Channel unhappy over Sybase pricing policy

NEW DELHI
 

JUNE 30, 2006

At a time when
Indian market is booming with IT activity, Sybase - a global provider of
database technology for enterprises is 'overcharging' its set of Indian
customers by over 30 percent when compared to its global price list on its
website.

According to the
company's website, the price of one of its most popular products - Powerbuilder
enterprise edition is Rs 1,37,000 charged globally. Interestingly, the same
product is available through its distributor Redington India at around Rs
1,80,000 within the Indian region. The price difference comes to be around 30
percent.

When contacted
the company management claimed that different pricing is applied not only India
but also in countries like China and Japan. "We have different pricing
policies for different geographies. In China and Japan where there is a price
difference of 80 percent and 90 percent respectively," informed Kumar Mitra
Head (Channels), Sybase India.

When asked to
explain the reason for this disparity, Mitra said, "It is because of the
certain level of localization and tax policies by the Indian government that we
have to put a higher pricing for Indian customers."

On the other
hand, it is ironic to note that other software-focused companies like Oracle or
Microsoft have been operating in the country as well, however their pricing
policies do not change with geographies. "Well, I cannot comment on what
Microsoft or Oracle is doing. But we have this policy and will continue to work
like this within India," he added.

After having
forced to sell Sybase products at a higher price, the channel community is
feeling cheated by the company. "This is not good for the overall industry.
The fact is we are forced to cheat our end-customers by overcharging them,"
adds a big software reseller from New Delhi on conditions of anonymity.

An interesting
thing to note is that Sybase had further increased its pricing from 1st January
2006, when it was selling its products through distribution focused company -
Redington. "We review our pricing policy regularly and we have increased
the pricing for India by 30 percent after January review. Earlier it was 10
percent. In fact, we have seen an increase in the number of customers for the
company after this increase," Mitra informs.

Moving beyond the
issue of increased price points, according to Redington India Sybase is loosing
its existing customer base which they have gained in the past due to lack of
support and technical expertise in the market. "I don't think that pricing
is a big issue. There are times when we sell our products at a discount.
Customers do want discounts, so we give them these discounts on the list price.
However, there are certain areas like service and support where the company
needs to work a lot," added a source from Redington on conditions of
anonymity.

On the other
hand, resellers opine that Sybase can further increase its marketshare only if
the company reviews its pricing policy and treats its Indian customers at part
with the global customers.

"All the big
software focused multinational companies have grown only because of its
end-customers. So ideally, pricing, which is such a critical issue should be
decided keeping in mind the interest of the end-customers," added another
software reseller based in Hyderabad on conditions of anonymity.