Last year April, Australian design tool provider Altium Ltd. rolled the dice, slashing the price of its Altium Designer circuit board tool by about 75 percent in the hopes of spurring wider adoption. On Monday, Altium (Sydney) issued a statement saying it has picked up more than 500 new customers in the U.S. over the past 12 months.
But here's the catch: Altium executives say the price cut has had little, if any, impact on the new customer wins.
They cite a customer survey conducted last December, which found that only 14 percent of those customers who switched said they did so because of low cost. The majority of switchers cited "high value" (38 percent) and product capabilities (33 percent).
"It was interesting to see that the smallest pocket chose it because of cost," said Gerry Gaffney, CEO of Altium's North American operations, during a recent interview. "There was an expectation that price would have been a bigger factor than it turned out to be in the survey."
It's a little tough to swallow that the price reduction was not a significant factor here. Despite the reasons they site, you've got to believe that the price of the tool played a role in customers' decision. After all, the common definition of "value" is worth relative to cost. So price is at least part of the equation.
The survey, which was compiled from 208 responses, also found that 84 percent of Altium's new users had experienced productivity improvements of more than 200 percent. Eighty-five percent of respondents also said the degree of difficulty in migrating to Altium Designer was as expected or easier than expected. And 89 percent of the new users said they would recommend Altium to colleagues, according to the company.
The survey also found that users who are switching to Altium are pretty evenly dispersed across a wide range of application markets, including medical devices, industrial, telecommunication and automotive.
"It's interesting that the adoption is not coming from a single vertical market," said Bob Potock, director of technical marketing for Altium. "That was quite telling in the survey."
Despite the rosy numbers, Gaffney said Altium has no intention of jacking the price of Altium Designer back up to the old level. Thought the company may make "tactical tweaks" to pricing, the "price range that we are in is probably where we'll stay," Gaffney said.
Note: There are some caveats to the 500 companies figure. Altium counts different divisions of the same company as separate users, for example.