Here’s a reflection on pricing from Johannes Zelner, co-founder of Cloudron—I might summarize the novel ideas as:
- “one-time payments per upgrade” creates more support requests as the system continues to update
- free tiers ultimately cost money, which raises the price of the paid tier.
- donations aren’t sustainable for most projects
- monthly payments create more billing issues than yearly
Thanks for the input on the pricing. I won’t really go into the proposal as such for now, but I think it makes sense to explain where our targets are, to put such proposals and their potential impact in context. Afterall pricing discussions spark every now and then here, which is great, don’t get me wrong.
As you all might know by now, we are in this for the long run. @girish and I have built and keep building this since we want to see such a product out there in the world. This requires us to carefully work towards building a sustainable and robust organization, so it can serve more people solidly.
Since we care about the product, its usefulness and (for the lack of a better term) the ability to self-host services for various personal or business reasons, we chose to not depend on investors showing us eventually the direction whether we like it or not (I think I don’t have to point to the sandstorm story here). We rather take your feature requests as guidance, compared to metrics and analytics. That decision has some impact on the adoption strategy of course, we thus do not operate on a mode where growth and adoption at all cost is the most important metric, I also do not think pushing people aggressively from free tier to paid tier is useful. Having to make the decision to pay or not update is just not how it works for servers. On top of that, deciding to pay for 1 month, after 1 year of postponing updates and then essentially causing us to spend a day getting your old system back on track, is simply not sustainable for us (this happens :-/ one day less time getting to your app or feature request).
I can’t talk on behalf of @girish here, but to me ideally there would not be a free tier at all (no worries ). Product development and more importantly upkeep, maintenance and support needs time and dedication, this simply costs money in our society. Free tier Cloudrons, requiring help, need to be offset by subscriptions. So more free tier usage increases the price for paid subscriptions! This is just honest. We pay our salary with your subscriptions, hopefully we can extend the team this year to be able to support more apps upstream. We don’t want to push our users into something or the other, there is no grand ideology topic here either, we aim to build a great product and if you find it useful, you have to pay to keep the lights on, not someone else. Your decision. So far that strategy seems to work towards long-term sustainability, we are in a good spot by now
Since this also comes up every now and then, we also don’t want to depend on donations. This is in my view not the right compensation model in our current society. Looking at such projects, it also wouldn’t realistically work to pay our bills. We have started to donate money to other organizations developing apps like https://opencollective.com/gitea and you can look for yourself how much time you would spend helping, handholding users to ensure their data and service is not lost but up, and developing features for others from that donated amount. However that is their decision not ours to make, which is why we started to support such projects regardless. They deserve it in my opinion, I can only imagine how much time they spend on such a polished app, unfortunately not many people value it with money to buy this famous cup of coffee, to make that a viable model.
On top of all this, the pricing also just contain very pragmatic decisions. For example the mentioned monthly vs. yearly price tags. Reality is that most users have Cloudrons over a long period of time, afterall we talk about servers. With monthly payments we got a lot of churn where invoices failed for various reasons (mostly oversight or credit card expiration, temporary failure,…) those were annoying for us and users, created much useless manual work to handle and on top of all this, monthly payments amount in higher transaction and accounting fees. All this is just wasted money and energy not targeting the product and your use-cases. This is essentially the reason why the difference is so high.
To wrap up, my opinion: With more adoption, we can afford to lower prices for everyone, BUT we won’t just buy more adoption by giving more for free, as this results in pushing the cost to subscribers.