Consumers are price-conscious. We all have to be especially in the "new economy."
In 2010, more than any other year, we've had marketers and representatives of marketers (agencies, IT, etc.) come to us for more information about our DAM SaaS solutions and one of the first questions that is asked is often "How much does it cost?".
Now I don't want to discourage you to contact us and I don't blame you that "price" is top-of-mind. You have a budget just as I do.
However, as a DAM vendor, we're frequently fielding questions about price before determining if we can help an organization solve their problems and meet their needs with digital asset management. Maybe you ask about price first because you don't know what other questions to ask… we'll get into that later. But, if you don't know what your needs are, you're going to end up with someone else telling you what your needs are.
Let me tell you that Digital Asset Management is not a commodity. Let's first look at what makes a commodity a commodity.
Question: What Is a Commodity? (From Mike Moffatt, former About.com Guide, #1 Google result for "What is a commodity?")
Answer: When an economist, economics professor, or economics textbook talks about a commodity, they mean a good that possesses the following properties:
- Usually produced and/or sold by many different companies
- Is uniform in quality between companies that produce/sell it. You cannot tell the difference between one firm's product and another.
And, as you'll see in the Wikipedia entry for "Commodity" … Commoditization occurs as a goods or services market loses differentiation across its supply base, often by the diffusion of the intellectual capital necessary to acquire or produce it efficiently.
Sure, there's parts of DAM found in some technologies for image libraries and web galleries that are said to have "commoditized DAM" for these key scenarios with marketing work groups. The experts will tell you that the main difference between those technologies and true DAM is scalability, in addition to other vendor intangibles to consider—service, support, roadmap, integration and stability.
Why DAM is not a commodity
There is so much fragmentation in the Digital Asset Management market that prove DAM is not a commodity and the prices reflect that. The DAM market is still in its growth phase and – according to Frost & Sullivan – is expected to reach a quarter of a billion dollars by 2013.
Products are not uniform and prices are not universal. There are several different tiers or classes of solutions… There's enterprise, mid-market, lightweight, workgroup, and niche DAM systems and many that bridge the gaps or create gaps of their own.
Different deployment options provide for a tremendous number of choices and factors to consider. When you and your IT team (or without your IT team!) get together, you'll find options for installed DAM software, hosted DAM software, DAM Software as a Service (SaaS), open source DAM and cloud-based DAM. You'll find combinations thereof and find those that offer a migratory path from one to the other such as SaaS/hosted to installed or a hybrid of the two.
The mix of core features plus specialization for specific workflows create additional variety. Most true DAM vendors offer some universal features for cataloging and repositories. Moreover, many solutions offer a number of specialized features and configurations fit for specific use cases and special audiences. Some DAM solutions specialize in workflow (though most lack), some specialize in broadcast video, some with image repositories and brand management, and others with creative files offering CS integration. Some solutions do a good job of elegantly crossing over, while others have a very niche focus.
The DAM market is very competitive and the competition goes beyond price. There's a core group of a few dozen DAM vendors or so that are said to be the premier players. (Research who they are at the DAM Channel.) Then there are a multitude of new entrants, substitutes and others that offer DAM functionalities as part of some other form of marketing technology, content management or media platform.
Like I said earlier, maybe you ask about "Price" first because you don’t know what else to ask. But maybe it's because you see DAM as a commodity. It's my job to offer enough resources that you can be educated about the differences in DAM solutions, and learn what questions to ask that will separate the best from the rest, and the fit from the s**t.
My second-part post will include more about "What questions to ask" as you evaluate Digital Asset Management technologies as the foundation for the future workflows for creating, managing and distributing digital media for multiple channels.