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SaaS Needs a Single Point of Purchase

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Re: SaaS Needs a Single Point of Purchase

#51

Post by grenoire »

alangibson wrote: post #45
grenoire wrote: post #40

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 balan…

It's not my company, it's every large company I've ever worked for. I'm not looking for a band aid. I'm looking for a solution that helps the SaaS industry without demanding that the Fortune 500 get their act together, because they ain't changing for our benefit any time soon. Can you expand on > Additionally, the mismatch of billing structures would lead to the hypothetical reseller either keeping margins (big turn-…

That's a shame, but it seems like it's enabling resellers to charge 25% margins. I don't see those margins being competed out.

Imagine you have services that the end-customer has subscribed for. Some of them are billed weekly, some monthly. Some of the monthly ones are billed the middle of the month based on usage, and some at the week following the month's end based on a mix of monthly subscription and overage.

When a specific invoice that has the potential to vary greatly from period-to-period, you might encounter cases where you have to pay for an invoice that was twice the amount of last month, but you will only be billing your end-customer 20+ days from now! This means that you have to either foot the bill, or wait a little bit and keep the amount in your balance sheet.

When you scale up, you are essentially providing a financing product. You can counter this by asking the users to deposit an amount equaling the base subscription or other service fee, but you can still run into cases where you might simply be cash-strapped to pay your clients' bills; this would put the hypothetical reseller into essentially what's a bank run. Not fun.

Re: SaaS Needs a Single Point of Purchase

#52

Post by alangibson »

dvlx wrote: post #44

Cannot agree with this more. My team was able to deploy a highly sophisticated technology stack in less than 12 months that could add up to about 50 years of procurement (based on past experience acquiring software for large enterprises). There are 20x more disparate solutions/components, but it all rolls up to a single AWS Bill. This approach has given us remarkable agility and easily outperform traditional vendor p…

That's about right. I was working on a an AWS project a while ago while a colleague was working on a procurement project. What's when I had the realization that 1) AWS services are nothing special 2) there are usually superior SaaS options for each service 3) therefore the primary value I got out of AWS was the fact that I wasn't pulling my hair out like my colleague

Re: SaaS Needs a Single Point of Purchase

#53

Post by grenoire »

dagw wrote: post #49
grenoire wrote: post #40

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 balan…

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. Sure, but as someone who works at that sort of company, we happily give lots of real money to companies that solve that problem for us. As recently as a few month ago I wanted to spend 1-3 thousand dollars pr year on a SaaS product. The problem internally was never exactly h…

I bet they were rational, but somehow I can't imagine the lifetime value of you as their customer would overcome bending a little bit to suit your procurement needs.

Odd.

Re: SaaS Needs a Single Point of Purchase

#54

Post by Jugurtha »

alangibson wrote: post #46
andrenotgiant wrote: post #37

Earlier quoted context omitted.

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 t…

I think maybe I wasnt clear. No one tried to keep us from licensing anything. Pretty much any solution was fine with then assuming it wasn't a security nightmare. > Just get it done Getting it done is a process heavy, minimum 4 month process because of purchasing rules. That's the problem I'm calling out.

>I think maybe I wasnt clear. No one tried to keep us from licensing anything.

No need for someone to do that. The process and distribution method kept you from that.

Re: SaaS Needs a Single Point of Purchase

#55

Post by alangibson »

dagw wrote: post #39
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 insen…

Absolutely correct. If you are trying to sell to a Big Co, price should probably be about the 10th thing on your list to talk about.

Re: SaaS Needs a Single Point of Purchase

#56

Post by alangibson »

chrismeller wrote: post #4

He complains about the reseller and their incompetence, but (incompetence aside) this is basically what he's looking for? I know it's one of those things that tends to change over time, particularly if your account rep changes, but wouldn't simply finding a reseller that doesn't suck be the answer here? Perhaps one that lets you automate quotes and purchases...

Nope. Resellers are very hands on and high touch. I'm talking about something more like a pass-through payment processor than a reseller.

Quotes in this case are as trivial as a PDF generator that just inserts the fixed price into a commercial offer template. As it stands, you wouldn't believe how hard it is to pry something like that out of a typical SaaS vendor.

Re: SaaS Needs a Single Point of Purchase

#57

Post by jariel »

alangibson wrote: post #42
jariel wrote: post #20

'Putting things on corporate card as a no-no' is definitely a rule they should get over and literally have the CFO or Controller use a card for such purposes, that's entirely feasible and rational.

The companies I'm taking about have 10K+ employees around the globe. The CFO would to nothing but type in the credit card number all day.

Why would employees be buying services individually? With 10K employees there would be a site licence.

Re: SaaS Needs a Single Point of Purchase

#58

Post by alangibson »

lifeisstillgood wrote: post #41

Nice idea - but ... His argument is "I could buy any SaaS service I liked by simply clicking 'Subscribe to Foo-SaaS for 99 / mth' on my AWS dashboard." This is true - it would solve his needs immediately and would yes lead to thousands of sales. For about a week. Then every purchasing dept in the Fortune 500 would collectively spray their coffee over their monitors, and suddenly one of two things would happen a) AWS…

I half disagree. I'm not trying to avoid financial controls or any of that. What most people that don't do this stuff don't realize is that just working the process to i.e. create vendors in your ERP are incredibly time consuming. This is even if you have full support of the business. We always had 100% support from everyone and it was still a nightmare.

Re: SaaS Needs a Single Point of Purchase

#60

Post by c17r »

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

I worked fulltime at my state college while I was also a fulltime student there. The amount of process to do anything was staggering. Buying something like a replacement hard drive required "quotes" from three different vendors (I printed pricing from 3 different websites). Forget about trying to buy 5 or 6 figure server equipment.

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

You're essentially floating them a short term loan. You pay the provider immediately with your credit card and then sending the buyer a PO. Give procurement a portal to see the bills as they are from the sellers and your PO has an added line item charge (flat fee or preferably a percentage of original bill) for the service.

Depending on risk level of the institution, could probably require an upfront deposit to make sure you don't get burned.

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