Comment by harryf | Hacker News Reader

Comment by harryf | Hacker News Reader

Unfortunately most SaaS companies today have got on a bandwagon of offering “enterprise” versions of their products which alienate those which brought them bottom up into a corporation in the first place.

You can see it in the “pricing” page that goes exponential on the “enterprise” offer and requires calling a sales organization that takes days or weeks to respond (vs filling in a form and providing credit card details). Usually it looks something like this;

- Free: $0 but limited

- Private: $5 / month for some extra features but limited collaboration

- Professional: $49 / month / user ... includes collaboration up to N users

- Enterprise: insane pricing that needs board level approval and will cost your company $millions / year

Free to Professional level I can kind of understand but in terms of scaling, the Enterprise is dumb. If you make me - a developer / designer / PM / etc have to kick off board level meetings to pay for this product, you already lost.

SaaS companies need to keep their pricing scalable so that as their product goes “viral” in an enterprise, people with purchasing control up to $10000 / year in departments and groups across the corporation can keep paying by credit card without needing to get additional approval. Stop making work for your supporters

Some enterprises justify the astronomical increase in spend because of the overhead required to consummate the commercial relationship.

Not sure why you are being down voted. We started integrating with a company everyone knows. Our $80/mo package totally suited their initial needs. They said they couldn't budget for such a small line item and required that we increase the price.

That’s a fair point for _some_ corporations but that shouldn’t mean having to block the others where they just want to keep growing incrementally

Alienating? Possibly

More alienating and expensive than some crap by SAP or IBM? Probably not.

> a developer / designer / PM / etc have to kick off board level meetings to pay for this product, you already lost.

Don't worry, you don't have to do it. Their sales team will do the job once you're at professional level.

SAP write some really good and very complicated software to do compicated things. It is not 'crap'. Their ERP offering is really solid. The anecodtes about SAP going wrong are imho due to implementation issues. There is nothing I have seen from the SAAS space that is close to doing what the fullblown SAP ERP products can do for a multinational, multicurrency manufacturer

I wish the world operated this way, but unfortunately very large organizations, like Fortune 1000 companies has Universities have entire departments dedicated to people evaluating and purchasing software.

Think of it this way, when you are paying people to acquire software for your organizations, they justify a salary. To do that, they need to show they’re adding value to the process. The easiest way of them doing that is to show they negotiated a chunk of dollars that in aggregation exceeds their salary, which means they need to show they knocked $10k, $25k, $100k here and there off of software. Selling it for $10k won’t get them the numbers they’d like to see.

The more valuable aspect of procurement is security evaluations. Somebody has to make the SaaS software that an org is adopting will be around for a while, is reasonably secure, and not some fly by night operation.

Only companies that operate at a massive scale can offer pricing like AWS, but until niche SaaS software can become more of a commodity (or the evaluation of it), the seemingly odd world of “Enterprise for 2 magnitudes more” will persist to make it worth the buyers time.

> If you make me - a developer / designer / PM / etc have to kick off board level meetings to pay for this product, you already lost.

Usually Enterprise has all features of Professional, but has high or unlimited number of actions included (e.g. API calls per month), so they leave this door for negotiations about acceptable prices to increase chance of new customer acquisition.

I get that but if you look at how Amazon handles this with AWS, in principle you can keep scaling up usage for as long as you have enough credit cards to cover it. The board-level discussion shifts to one about costs needed to run the business instead of having to make the case for additional features or uncapped limits on a tool that the board probably doesn’t understand and perhaps isn’t even aware of.

By the time you hit the cost discussion on AWS, the value you’re getting out of it is hopefully self-evident.

And yes AWS has sales people but most of the time they’re acting as consultants and “helpers” rather than someone you need to negotiate with.

Thanks for this :) A couple of months away from releasing a product that will need to handle high-scale customer pricing. To clarify, when you say "scaleable" are you referring to scaling the price using some internal usage meter (e.g., $10 for every 10 users)?

That’s right - scaling the price (or perhaps volume)

Joel Spolsky says anything more than 1k is too much and require approval. Has this amount now changed?

That may be right. I’m in Switzerland where the first level of management usually gets a free pass on things up 5000K or 10000K

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