HP Seeks to Block Competitor From Revealing Its Pricing

Matt Asay writes "On October 13, 2008, Hewlett-Packard sent a complaint to an open-source competitor, GroundWork, asking GroundWork to stop revealing HP's 'confidential' pricing. CNET has posted the letter, which indicates that HP doesn't want its pricing revealed, but which doesn't question the veracity of the pricing (which, not surprisingly, is 82 percent higher than the open-source vendor's). Does HP think its pricing is really a secret? It's publicly available at GSA Advantage. Guess what? HP software costs a lot of money, but presumably feels that it can justify the high prices. Why try to hide the pricing information?"

Comments

Differential Pricing?

[msgmonkey]

Maybe the price of the software varies significantly from customer to customer. I mean if you just found out that you paid 2x as much for software mentioned here you'd be pretty annoyed.

Plus there is always corporate paranoia..

Re:Differential Pricing?

[wisty]

Companies don't like to release pricing, because then they would be more compelled to compete on price.

Re:Differential Pricing?

[betterunixthanunix]

Actually, they do not like to release pricing because it would take away one of the best bargaining pieces they have: the ability to lower the price during a sales meeting. Enterprise vendors love to tell a customer that they are going to lower the price by 50%, 60%, 80%, etc., because in the end, it works out for everybody. The customer goes back thinking they got a deal and the vendor still turns a profit (because the list price is marked up significantly). Once you are forced to reveal your list price to the world, it becomes more difficult to convince your customers that you are even willing to give them a discount or negotiate, because they have already seen the price and assume that is what they will be charged. The order in which things are revealed to a customer will determine whether or not that customer is willing to close the deal and buy the product.

Re:Differential Pricing?

[Hurricane78]

That's exactly what happens in the whole construction material industry (at least in Europe).

Every client (craftsman's business) gets a different price (or discount as they call it), depending on how a "good client" they are. (Depending on how much they like to keep you because you buy much and pay early, and so on).

I'm pretty sure HP does the same. It makes sense to handle good old clients different than that new company that can't quite guarantee a quick payment.

Of course, if that "bad" company starts to know how much they really can push the price, they might start making demands.

On the other hand, this is a typical monopoly problem, because in working economies, the client can do the same, and pay more for quality suppliers.

Re:Differential Pricing?

[Ihmhi]

Everyone would take advantage of it, and I'm sure they make a hell of a lot of money on the companies too stupid to think of asking for a lower price (or go lower than they already requested).

Re:Differential Pricing?

[Ihmhi]

Couldn't they just set their list price at a significant markup to compensate for it?

If the real value of their software is $5,000, but they start the negotiations at $10,000, then they should list it somewhere between $10,000-$12,000.

Re:Differential Pricing?

[theaveng]

So HP salespeople are deceitful, trying to mislead customers into making them feel they got a good bargain (even though they paid exactly what everyone else pays). Sorry but I prefer honesty. I prefer openness. Same as any other retailer like Walmart or JCPenney. The list price is there for all to see, and not hidden behind a bunch of marketing BS, and sleight of hand.

I'd tell HP to go frak off. If I want to tell my friends, colleagues, whoever that I was able to get HP software for 50% off the list price, that's my right of free speech to do so. If HP does not like it, then too bad. My mouth is my mouth and I will continue using it no matter what the HP CEO thinks about it. He can bend over and sck my ___ for all I care.

Stupid arrogant corporations. I hate them. They are becoming modern-day versions of kings & tyrants.

Re:Differential Pricing?

[Paralizer]

You're right, except I don't think making their list price public makes a whole lot of a difference. No one pays full price, it's just like a car dealership. So if a particular vendor has a higher price but a good product, you're probably still going to at least look at that product and get a custom quote. From there you decide if the product itself is a good match for you, and if it is then you can start working with the vendor to reduce the price.

I just got my first IT job about a year ago fresh out of college. One of my first projects was to research, recommend, buy, and implement a particular product. I did some research and ended up being convinced this certain vendor has the best product for our needs. Their list price on their website was $29,000, +25% for each additional CPU over one, +20% support per year. I then called them, had a couple web demos, and began exchanging phone calls with the sales rep. What we wanted came out to about $75,000 with a 5 year support contract. Within a couple weeks (hey, this was my first time so it took a while) I had talked him down ~$40,000 with a 5 year support contract. It was easy, it didn't take a lot of negotiating, and I think I could have got him down more if I really wanted.

My point is they will lower their prices without so much as you asking them to, and that is what they are counting on -- you get interested in the product, they sell it to you for less than list price, and you're a happy customer who hopefully has repeat business based on your positive experience. List price means very little.

Re:Differential Pricing?

[durdur]

Another reason not to publish prices is that it facilitates unfair comparisons. An analyst firm or a competitor comes out with a report that says your software is 30% more expensive than a competitor's. That's probably bogus because of discounting and most people will realize that. But it can hurt you anyway.

Re:Differential Pricing?

[filthpickle]

salespeople are deceitful

you didn't already know that? (I don't disagree with the gist of your post)

Re:Differential Pricing?

[isj]

The salespeople may be forced to do this. There are industries (eg. telco) where the procurement managers won't sign a contract unless there is a discount. If the salespeople know that then they are forced to advertise a higher base price.

On the other hand, in some cases the discounts and negotiations are ridiculous. I once experienced a router vendor salesman responding to a coworker's concern for the price with "oh, no problem. You can get 50% discount". That is a bit silly.

Haggling over the service, options and price is ok. I don't like haggling over the price only.

Re:Differential Pricing?

[theaveng]

Some people pay full price. My friend from China paid full price for an Acura car, because he didn't know he was supposed to haggle. He thought the price on the window was what everyone paid - just like in a store.

Re:Differential Pricing?

[sumdumass]

The problem with that theory is the effect it has with people who look at the pricing and say "there are some other solutions that work well enough at cheaper prices".

I would think that software marked at twice their real world value would scare a lot of people away before the chance to bargain ever comes into play. You don't really want people to consider other people's/company's software before yours just because of a marketing ploy. That's actually what is happening in this case with HP claiming confidentiality except the marketing ploy is another company's. You have a lot less control over other people and companies then you do over your own so unless your the only provider of the software, I wouldn't think it would be beneficial.

Re:Differential Pricing?

[jellomizer]

That and public display of pricing often cause consumers not to Apples vs. Apples type of purchase.
Organization X get product A for $3,000
Organization Y is told their software will cost $5,000

Now the reason could have a huge amount of reasons.

Organization X can be good at paying the bill while Organization Y takes forever and needs numerous calls to get it paid.
Organization X has been a steady repeat customer. While Organization Y will purchase a product and will not purchase anything else in a long time.
Organization X may have less need or proven to to be less of a support sink, while Organization Y is a constant problem.They
Organization X may put a Powered by Your Company on its page. While Organization Y will not.

They don't want their prices public because they don't want to know how they rank and value their customers. This is not evil or greedy, it is business. You want to keep good customers for the long term so you will be willing to cut your margins. But if the company is a problem and you don't see much opportunity take what you can get.

You tend to do the same thing as an employee. You are willing to work for less per hour if you know you job is relatively stable like you will have consistent paid work. vs. if your a 1090 employee where you charge 3x as much per hour for your work because you know there could be weeks or months you may not get paid for, and if your quality isn't up to snuff you may not get paid for your work. Or if there is a job you don't like or have to work hours you don't want to you usually ask for more pay to do undesirable work. The same thing with companies and their customers. If the customers try to rip them off then the company will build in padding to prevent this.

Some big companies will take a 10% discount off the top if they pay on-time for your services as part of the contract (after they agree the rate) so what happens when it is time to re-contract the rate the client will add 20% to the price. While their other client who is more friendly may get a deal which is 10% less then the the first company at start because they have been good at paying on time.

Companies like to reward good customers. But unfortunately if the reward is public bad companies see it as being punished as bad customers.

The bible passage explains this well: Matthew 20:1-16 (You don't need to believe in the mythicism but take it as a philosophical example)

Re:Differential Pricing?

[Anonymous Coward]

I'm currently evaluating URL filtering software. All of the vendors have moved between 40%-90% off list. Most around 50%.

Squid does this beautifully and is free & opensource. We run it on a triad of caches in front of ~3500 users.

Re:Differential Pricing?

[zippthorne]

He didn't get TOO ripped off, I think, unless the car guide sites are showing inflated values. The dealer margins are big, but not far from 10% of the invoice price*, at least in the "budget" car regime.

*Yes, I know about dealer incentives. Tack on another 5-10%, depending on where in the model year you are. It's still not, percentage-wise, nearly as much markup as, say, that $5 foot-long at subway.

Re:Differential Pricing?

[billcopc]

bad companies see it as being punished as bad customers

So where's the problem ? If I'm fed up with a resource-hogging deadbeat, I let them know and they are free to hog someone else's time instead. They stick around because they have nowhere else to go, or they know the competition sucks...

If HP has a legitimate reason to charge a different price, I think they should man up and be perfectly frank about it, like saying "Shitty clients pay more, because they cost more to support".

Coddling those shitty clients only leads to more shitty clients draining your resources, often at the detriment of your awesome clients... unless you're in the business of cleaning shit up.

Re:Differential Pricing?

[cerberusss]

they sell it to you for less than list price, and you're a happy customer who hopefully has repeat business based on your positive experience

However, the next time you *will* pay full price or at least closer to it.

Or worse, over full price. A friend of mine asked his regular Dell accountmanager for a quote. When the quote turned out to be over the expected amount, he checked the website, and lo and behold -- the website price was lower :-) Turns out they give you a very low first price, then sometimes try to errrr... make up for that :-)

Re:Differential Pricing?

[wiz_80]

Actually actually, that's not how it works at all. I work for an enterprise software vendor, and the list price is where we start quoting from. If you buy ten seats, you get list price. Buy a hundred, we round it down to the closest round number. Buy thousands of seats, you get a big per-seat discount.

We do this because we make it up on volume, not to mention the services large installations require, the kudos associated with big-name references, and so on. We never inflate list prices in quotes. In fact, I believe that is a termination offence at my current employer.

That's not to say, of course, that some quotes don't get padded up before getting slimmed down again in front of the prospect's purchasing team, but we are talking about things like 24x7 support which can be negotiated down to 10x5, or using one pricing model when another might be more advantageous, but all of these are based on an unalterable price list.

Re:Differential Pricing?

[wiz_80]

You also have to remember that the product is not worth the same amount to different people. One user might be very happy to shell out a million bucks and still consider it a bargain, while another will stretch to justify a hundred grand - for the exact same tool. I have seen this happen first hand.

What happens then is that there will be a list price somewhere in between what the two users would be willing to pay. The first customer has a second item tacked on to the quote to make up some of the difference between what the tool is worth to them and its list price, while the second customer gets a substantial discount on the list price. This is possible because the cost of a single copy of the software is next to nothing, once the development has been paid for.

Re:Differential Pricing?

[wiz_80]

Something else to bear in mind is that many companies sell you the software with an attractive discount, but then charge maintenance on the list price. Maintenance is typically somewhere between 18% and 20%, so if you score a 40% or 50% discount on the software itself, you are in for a nasty shock when maintenance renewal time comes up.

Re:Differential Pricing?

[jnicole4]

This is how many companies oporate. I mean ask the person sitting next to you on your next flight; I guarentee you each person in the row paid a different price. It depends on how much information you know before you make your purchase. Good marketing...maybe, irritating to the consumer...most definitly!

Re:Differential Pricing?

[Requiem18th]

> This is not evil or greedy, it is business.

  It's greedy because if you really believed in your pricing schemes you could be open and stand by them.
  No, instead you prefer to use UD (as in FUD minus the F) to get a better cut for you without accounting for it.
  Quoting bible shit flags you as a loon automatically, that passage justifies HP for charging whatever they want, nobody is discussing that, this is about HP trying to silence third parties to keep its costumers immersed in ignorance.

  But that okay! They are shady because they are too humble to take credit for their generosity

  Christianity, stupidity and greed are never two feet apart.

Re:Differential Pricing?

[jellomizer]

How is giving a good customer a discount greedy? If you are going to get open pricing all it will end up is everyone paying more, as they will be forced to be greedy and keep pricing larger then smaller if they need to advertise their pricing, then they need to keep margins high to cover the good and the bad favoring the bad.
You are pissed because you are such a jerk to the company that they will charge you the full price. While the guy who is actually nice to them gets a discount. I doubt that you have ever done the books for a company you will soon realize that things are far more expensive then you realize, and that you do need margins to keep your company in business. Normally at costs means at a loss. But for a good customer you are willing to sell at small margins, but if you need to show that and the jerks like you who demand the same pricing will only force the company to raise the good customers pricing as this information creates new costs of loss of profits.

Re:Differential Pricing?

[jellomizer]

Well Pissing off bad customers gets the effect of bad press towards you. However rewarding good customers will improve the chances that they will give good press to you. Even if they are Bad customers you need to make sure they have a fair deal, as they don't have a reason to hate you and give you bad press. However if they are a good customer and get a deal, they will have a reason to like you better. You make your public prices for the average bad customer when they prove themselves you give them a better deal.

Re:Differential Pricing?

[mysidia]

No, you don't. You do not want to know how cheaply some other gets the same service, it would make you feel bad.

No, i'll feel good, I won't buy from them, if they won't give me a good deal compared to competing products that satisfy my primary need.

Re:Differential Pricing?

[mysidia]

You also have to remember that the product is not worth the same amount to different people. One user might be very happy to shell out a million bucks and still consider it a bargain, while another will stretch to justify a hundred grand - for the exact same tool. I have seen this happen first hand.

In that case, the product is worth $100k if they'll sell it for 100k.

If they sell the very same thing to the next person for $1 million, they are gouging.

This is like going to the gas station and asking to buy 5 gallons of gas. The attendant asks you how much $$ do you have? Or.. many gallons you have already in your tank...?

Your need for a specific thing has nothing to do with its actual worth in the marketplace, or how much you should pay for it.

They are exploiting their need for the product to give them an unfair price.

The second company should hire the first company as a broker to buy the product for them at their low price (for a nominal fee), since clearly the first company has done a better job at getting a reasonable price for a product that is not worth nearly $1 million.

Re:Differential Pricing?

[Requiem18th]

Christian hypocrisy at its best. My post argues that and I could simply tell you to reread it over and over.

  This is your pretend scenario: "My prices are fair but I give discounts to nice guys, but please don't let my ugly customers I despise know about it because it can hurt their feelings".

  Laughable bullshit.

  Real world scenario: "I try to see how gullible are the clients to charge as much as I can and still make them believe I'm giving them special favors".

Re:Differential Pricing?

[MentlFlos]

Ah, so you don't change the price of the car but you add undercoating and "free" oil changes for 1 year. :D

Re:Differential Pricing?

[lpq]

When some government auditor wonders why they paid $20K for an HP laptop instead of the $1150.00 quoted pricing, it's a pain for the buyer to have to explain that they have a special contract through which they get their HP computers:

* First going through a NO-BID Alaskan Native American firm (except from normal bid process because they are a qualifying minority) in AK (they hold back $7K as handling fee).

* Second, they kick back 2.3K to the state senator's political committee for re-election, and have some contractors deliver some winter jackets -- out of white-bear skin, baby-seal for the kids (~worth $3-5K)

* Third the native firm subscontracts with Haliburton (who has called 'dibs' on the D.C. contract market) and pays them 10K to procure the PC. They charge $5K overhead and then

* Fourth, give $5K to their new employee who was working for the government when the PC was ordered (he ordered it!), but has since quit and taken a job in the private sector working for Haliburton.

* Fifth, He orders it from CDW on a 10% GA discount, costing him about 1K and keeps the 4K as his bonus for inventing and procuring the government contract.

* Six, with typical Republican efficiency, they've gotten rid of all the government employees who would normally handle the entire transaction, and replaced them with contractors who end up charging 10 times as much as what it was costing the government to do it in house. Especially, since many of those laid off during the Bush-II years had been career, government administrators, expert in their jobs and actually knew what they were doing. But, then, that's why they had to be encouraged to quit (or fired in some cases).

== Neo-con government maxims: (1)eliminate government functions and outsource all work to gain the efficiencies of the market (except the outsourced work usually goes to predetermined vendors via under-table negotiations/'campaign donation'). (2) If you can't eliminate a government function, remove all enforcement branches: The Consumer Safety Commission can no longer "order" that a recall be done on something 'unsafe' -- they must 'beseech' the retailers, who (in cases where the original seller has gone bankrupt or 'disappeared') often must handle the expense of the recall themselves and, in some cases, eat the cost of the goods. The FDA -- food inspectors have had their budget and numbers cut -- notice how lead poisoning, melamine poisoning, and food poisonings have been in the news alot more frequently the past few years? (3) if you can't eliminate a government function either a) (best choice) place someone hostile to the government organization in charge of it: examples: James Watt as Interior Secretary, or Bush's pics for our UN ambassador(Bolton:someone who thought we should exit the UN and it should be disbanded), Dept-of-Interior (an oil-drilling rancher), Dept-of-Education (someone who has said he wants to eliminate public schools)...etc. If you can't find someone hostile -- place someone who doesn't know anything about the job (recent attorney generals, FEMA("Browny" in Katrina), et al.)....

Yeah -- there are all sorta of reasons why corporations, especially ones that do business with the government, to not want decisions and pricing to be open for public review....

Re:Differential Pricing?

[jhol13]

Competing products? What are you talking about?

I was just mentioning that big companies do get better deals on pretty much everything.

Perhaps due to buying more (and therefore deserve it) or perhaps just because they can put pressure (and then it is questionable whether they deserve it or not).

Re:Differential Pricing?

[jhol13]

Would you be surprised if some big delivery companies get gas cheaper than you do?

Why?

Re:Differential Pricing?

[theaveng]

It doesn't bother me if someone gets, say Guitar Hero III, for $10 at Walmart. I just congratulate them and ask how I could get a similar deal. And then I keep my eyes open for future deals.

Re:Differential Pricing?

[theaveng]

If HP and other Companies are not printing their list prices, then no, I can't take my dollar elsewhere because I'm not getting accurate information. I'm stumbling around in the dark. This is no different than a Wall Street company refusing to share their quarterly profit reports, thereby blocking stock purchasers/customers from making informed decisions.

Re:Differential Pricing?

[Thing 1]

He can bend over and sck my ___ for all I care.

Wouldn't that be better achieved by kneeling?

Re:Differential Pricing?

[wiz_80]

:-) Kind of, I suppose, but in this analogy the undercoating really is useful - just not to all drivers, perhaps only to those who drive off-road. As for the oil, think of it as a pre-paid bulk buy of oil. If you use less oil than you paid for, you lose, but if you use more, you win! You do an estimate of your oil consumption, taking into account consumption over the past year, projected changes in your driving, and so on (call it a Return on Investment calculation, or RoI), and if the purchase makes sense, you go for it.

There is nothing nefarious going on per se, as long as the car being sold works and drives. The end result is that people who need cars have paid a price they were willing to pay for them. The fact that some of those prices were different is neither here nor there.

Re:Differential Pricing?

[billcopc]

You're making the assumption that the bad customer's opinion has any traction. When the market is so huge, as it is in the computer industry, we don't need to be fighting over the bony scraps of consumerism. Inevitably, some bottom feeder will come along and pander to all the scum, and he will earn his living. The rest of us can enjoy a scum-free business.

You needn't look further than the PC vs Mac debate for an example of this. Apple doesn't want a piece of the competitive budget segment, because it's too much work and not enough profit. They've identified their targets, and they try to stay focused. Now the problem with Apple is they're offering shoddier products with each passing year, while still expecting top-shelf profits - but that's a separate topic altogether.

High Prices?

[Anonymous Coward]

I thought that is what their name stands forâ¦

It's a stupid practice...

[Enter the Shoggoth]

but "Enterprise" software is normally never sold at the list price, so I suspect that HP doesn't what the list price used in a comparison, because they aren't actually going to sell it at that price.

Re:It's a stupid practice...

[theaveng]

I don't know about "enterprise" marketing, but in retail marketing that's called false advertising. If you advertise a list price but never sell anything at that price, it's an illegal and misleading act. HP should be held to the exact-same standards.

Re:It's a stupid practice...

[sumdumass]

It's not technically illegal. As long as the consumer knows how much they are paying before the sale is final, that's all that matters. If you go into discounts retail shops you will see the price listed as the manufacturer printed them on the box. This is the list price (MSRV) and then somewhere there will be a sign saying "All X some percent off" or even "all X this price".

You can and do have price points in marketing and certain customers can and do get different points based on a number of things too. I have one vendor that gives me almost 50% off the lists price if I spend over $10,000 a month (they have steeper discounts but I never have hit higher then this for an average). The rest of the time, the price point set me at 35% below the price. Where it becomes deceptive is where it costs more then the advertised price or when the customer doesn't know the real price before ordering/paying.

I'm willing to bet that if you check your state's false advertising laws or deceptive business practices laws, there is some requirement for it to harm consumers or be potentially harmful to consumers before it can be enforced.

Re:It's a stupid practice...

[Rary]

I don't know about "enterprise" marketing, but in retail marketing that's called false advertising.

First, they're not advertising it. In fact, this very article is about them preventing it from being advertised.

Second, "false advertising" really refers to the product, not the price. Prices are almost always variable. If a commercial comes on TV and says "buy product X for only $29.99", but your particular favourite store has it on sale for $19.99, do you complain that it was false advertising?

In this case, the point is that there really isn't a true list price. There is just a starting point from which to negotiate the actual price.

Re:It's a stupid practice...

[mysidia]

That's easy: HP doesn't publish any "list prices", the only prices they show are on internal publications the public has no access to.

Hence the reason HP is trying to block a competitor from revealing their pricing.

Re:It's a stupid practice...

[hardwarefreak]

but "Enterprise" software is normally never sold at the list price...

Pretty much anything "Enterprise" is never sold at list price.

Case in point: TPC benchmark style systems

http://tpc.org/results/individual_results/IBM/IBM_595_20080610_ES.pdf

Look at "Total" and "Total IBM Discounts*" toward the end of page 3. Total list price is $35,263,161. Total "IBM Discounts" are $20,273,753.

IBM is willing to give *anyone* purchasing this configuration nearly a 60% discount right off the bat. Obviously, any company giving an immediate $20 million discount has their shit overpriced by $20 million.

And this is before negotiations even begin, which would likely net the buyer another $7 million or so in savings.

Software feels it can justify the high prices

[Anonymous Coward]

How arrogant! What's next, software that feels it doesn't need programmers?

barbara streisand effect

[apodyopsis]

another fine example of the barbara streisand effect in the making.

see...
http://en.wikipedia.org/wiki/Streisand_effect

stupid. sometimes I wonder how these executives think, or even if.

Re:barbara streisand effect

[Rogerborg]

When they dispatched the Pony Express to deliver the letter, did they send out a few extras to ensure that at least one made it past the velociraptors?

Re:barbara streisand effect

[Lonewolf666]

And free publicity for GroundWork. With this Slashdot article I guess the number of people who are aware of that alternative to HP has multiplied ;-)

Re:barbara streisand effect

[grub]

Indeed! I've never heard of Groundwork before and sent myself email at work (on holidays) to have a look at it when I get back.

Re:barbara streisand effect

[sumdumass]

Well, it appears that the Incas of Puru did. Not only do they depict dinosaurs attacking and being attacked in their art, pottery, and clothing, we have seen duplicate Inca message strings which were supposedly coded messages that runners would take from one location to another. It has been suggested that along dangerous routes, multiple messenger runners would be sent to ensure the probability of them getting through.

If you watch south park, they just recently did a two part video making fun of the Inca dinosaurs connections where they did the land of the lost giants and portrayed them all as Guinna pigs and Guinna pigs related creatures.

Erm...

[abigsmurf]

I thought this was pretty much standard in a large number of industries, especially when contracts are involved.

If your prices become well known, you leave yourself open to being undercut or pissing off other customers who weren't as good at negotiating a deal. Conversely, if you're making a bid for an exclusive licence and the amount you're bidding becomes public, a rival can come in and bid slightly higher to sabotage you.

Re:Erm...

[Yaa 101]

Erm... this is called open market.

Re:Erm...

[abigsmurf]

And? An open market means they're free to price their goods at whatever they want to whoever they want and people can choose to buy or not buy at those prices. It has nothing to do with making their quotes confidential.

It's pretty hard for a single company to be a cartel or fix prices by themselves in a competative industry.

Re:Erm...

[syntaxglitch]

And? An open market means they're free to price their goods at whatever they want to whoever they want and people can choose to buy or not buy at those prices. It has nothing to do with making their quotes confidential.

On the other hand, a free market itself isn't all that great. For a free market to provide optimal results, a variety of other conditions must be met, one of which is that all market participants have perfect information.

Trying to keep prices secret is one popular way that companies try to give the middle finger to the Invisible Hand and profit off of engineered market inefficiency.

Re:Erm...

[bill_mcgonigle]

On the other hand, a free market itself isn't all that great. For a free market to provide optimal results, a variety of other conditions must be met, one of which is that all market participants have perfect information.

If prices are secret it's not a free market. Not arguing with you, just pointing out that not all markets are free.

Session Terminated

[cjfs]

That "publicly available at GSA Advantage" link from the article goes to:

Session Terminated Your Advantage! or e-Buy session has been terminated for one of the following reasons: ...

So was it really publicly available?

Also they'd have to state that HP authorized it to be public on the GSA site. Otherwise you could just have two sites referencing each other saying the info is already public.

Re:Session Terminated

[Registered Coward v2]

That "publicly available at GSA Advantage" link from the article goes to:

Session Terminated
Your Advantage! or e-Buy session has been terminated for one of the following reasons: ...

So was it really publicly available?

Also they'd have to state that HP authorized it to be public on the GSA site. Otherwise you could just have two sites referencing each other saying the info is already public.

Well, considering that GSA Advantage is readily accessible and searched from gsa.gov; it's pretty much publically available.

The only disclaimer on GSA Advantage's main page is:

*** WARNING *** This is a U.S. General Services Administration computer system that is "FOR OFFICIAL USE ONLY." This system is subject to monitoring. Therefore, no expectation of privacy is to be assumed. Individuals found performing unauthorized activities are subject to disciplinary action including criminal prosecution. Privacy and Security

which is a pretty standard US Government disclaimer; what constitutes "Official Use?" is certainly an open question; especially since much of that info is probably available via a FOIA request anyway I would doubt that simply searching prices would cause any problems.

Interestingly, the disclaimer seems to be aimed at US Government employees because it refers to "disciplinary action including criminal prosecution" rather than just criminal prosecution.

Re:Session Terminated

[Warped-Reality]

"For Official Use Only" is a type of non-public but unclassified government information. Which means that either that website shouldn't be there or the banner shouldn't be there...

Wiki page on FOUO

Re:Session Terminated

[Registered Coward v2]

"For Official Use Only" is a type of non-public but unclassified government information. Which means that either that website shouldn't be there or the banner shouldn't be there...

Wiki page on FOUO

I'm not sure that it's a FOUO classification but a statement of use similar to US Gov vehicles that say FOUO but certainly are not document.

I'd say the banner was incorrectly used if they really meant it to be FOUO.

Re:Session Terminated

[mysidia]

Yes, but if groundwork directly obtained the information from someone who was in violation of a confidentiality agreement with HP, and they had encouraged them to divulge the information in violation of the agreement, or Groundwork discovered the info through other improper means (corporate espionage), they could be forced to pull the info and charged in court with "misappropriating" a trade secret (I.E. discovering the secret pricing improperly).

On the other hand, if Groundwork got the information thirdhand, i.e. someone unrelated to groudnwork improperly placed the document in a public place (with no encouragement or request from Groundwork's staff), and they were just one of many unauthorized parties from the general public who happened to get the document, then it is doubtful they will be forced to pull the documents and keep them offline (should Groundwork vigilantly pursue their 1st ammendment rights and vigorously defend against any attempted legal action by HP).

Sad.

[lobiusmoop]

I remember when HP was run by Engineers, not the marketing and legal department.

Re:Sad.

[amorsen]

I remember when HP was run by Engineers, not the marketing and legal department.

They still are, but they changed name to Agilent.

Re:Sad.

[Anonymous Coward]

I've been a software developer at HP for a little while since my previous employer was aquired. The amount of sales propaganda bullsh*t we get fed is rediculous.

HP has an online 'garage' thing where staff are supposed to submit ideas in the hope that their ideas are supported and developed. It's aimed at the technical staff to 'foster innovation', and yet the ideas are judged on how much money they can make HP and how fast. Nothing to do with making the world a better place, despite what their propaganda (like "the HP way") spews.

It should be noted that I view the average slashdot poster as a naive socialist hippie compared to myself, but maybe HP could do with some of that...

My impression of HP is that it's a massive hypocritical money-grubbing sales team.

Re:Sad.

[Jeff DeMaagd]

This is why judgments on corporations or people should be made on what they do, not what they say. It's easy to say anything. It's harder to make actions lie.

That said, people that believe corporations aren't out to make the most money that they can really don't understand how corporations generally work. They're not out to improve the world unless that's where they make the most money. I think you can blame stockholders for that, and maybe more specifically, day traders on the part where corporations look for the quickest bang for the buck, those people are often the kind that are eager to make a quick buck, not build wealth over the long term.

Re:Sad.

[Trip6]

Sounds like you need a new job big fella...

Re:Sad.

[tehcyder]

My impression of HP is that it's a massive hypocritical money-grubbing sales team.

If you find a company's culture objectionable then leave, it's not like you've been drafted into the army or something.

Re:Sad.

[Trojan35]

It's aimed at the technical staff to 'foster innovation', and yet the ideas are judged on how much money they can make HP and how fast.

If I were an HP shareholder, I would be absolutely appalled to find out they were trying to make me more money. Appalled I tell you.

Re:Sad.

[HiThere]

Considering that the path they're choosing to "make money" is offending past repeat customers, you *ought* to be offended.

Pricing is marketing

[Sobrique]

This one is easy. They keep their pricing quiet, because they use it as sales and marketing manipulations - give them a list price that's insanely high, after you've vaguely got them interested, but then negotiate a discount of some huge percentage.

This is a long standing scam, where there person 'handling' the deal gets credit for saving oodles of money on the list price, and the salesman has negotiating room to figure out just where he's padding his commission. The list prices are therefore completely unrealistic, and they don't want them published because that might stop people talking to them in the first place.

I can tell you for certain that we (as in, large financial sector company) get 50-75% _discount_ terms with quite a lot of our vendors of IT hardware. I don't know what the rate is with HP hardware (we do use it) but I know it's a substantial reduction on 'list' price.

IT pricing

[pegdhcp]

Most IT related producers, prefer to have very high (higher than reasonable) prices in their GPLs, and then apply a big discount to that price when an actual customer shows up. This is useful for seller, because s/he can say, "see how much we value your business, and cut into our profit just to have you as a customer" and is also useful for buyer, because it is not easy to convince suits, that IT is something you need to spend money on and you cannot use advices from 14 years old neighborhood kids. So by claiming it was sooo expensive and you bargained a big chunk from seller, you can get the signature for backup tapes you need since last week. However as any kind of trader tends to make bigger favors to bigger customers, sellers need to keep their discount rates secret, in order to be able to keep negotiation power.
Just to keep regular IT types in the dark, some firms claim that their GPLs are trade secrets etc. but in fact that is not right. For example a big Network firm, who is obsessed with blue-green boxes and originated from San Francisco, do not give GPL to customers publicly, but their sales representatives hand out them as a very secret, job risking (!) favor. And while everybody know that their regular discount rate in my country starts at 32%, I saw some certified engineers of that company on the customer side, claiming obtaining an amazing 20% discount, thus buying equipment 17% above the market, and showing themselves as indisposable negotiators to some upper level managers, who do not know the difference (or lack of, depending on the case) between a computer and calculator...

Re:IT pricing

[RMH101]

+1 to all above, and in addition:
Pricing is seldom just ordering of a specific licence or service. HP (and any other big vendor) will want to consider what other services they'll be selling alongside that, and make a pricing decision based on the bigger picture. E.g. we've just got a 75% discount on Oracle licencing - partly because it's their year end coming up and they want the sales numbers, and partly because they know that the project the licences are being used for will scale up and up over the next couple of years and they'll make a boatload of money. It makes most economic sense for them to snag us by discounting the licences now.

Re:IT pricing

[Requiem18th]

I don't how you will be using it but it seems it makes more sense to you to drop oracle for postgres.

They're just enforcing an NDA

[Anonymous Coward]

HP found out that one of their competitors (GroundWork) has HP's confidential documents. They shouldn't have those - somebody has obviously broken an NDA. Do GroundWork have any other NDA'd documents that would allow them to unfairly compete against HP? HP probably don't know. So HP are investigating, and one way they are doing that is by asking GroundWork where they got the document from. (Oh and they also ask for the document to be returned and for GroundWork to stop using it; that doesn't stop GroundWork from quoting HP prices because they can just get the prices from the GSA site).

GroundWork is doing a very good job of spinning this so people report "HP don't want everyone to know they're expensive". And that's a nonsense story - anyone seriously considering buying HP is going to ask HP for a price, they don't need to find out from GroundWork! (And GroundWork can quote the prices from the GSA site anyway). But it pushes GroundWork's key marketing message - "we're cheaper than HP" - and gets them namechecks and sympathy on blogs - so congratulations to GroundWork for excellent marketing.

Re:They're just enforcing an NDA

[Yfrwlf]

GroundWork is doing a very good job of spinning this so people report "HP don't want everyone to know they're expensive".

But that may very well be the truth, nothing you've said is a lie. HP may very well have a much higher "list price" even if they don't usually end up selling at that price, though some businesses with lots of money I'm sure do buy it at that price allowing HP to rip them off. It's information that should be known any way and you shouldn't be able to violate the freedom of speech with NDAs.

It's corporate BS like this that makes life suck for everyone else. Competitive pricing is one thing businesses try to hide as much as possible so that they can backstab others. I'm glad it's being publicized, and I hope it gets HP to lower their list price so they won't be able to fuck over so many consumers and will have to start actually competing fairly. How could you stand up for fuck-you-over corporate tactics when this information should be free and they shouldn't be able to do that?

Re:They're just enforcing an NDA

[easyTree]

How could you stand up for fuck-you-over corporate tactics..

Isn't the 'fuck-you-over' redundant in the sense of 'wet water' ?

Re:They're just enforcing an NDA

[Headcase88]

"Anyone seriously considering buying HP is going to ask HP for a price, they don't need to find out from GroundWork"

... why should I waste my time getting prices from different competitors when I could get all the information from one source? Sounds like bullshit to me.

Imagine if you went to a grocery store, but none of the price tags were there. You had to ask someone at the cash register for the price of each product (and negotiate your way down). So a competing grocery store that doesn't force you into these negotiations lets you compare the list prices and... you know the rest. Worse yet, there are only 4 grocery store chains in the world, 3 chains have the no price tag practice, and the remaining one doesn't have the brand names and shiny colours that your children like. Talk about getting in the way of the free market.

The only difference here is that only corporations are buying the products, so it only affects the small % of the population that purchases\negotiates for them. Hence no public outrage. Also, instead of children, it's executives, but the shiny colours point stands.

Re:They're just enforcing an NDA

[MikeBabcock]

Of course, sending out their pricing under NDA with client-specific random differences in the pricing would allow them to know instantly which customer revealed the data.

Re:They're just enforcing an NDA

[msuarezalvarez]

So these developers that developed the software for free were somehow coerced into doing it, or did they do it fully willfully and while being aware of the possobility of their work being sold later? Maybe those developers even included a licence with their code that explicitely allows others to do precisely what GroundWork is doing... who knows.

Re:They're just enforcing an NDA

[compro01]

GroundWork is doing a very good job of spinning this so people report "HP don't want everyone to know they're expensive"

Why would they be using NDAs if the latter is not the case?

Re:They're just enforcing an NDA

[freddy_dreddy]

I don't believe they were fooled by the company in any way. I don't believe that Groundwork takes advantage of backdoors or fools the developers. What I do believe is that this whole story is BS: the "poor little open source company" is portrayed as a victim of a mad greedy multinational. It's the kind of stereotypical reaction you get whenever a /. post has the words "microsoft" or "open source" in it. It's been going on for a couple of months, BTW. As what appears to be the rule here lately, /. is bringing stuff like this as a breaking news story when it is in fact old and cold. The crowd spits out some clichees and moves on to the next "article". There's no depth, novelty, insight or interpretation in this post. Have a look around the internets and you'll see that the story is "somewhat different" than how it is presented here. HP isn't the aggressor.

Re:They're just enforcing an NDA

[Yfrwlf]

Do I think there's a difference between fair, upfront pricing, and what is basically a pricing scam here? Yes.

If HP wants to pretend their software is normally sold at 200% the actual cost it normally gets sold for, other companies should call them out on that. Those fake prices should be condemned along with the company behind them for doing it. Not to mention competition can't function without the ability for consumers to compare pricing.

Re:They're just enforcing an NDA

[Yfrwlf]

As typical of Slashdotters, I didn't actually RTFA, so I didn't even know it was about open source. The only part I read about was they were trying to keep prices secret, and that their prices were fake any way because they'd never actually sell at those prices, or rarely, and would sell for like 50% cheaper or something. Those were the points I was commenting on and nothing more, I don't care what kind of software they sell, I think it's good that their fake prices were attacked because it sounds like it was basically a pricing scam. Plus consumers need to be aware of pricing so that pricing competition can occur. So, I think it's good they were called out on that for the scam and any company doing that should be scorned. I don't care what company it is though, that's not right, I like HP sorta OK-ish though in some ways since they do support Linux, the platform I use, but I certainly don't agree with some of their business practices (like selling ink cartridges 1/3 full). I'm actually a bigger fan of Konica Minolta now for just that reason. They have refillable cartridges, and Linux support to some degree. :)

Re:They're just enforcing an NDA

[Quothz]

HP found out that one of their competitors (GroundWork) has HP's confidential documents. They shouldn't have those - somebody has obviously broken an NDA.

anyone seriously considering buying HP is going to ask HP for a price, they don't need to find out from GroundWork!

You're saying that the document is confidential but contains information available for the asking? And that an employee broke an NDA by giving out information that the company gives out freely? Nonsense; you're blithering. First, if HP freely gave out pricing information, they wouldn't claim it's confidential. Second, there's no obvious NDA violation; I say it's obvious that an HP rep left the pricing guide on the bus by mistake.

Do GroundWork have any other NDA'd documents that would allow them to unfairly compete against HP?

I strongly doubt that anyone at GroundWork has signed an NDA with Hewlett-Packard, so I suggest that they aren't bound by HP's confidentiality policies. There's no such thing as an "NDA'd document"; only NDAs and documents. And there's nothing unfair about using correct, factual information to market a product, if it wasn't obtained in a shady way.

(Oh and they also ask for the document to be returned and for GroundWork to stop using it; that doesn't stop GroundWork from quoting HP prices because they can just get the prices from the GSA site).

Fair enough. I give HP five points for requesting rather than demanding, but minus several dozen for claiming that they can restrict information based on their internal policies. ("Access to HP pricing information is limited to parties under confidentiality obligations to HP.") Another ten points off the board for the vaguely threatening-sounding closure to the letter.

GroundWork is doing a very good job of spinning this so people report "HP don't want everyone to know they're expensive". And that's a nonsense story - (And GroundWork can quote the prices from the GSA site anyway). But it pushes GroundWork's key marketing message - "we're cheaper than HP" - and gets them namechecks and sympathy on blogs - so congratulations to GroundWork for excellent marketing.

Funnily enough, you overlooked the fact that it was HP who copied InformationWeek on the letter, for reasons which no doubt are sensible and logical. From here, tho', Jim Haselmaier looks like a gibbering idiot for doing so. This story, and any resultant blog sympathy, appears to be entirely HP's work. As far as I can see, GroundWork hasn't reacted publicly in any way, to HP's letter.

Re:They're just enforcing an NDA

[easyTree]

Totally. I'm just saying that 'fuck-you-over' is almost synonymous wih 'corporate'.

Re:They're just enforcing an NDA

[msuarezalvarez]

I am sorry, but the content of what you wrote, specifically

Which is off course much worse than selling software other people wrote for free and competing with companies that pay their programmers.

is either simply trollish or shows your complete misunderstanding of what F/OSS is and what F/OSS developers fo, independently of what you believe the story to be. The standard "slashdot is nothing but F/OSS groupthink blah blah balh" line does in no way change that.

If you cannot find huge, significant nuances in the "slashdot crowd" and its ideology, that only tells something about you.

Re:They're just enforcing an NDA

[freddy_dreddy]

Here's a challenge for you: find me one post in the history of slashdot truly in favour of MS or in disrespect of LNX which has a score 4 or above - and I'm not talking about (funny) and the likes.

Re:They're just enforcing an NDA

[WebMistress]

I work at GroundWork. We did not sign an NDA to get this document.

Re:They're just enforcing an NDA

[Yfrwlf]

Sorry, I wasn't completely sure what you meant the first time, and yeah that's true. ^^

545% higher, not 82%

[Paradise Pete]

but which doesn't question the veracity of the pricing (which, not surprisingly, is 82 percent higher than the open-source vendor's

HP's pricing is 545% higher. That's some fine arithmetic there, Lou.

Price isn't the whole thing

[Atrox666]

They do give different deals to different people. Price isn't too important in their market position. The main reason that Open Source Vendors have trouble competing is that if I hire HP for a solution and it sucks then HP screwed the company and you switch vendors. If I hire some Open Source vendor and they suck then I get fired for not having gone with HP or IBM or Microsoft.

shouldn't pricing be public info?

[DragonTHC]

doesn't the FTC have clear rules on pricing schemes? Seems like it could be a bait and switch.

Re:shouldn't pricing be public info?

[mysidia]

doesn't the FTC have clear rules on pricing schemes? Seems like it could be a bait and switch.

Bait and switch occurs when a vendor advertises a product at a low (unprofitable price.

Whenever a customer inquires, or places an order, intending to buy, it is revealed that the item is no longer available, or out of stock, so they CANNOT buy it, but there is an alternative (more expensive) substitute available.

i.e. This occurs when a retailer advertises a huge sale on a product just to get people to come to the store, but they take the for-sale product off their shelves (lock it away in storage), and only leave one unit in the store, so the item cannot actually be purchased at sales price.

HP is not advertising to sell a product that is not available to be purchased, so it is not a bait and switch.

It is also not bait and switch because HP does not advertise a price (they are not holding a sale).

I picture a world / asteroid where..

[easyTree]

All the lawyers, marketeers and traffic wardens could live in 'harmony'.. then the rest of us can get on with doing other things..

Mmmm.. *warm fuzzy feeling often exerienced during waking*

Re:A Marine's Tale

[easyTree]

Join the Core - see the world..

Same case for CAD/CAM/CAE software

[johnny cashed]

Just try to get a price on the higher end CAD/CAM/CAE software with out talking to a vendor or some other middleman. I can't stand the way the prices are secret. It is like they give different prices to different customers. Just tell me what it costs to buy. If there is volume discounts (for more seats) fine, publish that as well.

Re:Same case for CAD/CAM/CAE software

[easyTree]

Q> How much is it?

A> How much have you got?

Re:They're just enforcing an NDA... Bluffing..

[FirstOne]

"HP found out that one of their competitors (GroundWork) has HP's confidential documents. They shouldn't have those - somebody has obviously broken an NDA. "

NDA's are unenforceable, (have no legal standing), once the information can be obtained by legal means.. I.E. HP's official pricing disclosure to the GSA in order to secure government business, (required by law).

After that occurs, HP has no case and no standing to sue anybody for using that information.

Re:Sour grapes much?

[MikeBabcock]

Nobody outside retail reveals pricing. Pricing is almost always secret, from first class flights for executives to building materials to software.

Ever noticed that websites have "call for quote" instead of a price on enterprise goods? They want their sales people involved and they want to quote you a price based on your size and volume.

This is not Walmart marketing, this is very low volume sales in comparison.

Good work HP!

[infalliable]

Good work there HP! You just made 10s of thousands of people aware of this upstart that offers product at a reduced price with a bogus complaint.

Re: Corporate paranoia

[macraig]

How dare you suggest the possibility of corporate paranoia in the upper echelons of HP! Such a thing could never happen! Hell would freeze over first.

Damn, where's that chilly draft coming from...?

Re:They're just enforcing an NDA... Bluffing..

[cdrguru]

Huh? GSA pricing is public information. GSA prices are only available to state & federal government entities.

For everyone else, HP gets to set "other" prices and these certainly are trade secret. And protected by NDA, I am sure. Clearly they are going to sue and find the leaker. This information is protected for a reason.

Idiocy here

[cdrguru]

I can't believe the comments here.

The basic reason that companies do not want to release pricing on B2B sales not just that they charge different prices to different customers. If you are an idiot and shopping for a large server you might look at web sites for pricing and choose solely based on price. You would be demonstrating to everyone that you are an idiot, but some companies do indeed employ idiots.

So you discover that the server with 1024 processors and 12 terabytes of RAM from an unknown company in Taiwan that is a reseller for a company in China has the lowest price. Quality isn't going to enter your mind - you are going to present your boss with an unbeatable deal based on price. And your expertise in selecting systems that will work. Of course your boss will love you for your low-price choice. For maybe a month.

So how do you compare large scale server systems from IBM, Dell, HP and others? Well, maybe the most important attribute isn't price. Perhaps price is so utterly unimportant for a mission-critical system that it is just a distraction. So disclosing price doesn't help anyone in reality - it helps anal bean counters and idiots that buy stuff based on price rather than features, quality and support.

And anyone that confuses GSA pricing with the prices that are quoted to non-government entities is in for a surprise. No, you don't get GSA pricing unless you are government. Sometimes you get better, sometimes worse prices. Sometimes government folks buy open market instead of GSA because they can get better deals than GSA based on things GSA doesn't take into account, like quantity discounting.

Re:A Marine's Tale

[easyTree]

True. Thanks :)

Re:Sour grapes much?

[fmoliveira]

I never buy anything announced with an "ask us" price tag. Unless there isn't an alternative with a more clear pricing. I found that usually, when the price is hidden, it's a bad price.

Re:Huge P...

[__aasqbs9791]

Because of, I think.

hp stung by HD manufacturer

[ArhcAngel]

I was working for Compaq during their merger and one thing that came to light during that time was that one of the HD suppliers was charging hp more (about $0.80 more if memory serves) for the same drives they sold Compaq. Not a lot for one device but in bulk it's huge. I heard there were some pretty heated "discussions" with the vendor shortly thereafter. This is why manufacturers do not like having their pricing known.

Re:hp stung by HD manufacturer

[icsx]

Indeed. With selective pricing they can get more money from another and sell cheaper to a more larger volumy buyer (or just make them pay more if they dont know how to demand..)

Re:Sour grapes much?

[mysidia]

Yeah, and I have a general rule: for software products, If they won't publish a price, don't think about buying them. There's no market price to help judge them by.

And it's best to buy software that will be well-supported with a well-published pricing scheme, so the cost of future upgrades can more or less be relied upon.

You get a quote for a price on an upgrade. 6 months later it could be 200% higher.... nothing published in writing on the website, means a lot more uncertainty.

Why? If they don't have the courage to so much publish their price, it must mean that their pricing is completely unreasonable, and they have absolutely no intention of providing a fair shake. I.E. The vendor is terribly arrogant, and think they're beyond letting their prospective customers know how much it will cost well in advance!

There are plenty of Enterprise IT product manufacturers/vendors that do publish their pricing, that you can avoid buying from anyone demanding you take the extra step of getting a quote and wasting time with salespeople, who will always try to make it sound 100x better than it is, without bothering mentioning things like weaknesses of the product.

If the software serves a real business need there are numerous competitors, 90% of the time, and the best ones will in general show their price.

And by the way, for most products, HP does show pricing, or at least their resellers do for most products.

HP wants to manage the comparison/evaluation

[kenh]

It seems pretty reasonable, really - HP wants folks to compare on features, not price, since HP has a big infrastructure to support, and their competitor doesn't. Their competitor, of course, wants to focus on their greatest strength, price. For as long as I've been working in IT, it has been common for pricellists to be marked "Confidential", and I tend to think HP has the right to keep their confidential documents confidential.

I once worked at a large grocery chain, and while competiton is great, when an employee at a competitor tried to "offer" our management a peek at their upcoming weekly specials, my employer's reaction was swift and absolute - not only was there no interest, they called the police and started an investigation, working with their competitor to identify the wanna-be industrial spy.

The corporate price list is meaningless, it is the quoted price that comes at the end of an offer that matters, which could be way below the "list price," due to end-of month/quarter/year sales quotas. The other folks should work to compete on features - that's how you win.

IANABCS

[Douglas Goodall]

It is common practice to offer discounted pricing to customers that have bought a lot previously. Sales software often displays customer's previous pricing so the salesman knows what to ask for. Price is often what the market will bare. This is why salesman issue quotations good for a month. They contain adjusted pricing they will honor for a short period of time. Then there are pricing schemes that adjust if you buy something else, like Intel selling you eproms cheap if you also buy your ram from them. These practices are often illegal, but rampant anyway. Salesman have a range for each product and get the most they can, often giving away promotions to buyers willing to pay higher prices. I hate the sales game, which is why I do something else. Of course the money is there.