Seperate Hobby vs Business pricing models?

Connectivity BLE // NFC
1

I’d like to discuss an idea around hobby pricing. Perhaps this should be a reply on the discussion around new pricing, but it seems different enough.

First I should say that I love what Particle is doing. The fact that everything is open is really refreshing, and a key factor to why I bought in. I also understand Particle has bills to pay, and that anything I say here could be a horrible idea from a business perspective.

My concern is that the new pricing model reduces the appeal of the products from a hobby perspective, and I think the hobby market is key to your business as what people try at home they are more likely to recommend at work.

I’ll start with my proposed solution: Separate out hobby and business accounts. As your blog post suggested even a tiny network on the business side could be generating thousands of dollars of value, and you want to try to capture that. Businesses making a profit are typically more willing to pay for value. The current pricing model as-is could actually be too generous for business use.

On the flip side though the hobby usage could contain a great number of sensors, but generate very little value, at least in the more tangible sense. Hobby users are also a lot more price sensitive.

How do you differentiate those two account types? Besides ‘not for commercial use’ website banners you could provide different levels of service. Business usage could have different allowed TTL times on published messages. It could provide archiving of all messages for audit purposes. It could provide an SLA. It could provide better rate-limits. Hobby could have a daily/weekly/monthly message limit. There’s probably a dozen other ways (just please do not one of them to make business messages ‘more secure’).

So now, what’s wrong with the current pricing model from the hobby perspective? For starters it encourages me to buy less of your hardware. If I’m limited to 10 mesh nodes them I’m going to treat them as the backbone of my home IoT network. The problem with that is that when I want to detect if water is leaking under my washing machine I’m going to be thinking “maybe I can find something bluetooth to talk to the existing xenon”, or “maybe I can run a few wires over to there”. This means I don’t buy a new xenon, and my overall network is less fault-tolerant than it otherwise would have been. It also likely doesn’t reduce your operating costs either, as the same number of messages will be sent.

My second issue with it is the proposed HA network costs. It suspect it will be pretty common in the hobby/maker market to want a backup gateway, and asking people to pay $120/year for something rarely used is asking a lot. Even the increased cost of this over the Electron seems like too much (for a hobby user, for a business it’s likely peanuts). For example my aging parents travel a lot and would like a way to monitor their home temperature while they are away. Using the 3rd-gen hardware it would be easy to monitor each level and also monitor for water in the basement. The extra $7/month to do this vs a Electron doesn’t seem worth it though, so now I’m considering a serial connection between an Argon and an Electron to have it act as a backup, or just an Electron on the main level.

As I said, maybe none of this makes sense, and mostly I can work around issues anyway, even if I have to set up my own backend. I’m posting this because I want Particle to succeed and I hope this helps.

7 Likes
2

I am also a little disappointed in the announced pricing structure. Fortunately for me, I was a pre-order customer, so I get a little bit of a break. But even so, I find the pricing plans a little confusing and a bit harsh on the low end.

Now, I’m not expecting Particle to change anything, at least not any time soon. But I do hope that they’ll remain open to the idea of revamping the pricing after they’ve had a chance to evaluate customer feedback and actual usage patterns.

If it was me deciding things, I would have preferred a pricing structure that was primarily based on Cloud usage, with secondary limits based on total number of devices in a Mesh and the number of active gateways. Maybe even throw in some rate-limit changes between the “free” and “business” (and “enterprise”?) tiers.

“Reasonable” to me would look more like:

Free Tier:

First five Mesh networks free. Each network can have up to two Gateway devices, and each Gateway can support 10-nodes (in other words, up to 20 total nodes in a mesh if you use two Gateways).

A-la-cart Networks: Add additional mesh networks to your account, with the same limits as above for $X/month per mesh. Where X is something reasonable like $3-ish, and maybe a yearly pre-pay plan for $30/year. Up to a maximum of 10 networks (5 free, 5 a-la-cart).

A-la-cart Gateways: Add additional 10 nodes w/Gateway to an existing mesh for $X/month (again, probably something like $3/month), maximum 4 Gateways (40 nodes).

So, with the free + a-la-cart options, you could max out with 10 networks, each with 40 nodes, for somewhere around $75/month

Coincidentally, this also puts a 3-Gateway / 30 node network at around $30, which is the same as the announced pricing. That was totally accidental, I didn’t realize it until after I had written the above, then went back to look at the pricing page.

Business Tier: $XX/month ($50?)

First 15 networks included in subscription. Each network can contain up to 5 Gateways, each supporting up to 25 nodes, inclusive (i.e., one network could be up to 125 nodes, with 5 of those being gateways)

Al-la-cart options for networks and additional nodes/network similar to above, with pricing scaled in some appropriate way, and some reasonable maximum number of networks and devices/mesh.

Enterprise: $XXX/month
Again, something like the above, scaled to appropriately huge levels.

This would, of course, be independent of Cellular data plans, as it is now.

I think I’d also consider setting limits on Cloud requests (both total number of requests and the requests/sec rate), based on subscription Tiers. This would have to be handled carefully, in order to avoid disorienting the existing user base. A nice long grandfather grace-period would be a good start, maybe scaled according to how long they’ve been customers (if you participated in the Spark Core Kickstarter, you get the longest grace period. If you became a customer after the Photon was introduced, a slightly shorter grace. Electron, etc.)

I’m not sure what form those limits might take, mainly because I have no idea what kind of data usage other users and product creators are generating. But they should probably be as generous as possible, while letting the bulk of the Cloud maintenance costs be covered by business/enterprise level subscriptions. Perhaps business/enterprise accounts would get per-device publish rates of more than 1/sec? Perhaps free tier accounts would be limited on the maximum number of publishes per month (that could get tricky, understandably)?

Of course, this is all just my blue-sky, off-the-cuff thinking. My main motivation here would be to give a free tier that is more useful to “power user” hobbyists, prospective product creators, educators, maker spaces, etc., with the flexibility to grow their capabilities incrementally in the manner that best fits their needs (more/bigger meshes), without having to spend more than they want for capabilities they might not need: one user might only need a couple of networks, but with many devices, while another might need more networks, but doesn’t need as many devices per network.

Just my $0.02. And I don’t want anyone at Particle to really take this as bashing or griping. I know that introducing the initial pricing structure must have been something that’s caused them a lot of hand-wringing and hair-pulling.

4 Likes
3

One problem is the Enterprise Market likely doesn't have the largest impact on Particle's Profit Potential. I'm guessing we will be waiting a decent amount of time before Gen3 Mesh is "Enterprise Ready".

I would expect the Mesh Pricing Model to change as necessary to maximize Profits, in response to the Market & Cloud Service Sales. I have no idea if that trend will cause Particle to shift the burden towards Hobbyists, but my guess is the current model won't capture a significant Business/Enterprise sector without a decent reduction. It's hard to justify the aggressive pricing model for Mesh Service as it stands currently, I can't imagine an increase for a potential Business/Enterprise Case.

I don't disagree with any of the comments in this Thread, just sharing potential thoughts from the business side. I haven't noticed many comments about the Mesh Pricing from the "Business" Side of the fence.
The idea that simply increasing the burden to the "Business/Enterprise" might not be justified, and could have negative results on Particle's Bottom Line.

In the long run, the consumers (both Hobbyists and Businesses) will decide. We vote with our purchases ( or lack thereof).

3 Likes
4

Thanks @dougal & @Rftop for the feedback,

I agree on the cloud part. I think people are fairly reasonable about paying for what they use. That's why I'd be more okay with paying for more messages. I'm not entirely on-board on the 'node' limits though, and I'm not a fan of paying extra for the sump pump alarm node that will once a day report that it's alive.

I'm not sure I entirely understand this. Why limit nodes-per-gateway? As far as I understand it I'll want all my nodes talking through the wifi gateway while that's up, and only falling back to cellular if needed. I'm not sure why adding a second wifi gateway should allow me more nodes, but perhaps I'm not understanding you correctly.

Also from a Particle-costs perspective me running 5 networks of 20 nodes likely costs more than me running 1 network of 100 nodes. The distinction seems just to be a crude attempt at distinguishing the type of usage. I could, for example, create a 'home-hvac' network separate than the 'home-security' network. Each would have to main a connection to Particle, and each network would be less robust than a combined 'home' network.

Exactly, mine as well. I understand Particle has to do what it has to do to stay in business, and I know how hard it can be to target the business and enterprise customers. I'm happy as long as it stays open. That way if I have to I can flash a custom firmware and use my own cloud hosting.

4 Likes
5

No practical reason. But to a certain extent, it matches up with how Particle is currently pricing based on number of networks & nodes. And it also links High Availability to bigger networks, which makes a certain sense. Sure, there will be lots of cases where HA is important even though the number of nodes is small, or maybe vice versa. But this model doesn't hurt either of those cases.

Also, I agree that the most... irksome thing about the Mesh pricing is maybe the idea that Particle should have their fingers in our local mesh network at all, if we are not using the Cloud, or if our Cloud usage is low. If my network mainly uses local mesh pubsub, and my only Cloud communication was a Particle.[publish | function | variable] status check a couple of times a day, why should I have to pay differently whether I have 5 nodes or 500? The main justification I can think of is that the mesh network setup and tracking which devices belong to which network are managed in Particle's servers. But that's probably somewhat of a circular argument, since that could all be handled locally in device firmware.

I'm sure that development of the new 3rd gen boards has been a huge financial investment for Particle, in terms of R&D, engineering, tooling, development time for updating the firmware, etc. And I bet that their ongoing costs for maintaining the Particle Cloud is probably bigger than most of us realize. So, I do understand that they need ways to recoup those costs. I just wish that it wasn't hitting the hobbyist user end quite so hard, especially those of us who are hardly using the Particle Cloud at all.

4 Likes
6

I have only started with particle devices a bit more than a week ago and I’m hitting the business model issues. I’m a hobbyist, so I assume that I’m of limited commercial interest to particle. My value to them lies mostly in supporting the community: creating buzz, examples, bug reports, fixes, libraries, answering questions, etc. But right now I would say that I feel turned away by the limitations that particle places on the use-cases and that are due to their pricing structure.

What I’m really looking for is freedom to operate the mesh network I want and to provide the internet connectivity I choose. But I’m limited in the size of the mesh I can deploy, the meshes I can connect to, and the number of gateways per mesh.

Three examples:

  • While I develop an app for a boron I can’t use it in mesh-only mode, connected to the internet using an argon which provides free connectivity. Instead I have to use cellular (which not only costs but is also lousy inside my home). This use-case is not supported (but may be sometime soon?)
  • My first app is a mobile device using a Boron and I’d like it to be connected via cellular while on the road but locally via mesh when at home so I have much faster and free connectivity for downloading data collected while in the road. (I.e. like what your cell phone does). This use-case does not really seem to be on the roadmap and if it is implemented will require HA gateways, which looks like it will be price-prohibitive for hobbyists.
  • To deploy sensors in my house and around my property I do not see how a single argon for connectivity will do the trick. I don’t like the single point of failure and given my experience with other RF technologies that run at much higher power than BLE I don’t see a single GW reaching far enough (yes, I know about mesh hops, but there’s a point where that becomes a nightmare too).

Overall I care little about the particle cloud functionality. I develop locally because it’s faster. I don’t need my data to go from home to a cloud server and back to home. I have a cloud server through which I can push data if I really need to. The management and diagnostic functionality is “nice to have” but it’s not something I would pay for.

It would be awesome if Particle were to decouple the pieces of the puzzle (e.g. the way AWS generally prices all their services separately). Specifically, make all the following pieces separate, with their own per-use pricing if they’re not free:

  • HW devices
  • internet connectivity, in particular cellular
  • message/event processing in the cloud
  • node management/diagnostic in the cloud
  • cloud-based application storage and compilation

As it stands I’m either driven to alternate hardware or to hacking device-os so I can use it without the particle cloud.

7 Likes