Highrise, Campfire, and Hoptoad all have SSL support as an ‘add-on’ feature; it’s not part of the free accounts, and in some cases it’s not part of the basic level paid accounts either.
When I signed up for Pingdom, they sent me a ‘70% off the first year’ invitation, which reduced the price to roughly $3/mo. for all the basic plan amenities; presumably under the theory that they will be able to re-subscribe me in a year at full price.
NewRelic is running a 20% off discount currently, which lasts as long as you have a paid account.
Pricing Plan Layout
Historically I seem to recall most of these sites had the table style of comparison chart (still used by NewRelic, Hoptoad, Thunder Thimble, and CrazyEgg), but most have converted to the ‘box’ style of comparisons. GitHub still has the table when you view the plan chart from your account settings, but other than that Lighthouse, Tender, GitHub, all the 37signals products, and Pingdom are using separate boxes for each plan level.
The 37signals products and Pingdom use an outsized box to emphasize one of the plans, presumably to drive signups to that plan. CrazyEgg does the same thing within their table style, also.
I kept the order the various products displayed their prices, and it’s noteworthy that all the 37signals products, CrazyEgg and Lighthouse start with the larger plans on the left, and go down from there.
It’s also interesting that all the ones marked as ‘and a free plan’ de-emphasize the free plan by putting it in small text under the large table of paid options. Two of them, Tender and Thunder Thimble offer a 30 day free trial, but no ongoing free plan.
GitHub and NewRelic are the only ones whose plan details go below the fold. GitHub’s plan upgrade doesn’t, but their new sign-up plan list does.
So for the applications which differentiate on disk usage, how much does $50/mo. get you?
This pattern is roughly the same for the $24 price point for all of them. 500MB for Lighthouse and Tender, 2.4GB for GitHub, and 3GB for the 37signals products. This suggests that limiting on disk usage ranges from 20MB-200MB per dollar per month, a pretty wide range. Estimating based on S3 costs suggests a per dollar per month storage amount of around 2.3GB, but that relies on one upload, one download, and ongoing storage. If your usage is asymmetric, or storage is temporary, the S3 based cost can vary a lot.
For the applications which vary pricing based on users, how much does around $24/mo. get you (I chose this number since Hoptoad doesn’t have a $50 price point)?
I believe this is a wide range mainly because per-user data is usually relatively light, and so it has more to do with how complex the application’s interaction between users is, rather than a real per-user cost. Still, some numbers do come out of this. The cost/user ranges from $0.78 to $4. At the $50 price point, the cost/user for qualifying apps is $0.82 to $3.27.
I don’t pretend to know pricing, or sales, but I like to believe that in aggregate the people putting these sites together do. I see a pretty good argument here for feature parity among price points, but finding quantities that can vary between prices. There is a clear value to users and disk space used, so those are early things to look at when pricing an application. SSL support is a common feature of paid plans, and not of free plans.
There’s a definite movement towards boxed plan details, over tabular feature comparisons. Ongoing free plans still exist in the majority of applications, but are de-emphasized in most, guiding users towards the paid plans. Overall, the plans are simple, only falling below the fold in two cases, and relatively easily consumable in all.
The lowest payment point plans are $5-40, with a bare majority falling in the $5-12 range, and all the rest but NewRelic falling in the $19-$25 range.
I hope this has been an interesting and potentially useful survey of a few pricing plans for applications generally in the Rails ecosystem. Any mistakes are mine, and I’d very much like to hear about them so I can fix them. Other data points are welcome, and points I might have missed that would be valuable to folks thinking about pricing are welcome, and even encouraged!
I did this for my own edification, but I’d also very much like to know if others find it interesting!
Best of luck, and may figuring out pricing not be as much of a pain for you as it is for me!
— Morgan Schweers, CyberFOX!