Is That Price Really Right?

Zilliant Inc., maker of price-optimization software, plans to release this month an upgrade of its software, a version designed to help companies evaluate how much a buyer will pay for products or services.

Zilliant's Pro 4 adds to algorithms used in previous versions to create more-accurate price recommendations. It also now has the ability to collect pricing supply-chain data from across whole companies rather than those used in individual departments. And it uses XML standards to pass along price changes down the supply chain.

Manugistics Group Inc. and Rapt Inc. compete with Zilliant in the market. Airlines have been using price-optimization software since the '80s with some success. (This is why elbow-to-elbow passengers can each pay very different fares.) But the software, with its ability to figure many changing factors, is still innovative to other industries.

Most businesses are setting prices in a somewhat static fashion using spreadsheets and Visual Basic, says Kevin Scott, a senior analyst with AMR Research. Now, as the economy just bumps along, is an opportune time for companies to make the switch, Scott says. "Few companies are making use of these optimization and revenue-management applications." But, he adds, that could be a good thing for early adopters. "There are so few users, you can gain an advantage over competitors."

Pro 4 ranges from $100,000 to $350,000, depending on the size of the business and the number of modules used.