It's even more lopsided. AWS is a short term lending institution, it isn't pay up front.
SaaS Needs a Single Point of Purchase
81–90 of 172 posts
Re: SaaS Needs a Single Point of Purchase
#82Earlier quoted context omitted.
A 10K employee company will use a finite number SaaS services, they should absolutely be well equipped for their financial staff to 'pay' for stuff, including software, using a variety of means, including credit cards, it's what they do all day, this is not a new concept and neither is the scale of it. They buy toilet paper, cleaning fluids, pens, envelopes that way. A team of '10' needs 10 licences, they have their…
They buy toilet paper, cleaning fluids, pens, envelopes that way. I can assure you they do not (at least not in any company I have worked). They have pre-approved suppliers for all those things that are well integrated into our invoicing system. Adding a new supplier to that list is a major process. If I need a new one off hard drive I can either either ask IT to order it from the one approved computer component comp…
Yes, of course many things are purchased through contracts.
And many things are not.
Every company buys stuff from Staples/Costco/Wallmart, one-off parts and supplies.
The article mentioned having a 3rd party for the billing, indicating probably some kind of larger purchase, it's odd. Commercial Banking usually provide Amex/Visa linked accounts with limits, for a variety of things, it's not a new idea.
Re: SaaS Needs a Single Point of Purchase
#83Sounds more like certain purchasing departments need to modernize, not the other way around. IMHO.
Not being able to use the right tools for the job, because some bean counters don't like complexity, is silly and shortsighted.
Re: SaaS Needs a Single Point of Purchase
#84Sounds more like certain purchasing departments need to modernize, not the other way around. IMHO. Not being able to use the right tools for the job, because some bean counters don't like complexity, is silly and shortsighted.
Yeah, telling your customers that they should modernize is a great way to let someone else sell to them.
Re: SaaS Needs a Single Point of Purchase
#85Sounds like he's asking for a new PaaS (Procurement as a Service).
Re: SaaS Needs a Single Point of Purchase
#86Oh come on! Big companies! and Atlassian! Being hard to do business with is so 1980s.
FWIW, Stripe.com supports ACH (Automated Clearing House electronic funds transfer in the US) as well as payment cards. So a SaaS can take that kind of payment too, without lots of hassle. I haven't investigated Stripe's worthy competitors' ACH offerings, but they surely have them too.
And, big company purchasing departments can definitely get their hands on suitable payment cards for this purpose. They can guard them closely, and don't have to hand them out to random people.
This problem can be solved. (Well, it might take a decade or two...)
Re: SaaS Needs a Single Point of Purchase
#87You can't do a traditional quote, PO, invoice, receipt purchase process when you're selling $99/mo. It just doesn't work.
That process makes sense when you're buying and shipping pallets of physical inventory for 5-6 figures. It makes no sense in our SaaS world today.
Re: SaaS Needs a Single Point of Purchase
#88Earlier quoted context omitted.
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.
I don't really agree. I've sold software both independently and by hooking into the AWS marketplace to reuse existing billing channels. It really didn't make anything better even though using AWS as a single point of purchase sounds like a good idea. The enterprise software purchasing process is just a slow one and the actual billing mechanics aren't really the issue in my experience. Plus delegating control of your…
My CFO didn't care about the line items inside our $20,000/mo Heroku bill. What he did care about its size. When I told him we could save a lot of money by fostering a direct relationship with companies like Redis Labs, he was very receptive to making that happen.
My engineers could spend money on new pieces of third-party infrastructure pretty easily via Heroku plug-ins. If the spend got big we figured out how to address it.
For this dynamic to work for you as SaaS developer, you need enough runway to wait for your users to adopt your tech and have some fraction organically grow big enough to be real money.
This rhymes with how Intuit won the accounting market. They initially got destroyed in reviews when compared to their more mature yet complicated competition, but everyone starting a business wanted cheap and simple. You just need to be willing to wait for enough of your early garage-based startup customers to become S&P 500 companies. While you're waiting, you're also evolving your product so that it better meets your growing customers' needs.
Re: SaaS Needs a Single Point of Purchase
#89An 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 was CTO at a company that got bought by an enormous company with these sorts of procurement processes. I mused with my engineers multiple times about a company that would simply do billing process arbitrage.
Re: SaaS Needs a Single Point of Purchase
#90These types of marketplaces do exist but it is very difficult to justify using them. Why pay a significant margin (15-30%) so that we can use a pre-existing billing mechanism inside AppExchange or Azure or AWS. It makes more sense to maintain your own billing system and buyer journey. If the margins go down to 5% then it becomes interesting to give up that control.