This morning I read this article from The Economist, and it got me thinking about 37Signals and the software the I pay to use from them. I thought that I would look at what their per unit pricing is, to determine what it would cost to use their services on a pay per usage basis, rather than choosing between the plans that they offer.
To start I took a look at Basecamp (not this is my companies affiliate link, if you hate me Google the software then I don’t get any money), their most popular software. The three factors I looked at are: Data Storage, Projects, Time Tracking. I broke the monthly cost in half and figured out what they charged on average for 1 project, and 1 gigabyte of data, then added $2 if you use Time Tracking.
Breaks down like this:
- $0.65 per project
- $1.75 per gigabyte
- $2.00 for TIme Tracking
(I have completely ignored the free plan for this analysis, as it only allows one user.)
My company currently pays $49 / month for the Plus plan, but we don’t use it to the full potential. Here is what we currently use:
- 18 Projects
- Less than 1 gigabyte
- Time Tracking
Now we have 3 too many projects to go down to the cheaper plan, plus we would lose time tracking, so we are staying put. However based on the usage charges I calculated above, if 37Signals were to switch to a pay per use model I would only pay:
Should they switch the model? As a user I think they should, it would save me money. As a business owner, there is no way I would, unless of course they have a large amount of users in the Max plan range. Say a company (media / design / high data user) uses the following:
- 110 projects
- 100 gigabytes
- Time Tracking
As it stands they would have to pay for the Max plan at $149 / mo, however using a pay per usage model, they would end up paying $248.50 / mo. That is a huge difference. So this type of model would then benefit the low usage users substantially and lay off the financial burden on the high usage folks, or essentially replicate the U.S. Tax structure.
An interesting thought, one I am sure 37Signals has thought about. As a user it would be far more appealing to me to have a pay per usage account, as I would not have to worry about upping the plan, or lowering it. In fact it would make it far cheaper to start using as well, because if we didn’t end up using the service, then we would not have to pay much at all (I would recommend that 37Signals have a minimum charge.