'Pricing strategy of vendors should not leave partners to fend for themselves.'

A graduate in statistics, Satyen Parikh has over 19 years of experience in

the IT industry and has been associated with Onward Novell since its inception.

He won the employee of the year award in 1994, just two years after joining the

company. This award was given for his role in pushing up Novell’s revenues by

300 percent. In his current position as area director for the Indian

sub-continent, he manages sales, marketing, education, systems engineering,

software manufacturing and commercial operations. He tells DQCI how he plans to

enhance partners’ business with competitive pricing.

Novell had recently announced the Bridge promotion. Can

you give us more details on this? Has it been devised only for India?



What we have done for Netware 6 is that we have run multiple

levels of boot camps and training programs for our partners and customers. The

response has been very encouraging. With the hands-on experience that our

Certified Novell Engineers and resellers received at these camps, they have

found out key value propositions that they can go to market with. We also have a

beta program in which we have enrolled quite a few Indian organizations.

Looking at the specific price sensitivity of the Indian

market, Novell also decided to run a very aggressive Bridge promotion campaign,

which has enjoyed good response. This promotion allows all our existing

customers of Novell or even NT to upgrade to Netware 5.1. And what they would

get is an absolute one-year upgrade protection free of cost.

This promotion was held worldwide, but we have tinkered it to

make it more aggressive to the Indian market.

How is that?



Worldwide, customers have to pay 20-25 percent premium to get

the upgrade protection. In India we have made it free of cost.

What is the price of Netware 6?



For the five-user version, Netware 6 costs $995. And for

every incremental set of five-users it is $184. The SME product bundle is priced

at $1275 which we have equated to approximately Rs 61,000. This bundle is a

five-user pack to begin with and it can go upto a maximum of fifty users, in

incremental steps of single-user or five-user. The incremental price for a

single user is $79.

Software vendors often come up with special pricing

strategies solely for the Indian market. So besides the Bridge promotion, does

Novell have any plans to introduce a low-priced product offering to the Indian

customers?

We continuously have these plans. The Bridge promotion itself

is an example of a unique pricing strategy. We recognize the sensitivity of the

Indian market and devise special pricing schemes for this region.

Can you elaborate on this?



Novell India has devised something called factored pricing

strategy. You may not necessarily equate the dollar price list into a straight

rupee-to-dollar conversion. We prefer to take a more realistic approach. What we

do is that we do not look at the daily prevalent prices of the dollar, but

instead would multiply the dollar with a predetermined base value of the rupee

and then price the product. That has been our policy from day one.

So let us assume that the factor pricing is Rs 42 and our

product is priced at $1000. This means that the product will be available to the

customers at Rs 42,000, despite the rupee-dollar value existing on that very

day. The dollar value for that day could be Rs 48, which means that the product

should have been sold at Rs 48,000. But we do not do this and the customer is

happy because there is no variation in prices from the Novell product he has

bought today and the one he plans to buy after a month.

So what will be the base factor price in rupee terms?



That has not been worked out yet. But it will generally be

between Rs 42 to Rs 48. This price will stay in place till the introduction of a

new product or till we find that the difference of the factor price and the

actual rupee-to-dollar conversion has grown too large.

How has this pricing strategy helped your customers and

channel partners in India?



Factored pricing has been our Indian strategy from day one.

This is also why a lot of our customers have found Novell’s pricing

competitive when compared to other products in the same genre.

We believe that pricing strategy should not leave partners to

fend for themselves on ridiculously low margins. Instead we should strengthen

them not only by providing them a robust infrastructure but also ensure that

they get a reasonable satisfying margin to go and sell your solutions.

How much has the factor pricing impacted the revenues of

Onward Novell?



I think the factor pricing has not impacted our revenues. You

have to relate it to the market itself. You have to be sensitive to what the

market wants and how you need to drive the market. And that was why we came up

with special models and factor price for the Indian market.

What happened to Novell’s plans to strengthen its online

storage business?



On this front, we had acquired a company called Systar. After

the acquisition, we have come out with a product, iFolder. The difference

between what other online storage companies were delivering and what we provide

is the eDirectory service. Based on this directory, you can deliver many more

value services because you know the identity of the individual who needs to

store real-time information.

So are you going to spin it off as a new business

altogether?



No, it is an integral part of our Net service software suite.

How does Novell intend to strengthen its varied

distribution channels by launching the new JumpStart solution practice in

collaboration with Cambridge Technology Partners?



Novell is essentially looking at the market needs ahead, and

the needs of customers of transforming their IT investments to leverage the

network. And it is for this reason we have introduced Jumpstart solutions. One

of them was recently announced which is e-provisioning. The components of this

employee positioning product facilitate a zero-day start and zero-day stop to

the employer. Which means that employees will be part of the network from the

day they join till the day they leave, not a day before or after that period.

Has the One Net vision worked well for Novell?



One Net vision envisages a world where you have wired and

unwired worlds or Intranet, Internet, VPNs and corporate sites. All these need

to be tied up together intricately. At the same time the user of each of these

IT infrastructures need to have access to the data on the system simply and

securely. We at Novell will deliver our Net service suite of software to realize

the One Net vision.

VINITA SUVARNA-BHATIA in Mumbai