Atlantic Computers

Objective: To determine the pricing strategy for the bundle TRONN server and PESA software.
Sno
1

Pricing Route
Status Quo (Charging
only for Hardware and
give PESA for free)

Price for tronn server

Price of zink

References

Exhibit 3,Page 9

Competition based
pricing
Exhibit 3,Page 10

Cost plus price approach

Expected sales of Tronn
servers

Exhibit1, page 7
Footnote5, page6

Expected number of
PESA installations
Cost of Tronn server
3

Exhibit 3,Page9

Cost of PESA per

installation

Exhibit1, page 7
Footnote5, page6

Total cost of the Bundle

Exhibit1, page 7
Footnote5, page6

Final Price of one server

Final price for 2 servers

Value in use pricing- Conservative Pricing

Price of servers

Electricity costs
Software licences
Labor charges
Total cost
Total savings

Exhibit3, Page9

Savings to customers

Footnote5,Page 6

Final cost of the bundle(2

servers)

Strategy
Strategy 1
Strategy 2
Strategy 3

Price

Strategy 4

TRONN
1.2

Price of Tronn

1
0.8
0.6
0.4
0.2
0
Strategy 1

Strategy 2

Strategy 3

Different strategies

Strategy 4

Assumptions
Conservative pricing considering 1
TRONN=2 ZINK
Conservative pricing considering 1
TRONN=2 ZINK
Aggressive pricing considering 1
TRONN=4 ZINK

Considering the basic segment

=4%*50000+9%*70000+14%*92000
Assuming 50% attach rate

R&D costs/No of units sold that

were loaded with PESA since it is
assumed that the s/w dev costs will
be paid off over three years

=CP+Mark up value(30%)

Assuming 1 Tronn servers=2 Zink

servers

Assuming 50-50 sharing of the

savings

TRONN

Breakeven Analysis
Cost per server
R & D for PESA

Exhibit 3,Page9

option
option 1
option 2
option 3
option 4

Price

profit

Breakeven(units)

Breakeven(units)
1

No. of units

1
1
1
0
0
0
option 1

option 2

option 3

Different strategies

option 4

Breakeven by(year)

n(units)

Breakeven(units)

option 4