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Our Recurring Payment Pricing Was Rejected

jerviswhitley.com

21–30 of 81 posts

Re: Our Recurring Payment Pricing Was Rejected

#21

This seems especially difficult for a web-based model, and I've personally questioned why anyone would want SaaS when: 1. The company already pays for and supports infrastructure. 2. The company already has a development/IT department that can support an installed product. 3. Viable Open Source alternatives (often using open standards) exist and can be tailored specifically to the company's business needs, either by…

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Re: Our Recurring Payment Pricing Was Rejected

#22
post #3

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.

There is a serious disconnect here. Listen to the howls if someone suggests you should rent your media but have no problem telling you to rent your software.

Hmm ... you cannot compare media and software. Very little of the media produced is worth experiencing second time. So rental is natural there.

Software is meant to be used continuously forever and ever. I have some exchanges that I programmed that are 15 years old now - still working peacefully ( the benefit of using PICs - they last forever). The company is no longer in business but with a soldering gun they manage to keep them operational.

So the real question is not only why should I pay you, but what happens when your company goes the way of a cockroach treated with raid. And don't tell me you are market leader - we see them raise and fall 5 times in a decade.

Re: Our Recurring Payment Pricing Was Rejected

#23
post #3

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…

well...depends on how much growth your org has seen in 3 years. If your people are still using Windows XP with IE 7...sure what you say makes sense. But if your org has seen major growth, lots of new employees requiring all kinds of new platforms and form factors then its a slightly different story.

Re: Our Recurring Payment Pricing Was Rejected

#24
post #8

A supplier who wants to switch from pay-once to pay-monthly is either going to be charging me less or charging me more. If they claim they'll be charging me less, that leaves me confused as to why they think the change is in their interests, unless they actually anticipate charging me more.

" who wants to switch from is either going to be charging me less or charging me more."

This is just an argument against change.

Re: Our Recurring Payment Pricing Was Rejected

#25
Another aspect is the utterly strange way internal accounting is done at large companies. When you have lots of department heads trying to optimize for their departments local optima without incentive to consider the companies global optima, you often get seemingly irrational behavior.

Sometimes it simply makes sense for a department to spend a whole lot of money right now as opposed to a little each month, since when money is spent affects which budget it ends up on, which in turn affects things like bonuses and raises.

Re: Our Recurring Payment Pricing Was Rejected

#26

This seems especially difficult for a web-based model, and I've personally questioned why anyone would want SaaS when: 1. The company already pays for and supports infrastructure. 2. The company already has a development/IT department that can support an installed product. 3. Viable Open Source alternatives (often using open standards) exist and can be tailored specifically to the company's business needs, either by…

[deleted]

Re: Our Recurring Payment Pricing Was Rejected

#27

This seems especially difficult for a web-based model, and I've personally questioned why anyone would want SaaS when: 1. The company already pays for and supports infrastructure. 2. The company already has a development/IT department that can support an installed product. 3. Viable Open Source alternatives (often using open standards) exist and can be tailored specifically to the company's business needs, either by…

[deleted]

Re: Our Recurring Payment Pricing Was Rejected

#28

This seems especially difficult for a web-based model, and I've personally questioned why anyone would want SaaS when: 1. The company already pays for and supports infrastructure. 2. The company already has a development/IT department that can support an installed product. 3. Viable Open Source alternatives (often using open standards) exist and can be tailored specifically to the company's business needs, either by…

> I've personally questioned why anyone would want SaaS when:

> 1. The company already pays for and supports infrastructure.

> 2. The company already has a development/IT department that can support an installed product.

Because adopting a SaaS offering instead means the company can greatly reduce the need for (or entirely get rid of) the infrastructure and staff which both cost exponentially more.

Re: Our Recurring Payment Pricing Was Rejected

#29
post #3

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…

> SaaS is often a really crummy deal for the customer and we all know it.

Which is why no company will make very much money with the SaaS model...since we all know it is a crummy deal, we'd never support companies doing SaaS (or PaaS or IaaS). I remember a small startup Sales-something trying to do a CRM as SaaS a few years ago. I'm sure they are gone by now.

Re: Our Recurring Payment Pricing Was Rejected

#30
Next time you are asked Why should I pay for your SaaS every month. Consider what they are thinking, how they’ve multiplied your monthly cost to arrive at the total cost. And what they are comparing your offering against.

You may just find the pitch that works for both you and your customers.

Better yet, make sure that before you try pitching a SaaS model that you're actually planning to deliver $20/month in value to the customer.

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