The S4 Open: OPC-N2 Router was introduced in July of 2008 after almost a year and a half of field trials and early adopter installations. Part of that process included conducting market research and locking into a list price. We felt good about the product’s capabilities and market position, so we made arrangements to exhibit in three partner booths at the AHR Expo that year. We found several very important things through that experience.
The pricing structure that we adopted at that time addressed all of the above items by providing an à la carte set of 5 base models with a list of accessories and options to build the solution of choice. When we introduced the S4 Open: BACnet-N2 Router in August of 2009 we paralleled the already established price structure.
Several years ago we streamlined the ordering process by introducing the concept of system bundles in our accounting system. System bundles meant that the systems came complete with power supply, all necessary cables and adapters, and all options necessary for a complete system solution. The pricing did not change but the quoting and ordering process was greatly simplified.
If you understand our product numbers, ordering your S4 Open appliances is easy. Here is how the information comes together in our product numbers:
One of the main things that we are doing with this update is to get our list price document up to date and reflect this same part number structure. In the future, when you request our list prices, the document you receive will use the system bundle convention described above.
Another change that you will see is a slight increase in price for the accessories. The change is minor and is intended to maintain the current pricing after applying existing distributor partner discounts to each product bundle. The benefit here is that we are again streamlining the quoting process and making our quotes easier to understand. Previously, we offered a core product discount and a separate accessories discount to our Distributors and Integrator Partners. This change allows us to apply a single discount level to the entire product bundle.
Prices are dropping by as much as 11% for the -16, -32, -64, and -128 size product bundles with the Upstream N2 option (which provides co-existence with the Metasys® supervisory controller). Previously, the cost for this option was $1,200.00 across the board. We’ve changed the pricing for this option to be sensitive to the size of the N2 Router to increase our competitiveness, especially on the lower size systems. While I’m not sure that competitiveness is the right term to use here since the S4 Open Appliances are the only product in the marketplace that offer this capability, but, if this enables our partners to win more business then I’m willing to say that it makes us more competitive.
The final change corrects a pricing anomaly that existed between the -128 and -256 models. When we took that early step after the AHR experience to offer multiple sizes of N2 Routers (so that we could scale the product for smaller buildings) we decided NOT to increase the pricing on the full size (-256) model right after the formal product announcement. The -256 model was equivalent to the originally offered one size fits all product. That self-imposed price cap made it cheaper to use the -256 model of the N2 Router than to purchase the -128 model and add the cost of the Upstream N2 Interface. When quoting solutions to our partners we always encouraged them to take advantage of this situation. It’s now six years later and we are removing that price cap so that we can make the pricing for the -256 model consistent with that of each of the other models. The result is a significant price decrease for the -256 product bundles without the Upstream N2 option and a modest price increase for those product bundles that include that capability.
If you look at the current average list price of all of our products bundles vs. the new list prices there is an increase of $100.00. Yep, that’s it: One Hundred Dollars over the entire product offering. Considering the increased capabilities and new features that we have delivered I think you would agree that what we have done is mostly a restructuring of pricing that will greatly benefit our integration partners and the building owners that you serve. The new prices will be effective June 1, 2014 and the new documents will be available May 1, 2014.