What does dbt-Cloud price increase mean?
Introduction
Companies change pricing all the time, and rightly so they should. Research shows that businesses that change pricing every quarter typically outperform their peers. When your price has been constant for a long time, changing pricing is one of the toughest executive decisions to take. Whenever price changes happen, there will always be folks who are going to be unhappy about this — but for me if more than 25% of the user base is unhappy, then we have a problem.
But almost always price increases should be complimented by an increase in value provided by the product.
Backdrop
Macro-economically, late stage startups have too high valuations not supported by their revenues. dbt-labs is a prime example of that. dbt-labs is the team behind the blockbuster dbt SQL framework, which is free and does not earn revenue. They are valued at $4.2bn+. Based on average public market multiples of 8x, they should make about $500M in Annual Recurring Revenue (ARR) to support that valuation. Their biggest blockbuster product, dbt-core is free, so that means another $500M ARR has to come from somewhere, i.e., enter dbt-Cloud. It's their only revenue generating vehicle and next is the semantic layer (whose need / use has skeptics flying all over the world).
Now dbt-cloud, has plenty of noticeable performance and usability issues along with a low coverage of features to be useful for day-to-day analytics. It has been behind on innovating barring a few cosmetic UI changes over the last few years. It just lacks features and finesse.
They increased the price of dbt-Cloud by 100% on 15-Dec-2022 on non-enterprise pricing tiers to push users upmarket or extract more revenue from existing users. The product has not materially changed or is necessarily providing more value but the price is going up. One of our customers, an SVP of Data in cyber-security once said to us that:
The price-value curve for dbt-cloud is completely broken.
And this price increase goes to reflect that tension even further. Price-increase without meaningful product improvement happens when a team struggles to activate and engage users to pay. Then companies take their users/community hostage and then force them down the upgrade path.
This is EXACTLY how old school IT companies from the 80s and 90s used to shaft customers. Tease people in on discounts, lock them in and then steamroll them with price increases.
On the other hand, Notion, Atlassian, Figma, etc. build features, add value, and increase price without complaints. Their product always complements their price increase providing more value.
What is the dbt-cloud price change?
In summary:
- If you are on the free tier, you can have one project with data hosted in the US for one developer seat. If you are in the EU, a lone analytics engineer or consultant, you will no longer be GDPR compliant using the free version.
- If you are on the team tier, your price per seat will double to $100/seat/month. So for a 2 people team, you will be now paying $2400/year, where you were paying $1200/year before. You will now have to either reduce seats, reduce head count, or face that uncomfortable situation of asking your finance team for more budget. You also can’t have more than 1 project. Also, if you are on team tier with more than 8 seats, you get forced into Enterprise tier for no reason and your budget just goes out of whack.
- If you are on Enterprise, you are protected for now, but you will already be over-paying around $400/seat/month (for 10 seats minimum) + Professional Services for just a cloud IDE, and a scheduler.
So if you are a small to medium team, you are now faced with an existential crisis — either you cough up a significantly large sum of money or risk, not being able to reach your analytics goals next year and fail to generate RoI for your business.
What can you do now?
It’s not all misery, and there are some alternatives:
- You can cut down your dbt-cloud seats and move people to VSCode (Cost: $100k+/yr). You will need to either hire a data engineer to support the local setup and your analysts will have a much harder time adapting. You might hire a consultancy to do so as well. dbt would be free, but hiring either people or consultancies will cost you both time and money.
- You can increase your budget (Risk: no budget). It would mean negotiating with procurement and senior execs and that can get especially tricky if you have already gotten budget approval.
- Migrate to Paradime (Up to 70% cheaper). Paradime is the single operating system for analytics that scales from 1 to hundreds of users without being forced into pricing tiers. You can reduce your budget and migrate from dbt-cloud in a single click. Out of the box, you can query SQL, build dbt models, check lineage across dbt and Looker / Tableau, run production jobs, and more. Onboarding takes less than 30mins. Here is an example of cost comparison:
Can we help?
If you think Paradime can help you achieve your analytics goals without breaking the bank, especially in these tough times, we are here for you. If you want to see a full feature comparison with dbt-Cloud, you can find it here:
https://docs.google.com/spreadsheets/d/1v1tHV17lSkcvU6Rped_61lMV7x0oVeIWCWw8hlXd-oQ/edit?usp=sharing
If you want to check Paradime out, but don’t have time — DM me on LinkedIn and we can share with you some small demos for you to play with. If you want to migrate, we can do it anytime of the day within 30 minutes. Also if you upvote us on Product Hunt, you can get a nifty discount code before Jan-2023.
