11–20 of 81 posts
Doesn't look expensive at all to me. These are values I imagine spending on toilet paper.
$2k / 10 years
$10k / 50 years
$20k / 100 yearsSame manager is probably leasing their $50k car and will just get another when the lease is up. People have a hard time putting value on what they cannot touch.
Not sure I understand this sentiment. This same manager would likely be buying a 15k used car outright if he's worried about paying for software over time. The problem that I have with SaaS is that most companies pursuing it's business model fail at the value option. Take Freshbooks for instance - I started using their service 3 years ago for 9$ per month. This got bumped to 14$ per month. I now have to pay 20$ per m…
In the example situation the choice wasn't quite so clear, as IP was on the line too. Regardless: A customer wants to pay an exorbitant fee up front, and you're fretting? Why? Take their money.
I agree. If you're bummed about the result, then I suspect that you priced at least one of the options incorrectly.
First pricing rule: price so that no matter what your customer selects, even if it's to not do business with you, you're indifferent.
You're taking on market and execution risk here, for which you are not receiving compensation. (Presumably you set your consulting rates high enough such that engagements are a win for you. The SaaSification option is at a discount to your rate, which you only make up if you sell it to other people. "Selling it to other people" is often much, much more difficult than writing working software.)
Any consultants in the room who happen to have an engagement which would create usable IP could consider the following alternative: "You pay our normal rates, and you pay for hosting/maintenance, and we own all the IP." This is actually very common, because most customers of software do not want to get into the software business and hence they don't give a fig nutton about commercial exploitation of this system they want to buy from you. No purchasing manager at the US federal government is going to nail his promotion to GSWhatever if he preserves the government's call option on starting a SaaS starttup.
Same manager is probably leasing their $50k car and will just get another when the lease is up. People have a hard time putting value on what they cannot touch.
Same manager is probably leasing their $50k car and will just get another when the lease is up. People have a hard time putting value on what they cannot touch.
Not sure I understand this sentiment. This same manager would likely be buying a 15k used car outright if he's worried about paying for software over time. The problem that I have with SaaS is that most companies pursuing it's business model fail at the value option. Take Freshbooks for instance - I started using their service 3 years ago for 9$ per month. This got bumped to 14$ per month. I now have to pay 20$ per m…
Pre-SaaS most companies would have paid upfront for a piece of software (before knowing if it works for them) and then upgraded ever few years in any case. For multi-user software they would have needed to pay for servers, ops staff, etc. on an on-going basis in any case.
When companies are evaluating a SaaS solution versus a boxed solution price is not typically a major deciding factor.
If the saas cost is being imagined for n years than they should also take into account the inevitable upgrades they would have to pay for with boxed software to keep the software productive.
for example we could take adobe creative suite and its upgrades together for a comparable saas offer.
We get IP ownership, but we don’t bill for our time at all. Instead they become our first customer to use the new tool for a lower yearly fee (including maintenance). You're taking on market and execution risk here, for which you are not receiving compensation. (Presumably you set your consulting rates high enough such that engagements are a win for you. The SaaSification option is at a discount to your rate, which y…
Also, charge for support separately on a deal like this as you are unable to calculate their support needs on a longer time horizon.