In addition to the number of users and sessions the software will need to accommodate, pricing tends to be largely dependent on which responsibilities your company is willing to take on, and which it expects the vendor to assume, says Lois Rouder, director of training services for Round Rock, Texas-based computer manufacturer Dell. Answering this basic question is, therefore, one of the first steps to figuring out how much your department is going to need to budget for its collaboration purchase.
For example, she says you have to decide whether your company will provide the subject matter experts to lead courses, or whether that’s something the vendor will have to help with. Other nitty-gritty items to consider include whether you want to be held to an arrangement in which you must purchase a per-seat license, or whether you'd like the option of simply paying for a site-based license. "We basically tried to look at every single aspect of this down to the most minute level so we could really figure out what the right pricing strategy would be so we could provide the best value to our customers; price to our customers was an important consideration," Rouder explains.
In the end, Dell decided on an approach that relied heavily on its own resources, handling both the administrative end of its courses, such as course registration, as well as providing all necessary instructors. "We're basically just utilizing them as the medium," she says of the company's agreement with Calgary, Alberta-based collaboration tool provider Elluminate.
Another place where costs can rack up when purchasing a collaboration tool is customer support, which tends to be more costly, and even more of a necessity, than it is for LMSs, says John Clark, project manager for Redwood Shores, Calif.-based human capital management solutions provider Saba. "The collaboration software is typically real time, so there are usually higher support costs around that," he notes. Since so much of collaboration happens live, any technical glitches that occur are more pressing than they would be if the user were working with material already saved to an LMS. Immediate support, for instance, would certainly be needed if transmission of a live class suddenly failed, or if the electronic whiteboard the instructor had banked on using was unexpectedly out of commission. "One of the critical valuation criteria in this buying process is making sure the depth and quality of support is good," Clark says.
At Saba, Clark says collaboration software ranges from $25,000 to "well over" $400,000. For example, a company that wanted to standardize all its collaborative needs with the vendor for about 5,000 learners would pay about $125,000 annually for unlimited software use.
One advantage of investing solely in virtual classroom technology rather than in a total collaboration suite is your company won't necessarily have to install or purchase any software pieces in-house. Montpellier, France-based Genesys Conferencing, for instance, considers itself a service rather than a technology that must be purchased, says Tony Terranova, vice president, product marketing. "That's probably where the strength and differentiator is," he points out. "You don't need to worry about making the investment. It's more of a service-delivery model."
That means instead of paying licensing fees, the service, with its per-minute rate, is tailored so you only pay for the amount of conferencing time you need. For instance, if a company did an hour-long conference with six participants using Genesys, its charge, $90, is formulated by multiplying six participants x 60 minutes x 25 cents per minute.
Terranova is quick to point out, though, that most of Genesys’ customers aren't paying a full 25 cents due to volume discounts, which, he says, is related not to number of participants but to number of minutes used. A customer commits to a certain number of minutes a month, and if the customer exceeds that, there is a discount on additional minutes. Terranova says the average is about 400,000 to 2 million monthly minutes. He says these typical customers are most likely only paying in the "single-digit range" per minute, totaling about $30 for the session.