Commercial Off The Shelf (COTS) software is a term used to describe software that has already been made and is now being sold to the masses as a pre-packaged product. Microsoft Office or Quickbooks are examples of COTS software. Those companies made the product specific enough to solve a common business problem, but generic enough to apply to the masses. As long as you need to create a document or manage your finances, those products are fine. Unfortunately, they aren’t necessarily optimized for your industry, business, opportunities, or processes.
The wider the audience that uses the product, the less expensive it is per user. Microsoft Office is used by a lot of people so it’s relatively cheap at $50-60 per year. But a more specialized COTS tool, like IBM Cognos, (a high-end product used by large enterprises) starts at about $250,000 + 20% extra per year for support and upgrades. Clearly, prices can range dramatically based on the product, even if it’s a COTS product.
When choosing a COTS product, it’s relatively easy to determine your expected cost, since pricing is pretty transparent and publicly available. A quick Google search is typically all it takes to find the price of a product like this. The fact is, these products are commodities, and you may even be able to find them sold through multiple vendors, each offering different prices.
For more specialized COTS products, you’ll need to reach out to a salesperson to get pricing. In this case, pricing is typically by “the seat,” meaning per user. The more users you have, the higher your total cost. For example, if you need MS Office for 1,000 users, your total price will be equal to 1,000 seats multiplied by $X per seat.
How to price COTS software
Finding pricing for COTS software is fairly straightforward. To price COTS products on your own:
- Google it. You will probably find the price right on the software vendor’s website, or on a reseller’s website. You’ll likely be able to buy it online, download it, and use it immediately. If that doesn’t work, try step 2.
- Go to the vendor’s website and either call them or submit the “Contact Us” form. Be prepared to get a call from the salesperson!
A COTS software package can be an excellent choice for your software needs. Even the pricier versions are typically more economical than custom software created specifically for your business. At the very least, COTS products offer an excellent starting point to solving your business problems with a software solution.