Cost Attribution and Charging Models Mark Tysom Product Manager

– Changes to funding expected No confirmation as yet – c.2015 funding profile likely to change May fund core network and some services Other services will need to be financially self-sustaining – Less funding will be top sliced from institutions Giving customers more choice of how they spend it Will want some services, but not others Need to unbundle existing services and price them Background (mainly speculative)

Service pricing principles JANET Price Point 1.Charges cover operational and development costs 2.Articulate the value to customers 1.Remain competitive with the open market

Service portfolio model

Some certainties – Less central funding for us and our customers – Need to unbundle services – Need to offer product packages – Need to price these in accordance with pricing principles – Need to do this asap!

JCS free since 2005 – c. 750 organisations to date High demand – 28,000 issued over 5 years – 9-12k over next 3 years Market intelligence – 78% prepared to pay Charging to be introduced – Customers notified 1 Nov 2012 – Charges to begin 1 May 2013 Introducing charges: Janet Certificate Service

1.Do nothing 2.Charge per certificate 3.Annual subscription fee 4.Sell in bundles Each of the above have a number of advantages and disadvantages… Charging options: 4 options identified

Pros – No reduction in demand – Encourages best practice Cons – Generates no income – Reduces perceived value Do nothing

Pros – Simple to administer – Simple to understand Cons – Discriminates against low users Annual subscription

Pros – Generates income – Customers pay for what they use Cons – Significant admin burden on customers and Janet – Doesn’t offer discount to heavy users Charge per certificate

Pros – Customers pay for what they use – Rewards heavy users with discounts – Simpler to administer than per certificate option Cons – Significant development to online portal required Sell in bundles

Preferred option: certificate bundles

First free service to move to a charged model – Consultation with wider Jisc – Exec level sign-off required – Very careful customer messaging – Tariffs announced on 1 st November 2012 – Grace period of 6 months to obtain free certificates – Changes made to portal Customer response – Better than expected – General “acceptance” – Admin burden for collegiate universities Decision announced to customers

11/12/12 TERENA announces telephone callback for OV certificates will start on 01/02/13 – And recommends DV certificates are used instead Publicised tariffs were derived from OV business model – DV less value than OV certificates – DV certificates undermine business model – Need to introduce an additional tariff – Further changes to portal required (£ € $) – Expect most customers to choose cheapest option (DV) – Could result in 50% reduction in expected revenue But…

Revised tariff

Janet, Lumen House Library Avenue, Harwell Oxford Didcot, Oxfordshire t: +44 (0) f: +44 (0) e: Questions..?