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SaaS Needs a Single Point of Purchase

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Re: SaaS Needs a Single Point of Purchase

#31

Post by alangibson »

shireboy wrote: post #17

Depending on how it’s implemented I could see this being a very good thing. My public sector clients esp. have a hard time buying any Saas as each one involves finding vendors, getting it approved, setting up payment, etc etc etc. obv they have a whole procurement department for that, but I could see their job being easier if all their aws, azure, and smaller saas came on one bill. The organization would still need t…

> My public sector clients esp. have a hard time buying any Saas

Indeed. It's probably even harder for then than it was for us.

> Balancing buyer and seller interests while trying to get a cut.

This is what made me jump to the idea of a non-profit consortium set up by SaaS vendors with a mandate to grow the market by reducing friction in purchasing

Re: SaaS Needs a Single Point of Purchase

#32

Post by Jugurtha »

alangibson wrote: post #30
Jugurtha wrote: post #3

This is a pretty established distribution model often called "bottom up" approach, and it's particularly relevant to enterprise sales where you allow the users to start using the software without friction [something that was proper to "consumer" applications] and then allow management to pay for that software, or users to pull their corporate credit card and buy what their budget allows. One turn-off for us for machi…

My main point is that this bottom up approach doesn't work as well as it could simply because of the difficulty of navigating purchasing processes. I know my team would have bought easily 5x what we did if we didn't have to invest 4 to 6 months in getting a vendor set up for each SaaS we wanted. It just wasn't worth the hassle.

>My main point is that this bottom up approach doesn't work as well as it could simply because of the difficulty of navigating purchasing processes.

I may have been unclear. The "bottom up" approach is precisely designed to circumvent and solve the case where the user is not necessarily the buyer. It emerged to solve the "shrink-wrap software", or when you did not have an army of salespeople.

One way to look at it is "bringing SaaS to enterprise", which was typically the distribution model for consumer applications.

Re: SaaS Needs a Single Point of Purchase

#33

Post by alangibson »

mcs_ wrote: post #22

One of the issues of making all the services together is the discount. Implement a discount system across multiple SaaS has to do with sales strategy. Standardize everything, including the costs, seems like the end of creativity. However, creating a massive checklist that makes the user choose between services and, step by step, simulate final costs (which will include computation, task management, monitoring, custom…

I don't think discounting bundles really needs to even be included in this. Just having one payment processor counterparty is already a huge win.

Re: SaaS Needs a Single Point of Purchase

#34

Post by darrmit »

The biggest obstacle to this is not necessarily technology, but the vastly different ways SaaS companies opt to go to market via reseller channels - or don't. Google and Microsoft have both had established reseller channels for a long time, but there are still major vendors who only recently (or still haven't..) established this.

Slack is a great example - they only sell direct. And companies who use Slack have a tendency to "sprawl" into other SaaS apps that may not have a reseller channel, creating a bit of a snowball effect. Contrast this with companies "bought in" to Microsoft where it's much more common to see them adopt Microsoft Teams and other technologies to avoid that sprawl - and they typically buy via Microsoft partners who can bill them on a single invoice.

While we can't force SaaS vendors to acknowledge that customers want a single bill/distributor, we are working on the problem further upstream by creating a marketplace [1] backed by a network of connectivity agents who are expanding into the SaaS world. One point of purchase/bill for connectivity + SaaS (and IaaS) with additional benefits such as management, etc. Even more interestingly, we're covering the developer, distributor, reseller, and customer channels on a single platform.

[1] https://www.appsmart.com

Re: SaaS Needs a Single Point of Purchase

#36

Post by alangibson »

gtardini wrote: post #5

Y-Combinator backed company which does something along the lines of what you describe: https://onetool.co/home/

I'm very skeptical this would work as a for-profit business, especially a VC backed one, because their will always be pressure to take a bigger and bigger piece of the revenue.

Interesting that their social proof lists a bunch of silicon valley companies that are probably about the least likely to have the issues I described.

Re: SaaS Needs a Single Point of Purchase

#37

Post by andrenotgiant »

alangibson wrote: post #30
Jugurtha wrote: post #3

This is a pretty established distribution model often called "bottom up" approach, and it's particularly relevant to enterprise sales where you allow the users to start using the software without friction [something that was proper to "consumer" applications] and then allow management to pay for that software, or users to pull their corporate credit card and buy what their budget allows. One turn-off for us for machi…

My main point is that this bottom up approach doesn't work as well as it could simply because of the difficulty of navigating purchasing processes. I know my team would have bought easily 5x what we did if we didn't have to invest 4 to 6 months in getting a vendor set up for each SaaS we wanted. It just wasn't worth the hassle.

Not to say this would have worked at your company, and not to say it's perfect, but I think the "HACK" of the bottom-up approach for software like JIRA or others is that it is priced in a way where you can get your team at a company using it and showing demonstrable value from using it on a free or very low-cost (AKA your personal credit card) tier.

Then, when you go to make it official, you have much more power in the negotiation.

If it's working well, making the "shadow IT" SaaS tool an official purchase typically goes:

Team Lead: Everyone is using this tool, we're about to go above the free tier and need to purchase it.

IT/Finance: You should have gone through the process, you need to fill out these forms.

VP/CEO (to IT/Finance, seeing value of tool): Just get it done

Re: SaaS Needs a Single Point of Purchase

#38

Post by alangibson »

amadeuspagel wrote: post #8

This could also enable bundling. For example you could have a startup bundle that includes anything from cloudflare's pro plan to tools for email marketing.

Sure. Once you solve the fundamental purchasing problem, you have all kinds of options up to an including building a sort of hodge podge AWS.

Re: SaaS Needs a Single Point of Purchase

#39

Post by dagw »

dannyw wrote: post #25

I feel like the main problem here is an overly bureaucratic and suffocating organization. Say what you want about change being slow, but more nimble competitors will eventually eat their lunch. So don't be the the subject of this story.

"Overly bureaucratic and suffocating organizations" will always find someone who wants their money. A place I used to work was happy to pay SaaS company A 4 times more than SaaS company B was charging for exactly the same service, purely because company A could send quarterly invoices and B couldn't.

"Overly bureaucratic and suffocating organizations" might be a pain to deal with, but they are also fairly price insensitive once they've decided that they want to buy your service, assuming you make it easy for them to give you their money.

Re: SaaS Needs a Single Point of Purchase

#40

Post by grenoire »

An addition to all the comments in this thread, from a finance point of view, consolidating the tax treatment of multiple resold items would be nightmarish if you want to launch this service internationally. Additionally, the mismatch of billing structures would lead to the hypothetical reseller either keeping margins (big turn-off for onboarding I bet) or keeping wildly volatile short-term liabilities on their balance.

It just seems like the author is looking for a band-aid instead of the real problem; a heavily bureaucratic procurement system in their company.

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