1 2 3 Previous Next 82 Replies Latest reply on May 17, 2016 7:44 AM by campsoftware

    The Increasing Cost of FileMaker Business

    david_lalonde@d-cogit.ca

      I am finding it harder and harder to understand and justify FileMaker's business model over time. This is the second year in a row that FileMaker has substantially increased the cost of doing business. It increased its licensing costs accross the board last year and tripled the cost of concurrent licensing this year.

       

      FileMaker targets three types of customers: those that develop and use custom solutions in-house; those that develop custom solutions for use by customers; those that develop solutions for resale. I mostly belong to the third type.

       

      My solutions help my customers coordinate activities with their service providers. The interface files are mostly device-specific. Why? Because every user, from my customers to their services providers, performs a narrow set of tasks and each set of tasks is best served by a specific device.

       

      There are many differences between FileMaker Pro, FileMaker Go and WebDirect. Development cost advantages fizzle if interface files target multiple platforms with the same feature set. Want to produce PDF files or import between tables? WebDirect is a pain. Want to scan barcodes? Only FileMaker Go has you covered out of the box. Want to perform a replace on the web? FileMaker Pro is a pain.

       

      I sell to businesses that coordinate with other businesses. How am I expected to count the number of users? How am I suppose to justify a cost for hundreds of users to my customers when FileMaker Go and WebDirect are limited to 100 concurrent connections?

       

      Concurrent licensing still exists of course. Only it now costs CAD$2656.23 monthly to host 100 concurrent connections. That is one third the cost of a developer's salary. Who here can afford to add three developers per ten customers?

       

      There is a solutions bundle agreement that reduces the cost for resellers. That does not change the fact my costs tripled this year. I am also required to register as a FileMaker Business Alliance (FBA) member. While FBA membership has its advantages, it also has its drawbacks.

       

      We avoid mentioning FileMaker to our clients. IT departments kill proposals that say FileMaker before any arguments abouts its merits can take place. They refuse to add FileMaker Pro or Server to their list of approved corporate applications if a department dares purchase it. FileMaker Pro is a support nightmare to install and manage for all users in a WAN environment.

       

      I find it strange that FileMaker targets resellers with a development tool yet makes decisions that substantially increase its developers' business costs. Its rationale for providing a user-centric licensing model was based on a study of its customers. I doubt that study applies to solution resellers.

        • 1. Re: The Increasing Cost of FileMaker Business
          bigtom

          Part of what I have to say is that this may be a push that the development community needs to produce better products that have even more value to clients. Getting clients to question the value of what they are getting from developers is a good thing.

           

          Unfortunately, as prices rise some customers will be lost just because they cannot afford the increase. I would argue that this group is small overall.

           

          The others will evaluate the value that FM brings vs the cost. For group 2 & 3 this is a burden of the developer to deliver the value.

           

          I would agree that FM is finding its way on licensing and they are also under a demand to increase revenue. They will figure it out. They do have an odd model of working directly with developers and users where the developers can handle a lot of the user interaction and sales advice. Of course the developer gets paid for that.

           

          I do not see any drawbacks of FBA.

          • 2. Re: The Increasing Cost of FileMaker Business
            david_lalonde@d-cogit.ca

            Cost increases are a fact of life and, yes, this pushes us to produce better and more valuable software. Cost increase is normally compared to inflation, which stands around 3% in Canada. FileMaker's cost increase is 300%.

             

            A cost increase of two magnitudes is a concern no matter how you look at it. The first question I asked myself when I learned of the price increase was: what new benefits are we or our customers getting? The answer was disappointing. My customers got a few new nifty iOS features. We got to play catch-up a tiny little bit with other development environments.

             

            Many development environments offer far more features than the FileMaker platform. It is becoming increasingly difficult to increase the value of our services at the same rate as that of our competition. We are currently winning due to better design skills, not platform feature. That will not last.

             

            There are few customers in my business but these have deep pockets. That said, my customers are in a cut-throat business. We just participated in a competition where our value proposition to the customer was sky-high. Yet, we had to slash our proposal cost by 75% just to remain competitive. Distribution costs now account for a large piece of this proposal's cost.

             

            We are competing with development houses that use royalty-free distribution models (LAMP is only one such model). While their development costs are typically higher, their distribution costs are lower. Distribution costs matter more and more with each additional customer, yet development costs change comparatively little.

             

            FileMaker resellers do not get paid to resell FileMaker software. They only get a discount on the cost of FileMaker software. FileMaker software remains a cost that is ultimately passed on to customers. Due to FileMaker's pricing model, our customers' costs increase as more users use our services.

             

            Part of FBA benefits is the association between FBA members and FileMaker. As I mentioned in my original post, this is an association we avoid when selling our services. FileMaker is still a black sheep in the IT industry. Our customers normally never know they purchase or use a FileMaker solution.

            1 of 1 people found this helpful
            • 3. Re: The Increasing Cost of FileMaker Business
              bigtom

              David W. Lalonde wrote:

               

              Our customers normally never know they purchase or use a FileMaker solution.

              I have oddly enough found this to be a better way to sell developed products. The client gets what they asked for and they do not need to dive into the details about FM at all. They care less about the platform and more about the result and cost for that result.

              1 of 1 people found this helpful
              • 4. Re: The Increasing Cost of FileMaker Business
                velistar
                FileMaker targets three types of customers: those that develop and use custom solutions in-house; those that develop custom solutions for use by customers; those that develop solutions for resale. I mostly belong to the third type.

                 

                Actually I disagree that the 3rd model is a FM priority, in fact it is something that is diminishing. Indicators are the deprecation of Runtimes, changes in EULA for banning shared hosting and also the new name "FileMaker for Teams" doesn't give a ring that its for resale.

                 

                I have decided not too long ago to focus on the first two customer groups, as a fully outsourced developer or a co-sourced developer. A couple of projects that I started on FM as products, I have scrapped and decided to do them on another platform. Personal preference to get started on a product is a web app with a solid open source stack. If the product works then a native mobile app companion would be the next step and the final step to do desktop equivalents as well, if it's such a success.

                 

                Furthermore, FM's pricing model is focused on the end user, i.e. the organisation, and the developer comes as an add-on. They are user-focused. In comparison, Xojo's model is to sell to developers thereby making them developer-focused.

                 

                Our customers normally never know they purchase or use a FileMaker solution.

                Well this is a risk when FM decides to inflate its prices. If that's the case then if you can't upgrade your solution significantly to give the customer an upgrade, how can you justify a price increase to them? If you can't do that and the customer doesn't agree to a price increase then you end up with the short end of a stick.

                2 of 2 people found this helpful
                • 5. Re: The Increasing Cost of FileMaker Business
                  david_lalonde@d-cogit.ca

                  My statement regarding the three customer types comes from FileMaker.

                   

                  Deprecation is not synonymous with abandonment. FileMaker is possibly moving towards compilation under Mac OS X and Windows similar to iOS. The rub here is that deprecation was announced without any guidance. We have no idea what or if anything will replace the runtime strategy.

                   

                  As for the new ban on shared hosting, it would have had little impact on solution resellers that relied on it if concurrent pricing were reasonable.

                   

                  We can not justify price increases to customers based on underlying technology. They care little about our costs. They compare the cost of our services with those of our competitors. They care about the value proposition. They care about affordability. And they care about the cost of moving to another service.

                   

                  We ask ourselves as developers and as a business whether FileMaker is the right tool for us at every release. The developers in us say that FileMaker is a good tool to date. Its feature set, while lacking in many respects, fulfills our current and planned needs. The business in us sings a different tune.

                   

                  The cost difference between FileMaker and its competitors, for our needs, is now pretty much nonexistent. Its value proposition diminished a lot in the last two years. Its affordability has taken a huge hit when distribution is considered. As for the cost of changing platform? We are about to start a new cycle in our SDLC and many parts of our services are slated for a rewrite. This is the least expensive time to move to another platform.

                   

                  So as a business, FileMaker may no longer be the right tool for us. This is what this whole thread is about: a complaint about pricing. I would rather FileMaker and its community know about our pain before we come to a new decision. My hope, though slim, is that FileMaker will initiate a meaningful dialogue and address this pain.

                  3 of 3 people found this helpful
                  • 6. Re: The Increasing Cost of FileMaker Business
                    velistar

                    I would rather FileMaker and its community know about our pain before we come to a new decision. My hope, though slim, is that FileMaker will initiate a meaningful dialogue and address this pain.

                     

                    I second this!

                     

                    Regarding building solutions for resale using FMP, certainly an SDK alternative is very well still a possibility. Indeed FMI should have made its plans clearer on this to developers, after all its been a whole year since the previous announcement. Furthermore, Runtime is just a developer tool and not the actual product for FMI so I cannot understand why they won't release their plans, unless their plans have to do with the product itself.

                     

                    I was just taking a look at Quickbase and their starting package is $15/user/month including the hosting. For a small team of up to 10 users the FLT cost alone sets you back $14.80/user/month and you must pay it all upfront plus the server cost. An EC2 m4.large server for example costs the equivalent for $120/month again paid upfront. IF you have a team of exactly 10users that's still $25/user/month all paid upfront. I think for 5 is something like $37.

                     

                    Certainly Quickbase and FMP are in no direct comparison but a lot of functionalities are common and one can easily substitute one for the other.

                    • 7. Re: The Increasing Cost of FileMaker Business
                      CarstenLevin

                      There are a lot of things I do not understand, one of them being:

                      While FBA membership has its advantages, it also has its drawbacks.

                      Best regards

                      Carsten

                      • 8. Re: The Increasing Cost of FileMaker Business
                        CarstenLevin
                        Due to FileMaker's pricing model, our customers' costs increase as more users use our services

                         

                        Yes, what did you expect?

                        • 9. Re: The Increasing Cost of FileMaker Business
                          david_lalonde@d-cogit.ca

                          Quickbase is simply not an option. It is way too simplistic four our needs. Its price, however, includes hosting. And that's a big deal!

                           

                          We developed some expertise regarding FileMaker on the web. It is a challenge developing and deploying efficient solutions for the web using FileMaker. Quickbase takes care of a lot of the server work for developers. No need to worry about server setups, hardware, data centres, ISPs, etc. That is all part of their price proposal. Quickbase is, from the ground up, a web platform.

                           

                          But as I said, it is way too simplistic for our needs.

                          • 10. Re: The Increasing Cost of FileMaker Business
                            david_lalonde@d-cogit.ca

                            The major drawback in being a FBA member to us is the association between FBA members and FileMaker.

                            Part of FBA benefits is the association between FBA members and FileMaker. As I mentioned in my original post, this is an association we avoid when selling our services. FileMaker is still a black sheep in the IT industry. Our customers normally never know they purchase or use a FileMaker solution.

                            Our customers do their homework before purchasing services. We need to avoid this association to ensure our ability to sell our solution.

                             

                            Let me say it this way. How often do you see companies advertise the fact they use C++, Zend, Apache, Visual Studio or X Code to build their solutions? Just about never! How much technology bias exists in the business world? Tons! They kill business deals without good cause. The potential for loss of business far outweigh the prestige of advertising our solution as built on the FileMaker platform. That is why we avoid mentioning FileMaker if at all possible.

                            1 of 1 people found this helpful
                            • 11. Re: The Increasing Cost of FileMaker Business
                              david_lalonde@d-cogit.ca

                              Carsten Levin wrote:

                               

                              Due to FileMaker's pricing model, our customers' costs increase as more users use our services

                               

                              Yes, what did you expect?

                              We expect reasonable price increases over time. A 300% distribution price increase is unreasonable, especially considering the platform's meagre new offerings.

                               

                              And what are these new offerings? Four new iOS specific features! Late compatibility for new web devices! Two horribly late development features! A self-serving update feature! Increased official direct support for third party DATABASES! Help documentation and skins that we hide anyways! A horribly late concealed edit box! And horribly late security improvements! Almost all of these features have existed in most other development platforms for years now.

                               

                              Are we expected to pay a 300% price increase for a platform that is mostly playing catch-up?

                              2 of 2 people found this helpful
                              • 12. Re: The Increasing Cost of FileMaker Business

                                Carsten Levin wrote:

                                 

                                There are a lot of things I do not understand, one of them being:

                                While FBA membership has its advantages, it also has its drawbacks.

                                Best regards

                                Carsten

                                One draw back occurs when FileMaker Sales people contact your client for upgrades. We'd sell FileMaker and make some money and save the client some money too. Since FileMaker DEMANDS our client information for their purchase, they then use that information to target our clients to sell them upgrades. We're supposed to be "Partners". That reduces value in the FBA program dramatically.

                                • 13. Re: The Increasing Cost of FileMaker Business

                                  David W. Lalonde wrote:

                                   

                                  I am finding it harder and harder to understand and justify FileMaker's business model over time. This is the second year in a row that FileMaker has substantially increased the cost of doing business. It increased its licensing costs accross the board last year and tripled the cost of concurrent licensing this year.

                                  Tim Dietrich thinks that a lot of this is due to FMI trying to move to a SaaS model: Thoughts on the FileMaker 15 Platform

                                  • 14. Re: The Increasing Cost of FileMaker Business
                                    LSNOVER

                                    I'm not convinced they are really interested in moving quickly to an SaaS model.  Honestly, the licensing and pricing side has become a mess, and the price increases, if I understand them, are way too much too fast.  Business partners can not and should not support price increases of that magnitude, and Filemaker owes it to it's customers to explain the changes.   We buy annual maintenance, so it's been less of an issue, but, I find these recent decisions perplexing.

                                     

                                    If they really were working towards an SaaS model they would be doing things to work within the Azure and EC2 environments.  I don't see anything new in that regard.

                                    1 2 3 Previous Next