Pricing & packaging is one of the hardest parts of a company’s business model to sustain. Let’s look at how Snowflake does it.
Packaging
Snowflake has 4 editions: Standard, Enterprise, Business Critical, and Virtual Private Snowflake
To make your packaging work at different price points, always make sure that the features are different enough in each box to make it clear what a customer should buy/value. Let’s take Standard vs. Enterprise:
Clearly, customers are supposed to upgrade to Enterprise if the need multiple clusters, more time to triage data history, and an annual rekey of all encrypted data.
A typical rule of thumb in packaging is to put 3-4 silver bullet features in the next edition up that customers really value.
Pro tip: Don’t build editions based on capacity. This is called “pizza boxing.” When you pre-suppose what capacity customers should buy it leads to strange behaviors. Let’s say a pizza has 8 slices to a pie and each family member eats 2 pieces. But there are 5 family members. Now you need to buy 2 pies (16 slices but the family will only eat 10). Therefore the family will negotiate the price down of the second pie because they don’t value it as much. This hurts your pricing long term!
The Lemonade Problem 