Qlik on Tuesday unveiled a new capacity pricing model for its cloud-based data integration platform, with plans to soon add new capacity-based pricing options for its analytics suite, as well.
Historically, the longtime analytics and data integration vendor has charged a flat rate to license the use of its platforms. For example, Qlik Sense Business costs $30 per user, per month. Specific prices for Qlik Sense Enterprise SaaS and the vendor's two data integration options are not publicized.
Now, the vendor is adding pricing options designed to enable organizations to more closely pay actual value for their data integration volume -- and eventually for their analytics use, as well. The move comes in concert with Qlik's annual user conference held in Las Vegas through Thursday.
The new options are generally available now for Qlik Cloud Data Integration, which was first launched in November. General availability for the analytics platform is expected later in 2023.
Qlik's new capacity-based pricing comes in three tiers: Standard, Premium and Enterprise.
Capacity pricing is designed to let customers pay a fixed fee -- much as with a flat-rate model. But rather than pay to license users, organizations can now select tiers based on the amount of data they actually ingest and integrate.
It also differs from a consumption-based pricing model, which charges users for the time they spend using a given tool and the compute power that organizations consume.
Key to the decision to introduce capacity-based pricing rather than consumption-based pricing is cost predictability, according to Qlik. Consumption-based pricing can be difficult to predict, while capacity-based pricing sets a price in advance for a specific amount of use.
Qlik did not disclose the cost of its new pricing models or the amount of data covered by each of the new options.
Other vendors, including AWS and Microsoft, offer capacity-based pricing for some of their tools and publicize some of the details. For example, Microsoft has a capacity-based pricing option for Azure Monitor Log Analytics, with its lowest tier starting at 100 GB per day.
Among the benefits of capacity pricing are cost management and flexibility, according to Mike Leone, an analyst at TechTarget's Enterprise Strategy Group.
"By charging organizations based on their actual needed capacity related to data movement or data processing, they only pay for what they need," he said. "If the organization needs to scale up or down, they can do so without incurring additional licensing costs. And they gain a level of cost predictability."
Beyond cost containment and predictability, providing capacity-based pricing options should enable Qlik customers to expand the adoption of analytics and make it more widespread, Leone added.
Mike LeoneAnalyst, Enterprise Strategy Group
"The last thing an organization wants to do is deter users from exploring, experimenting and analyzing data," he said. "Capacity-based pricing enables more users to get hands-on with data and do so without immediately increasing costs. As so many organizations prioritize the democratization of data and analytics, capacity-based pricing is a great path to get you there."
Like Leone, Kevin Petrie, an analyst at Eckerson Group, noted that cost predictability is critical for organizations. He added that capacity-based pricing provides a level of certainty that consumption-based pricing models do not, given the ebbs and flows of cloud-based workflows.
In fact, as more and more enterprises migrate to the cloud, cloud cost management is taking on greater importance.
"Enterprises today struggle to predict the costs of their cloud-based analytics projects because unexpected workload spikes can drive up consumption-based compute costs," Petrie said. "In this context, they need more certainty that their costs will fall within budget. Capacity pricing, such as what Qlik offers, seeks to increase that certainty."
While Qlik is introducing a new pricing model, the new cost structure is an addition rather than a replacement, and existing customers won't be required to switch from the longstanding licensing model. New customers, meanwhile, will have the option of selecting capacity pricing or per-user licensing, according to Qlik CEO Mike Capone.
He added that the impetus for adding capacity pricing came from existing customers.
Like Microsoft, which introduced capacity pricing for Azure Monitor Log Analytics in 2019, and AWS, which launched capacity pricing for QuickSight in 2020, other vendors have offered different pricing options for years. Many Qlik customers pay capacity-based pricing for some of their other tools.
"In talking to our customers, and also looking at the market and the evolution of how people are buying these days, we wanted to respond to that," Capone said. "We watch the market trends, and clearly the trend is to move to more of this capacity pricing."
With capacity pricing now generally available for Qlik's data integration platform, the vendor's next move with respect to pricing will be to make capacity pricing available for its analytics suite, as well.
While he gave no specific timetable, Capone noted that capacity pricing for analytics will be rolled out sometime later this year.
Regarding the reasoning behind starting with data integration first, Capone noted that data integration consumers are more used to capacity and consumption-based models than analytics consumers.
Given the recent explosion in the number of data sources and volume of data that organizations collect, as well as the resulting need for data integration specialists, those vendors are often newer companies with more modern pricing options.
"That market is much more used to capacity-based pricing," Capone said. "It was a way for us to ease into [capacity pricing]. "
Wayne Eckerson, founder and principal consultant at Eckerson Group, pointed out that capacity-based pricing is not innovative.
But he did note that predictable spending is important for organizations, and Qlik is attempting to provide that with its new pricing options.
"Customers want low costs and predictable pricing," Eckerson said. "And definitely No. 2 if they can't get No. 1."
Eric Avidon is a senior news writer for TechTarget Editorial and a journalist with more than 25 years of experience. He covers analytics and data management.