Odoo: The New Pricing Q3 2014

in Odoo News

Fabien Pinckaers (fp)

A price aligned with the customer value


The New Pricing

Starting July 1st 2014, we will change the price of our Odoo Enterprise (formerly OpenERP Enterprise) services. The current price is $39 per user and per month for all applications (or 35€ according to regions).

The new price will be:

  • Free for companies having 1 or 2 users on the cloud (with unlimited usage)
  • $15 per user and per application bundle (or 12€ in some regions)

One application bundle includes several modules. As an example, if a customer uses the CRM application (leads, opportunities, agenda), the Sales application (quotations, sales orders, proposal designer) and Websites application (website builder, eCommerce) will pay $30/24€ per user and per month. (it's 2 application bundles: 1/ Sales & CRM and 2/ Website).

You can get more information on our pricing page.

The rationale behind this change

Designing a new pricing is a tricky move because it has positive impacts on some customers and negative impacts on other ones. We had two objectives when designing the new pricing: a free plan and a price that is aligned with the value the customer gets from the Odoo usage.

A free plan

Odoo's cloud offer is free for companies having less than 2 users. We think this free plan will boost adoption of Odoo for different reasons:
  • Companies can test Odoo for free without other limits than the 2 users one. They can benefit from the cloud offer during their evaluation period. (no more 15 days free trials)
  • With the old pricing a lot of very small companies installed Odoo on premise just to avoid paying $39 per month. But their experience with Odoo was not always good as they struggled having a clean production environment: installation, configuration, upgrades, backups,... The new pricing allows them to use our cloud offer for free and benefit from a great user experience out-of-the-box.
  • The new CMS and eCommerce apps are so great that they will bring a lot of users on board. We wanted these apps to be free so that they will boost Odoo's adoption. As most companies need only one or 2 system administrators to manage their website, these offers are mostly free.

A price aligned with the usage

The new pricing is in line with the value a customer get from the product. If a customer uses only one application (e.g. CRM or Website Builder), he pays for only one application (12€ / $15). If a customer uses 4 different application bundles (Website, Sales & CRM, Inventory, Accounting) he will pay 48€ or $60.

This new pricing supports the "quick start" approach launched in 2013. Customers can start small, with only one or two applications, and extend later. With the new pricing, the barrier to the entry is lower for new customers. After several months, if the customer wants to deploy more applications, his price will increase according to his usage.

We think this will not be an issue for customers as the value they receive from having more Odoo's integrated business apps is so high that they will easily afford paying more (and all software vendors in the world do that!).

The price is also aligned with our costs, which is sane. The more applications a customer use, the more support, bugfix or migration effort we will have to provide.

What's the impact on the customer base?

The free plan

The following graph shows the number of databases that are in production on OpenERP version 7 (left axis) and their number of users (right axis).

29.51% of the companies running OpenERP version 7 have less than 3 users. So, nearly 30% of the companies running Odoo can benefit from the free plan. In terms of users, these instances represent only 2% of the install base which means that it's not a big loss of revenues for our partners.

The price per application

For customers having more than 2 users, the price change will have the following impact:

  • customers running one or two application will pay less (60% or 30% less)
  • customers running three applications will pay more or less the same price
  • customers running more than 3 applications will pay more (up to 2x more)

On average, we expect that the price for the whole install base will increase by 15%  (some customers will decrease, others will increase much more). But even if some customers will see their price largely increased, Odoo's price is still super inexpensive.

The following graph compares the price of several enterprise management software according to their number of applications. The blue line is Odoo's new pricing.

Check the table bellow for detailed price per vendor.

Even with a very high usage (4 to 7 apps), Odoo is still much cheaper than every other competitor in the market. Between 2x and 3x cheaper than every other software vendor!

It is incredible: the best software with the cheapest price. Not 30% cheaper, 2 or 3 times cheaper. This is due to our open source business model.

On the left side of the chart (one application), Odoo is also the cheapest on the market compared to single application vendors, whatever the application!

What's the impact for partners?

Partners will have to adapt their sales pitch to the new pricing, for the better. Instead of selling everything for $39, they will have to quote per application (for Odoo services, but we think they should also package their own services similarly).

With the old pricing, some partners used to over-sell OpenERP. They proposed too much apps whereas the customer only needed a few ones. (because the price was the same) This resulted in higher implementation costs. We think it's better to start with quick wins and lower risks by deploying a few apps to start with. The new pricing allows such an approach.

The barrier to the entry is lower; this should help partners become even more competitive on the market.

If partners satisfy their customers, those customers will want more and more applications. Partners have now the ability to upsell per application. We think it's a very sane business relationship for both sides (customers and partners).

Partners still benefit from super high discounts on top of the public price. This lets room for negotiation on big projects. If you compare this with other software vendors, Odoo is 6x cheaper than the average!

More information?

Check our pricing page and the FAQ in this same page.

(*) Competitor Prices References

Product​ Price
​Openbravo On Demand ​39 EUR / user / month
​Sage 100 ​149 EUR / user / month
​Salesforce Enterprise $125 / user / month
Divalto Premium 90€ / user / month
Quickbooks Online $26 / user / month
Xtuple Enterprise $125 / user / month
​Zoho CRM $125 / user / month
​Salesforce Professional ​$65 / user / month
Magento Commerce $65 / user / month