16 ms·

SaaS Needs a Single Point of Purchase

170 points by alangibson 6y ago

entrep 6y ago
https://www.appxite.com/ https://www.appxite.com/ is one company doing exactly this
Jugurtha 6y ago
This is a pretty established distribution model often called "bottom up" approach, and it's particularly relevant to enterprise sales where you allow the users to start using the software without friction [something that was proper to "consumer" applications] and then allow management to pay for that software, or users to pull their corporate credit card and buy what their budget allows. One turn-off for us for machine learning platforms was going to the website, wanting to try the software, and then finding a button that says "Schedule a demo" or "Schedule a sales call". I want to try the software, not talk with your salespeople. I want to create an account, or request access to a demo account without speaking with someone. Then I want to be able to pay for it without speaking to someone. I have the proverbial, and sometimes literal, credit card in my hand: let me pay. That weighed on our decision to make our own platform[0], because we simply don't like to buy things this way. Again, there are differences with low-touch and high-touch software, and situations where the regulatory context or contract amounts require that at some point, people sit down together, but that's for particular cases and clients. We made custom machine learning products for large enterprise, so we sit a lot with clients, but the word "custom" is there. Some content that goes into this is Slack's CEO discussing this with Yammer's former CEO[1]. Slack's CEO also discussed this in a Pando Monthly[2]: they didn't have a "sales" team, but sometimes needed to 'onboard' a large organization. He also addresses how raising $1B reassured many 'traditional' and 'sensitive' organizations into using Slack for internal communications. - [0]: https://iko.ai https://iko.ai - [1]: https://www.youtube.com/watch?v=4NbXBGjUrA0 https://www.youtube.com/watch?v=4NbXBGjUrA0 - [2]: https://www.youtube.com/watch?v=TbM1iOi33NY https://www.youtube.com/watch?v=TbM1iOi33NY
- bauerd 6y ago
  >One turn-off for us for machine learning products was going to the website, wanting to try the software, and then finding a button that says "Schedule a demo" or "Schedule a sales call". Share the sentiment but both of us are likely not the target audience for these kinds of funnels then. Decision-makers who go down the "talk to our sales team" route are more likely to sign big enterprise-y contracts in the end I guess
  - Jugurtha 6y ago
    >Share the sentiment but both of us are likely not the target audience for these kinds of funnels then. Except I'm an engineer first who just happens to be able to make that decision, and I made the decision not to buy. Here's the thing: we've been making bespoke machine learning products for large enterprise for quite long. Not huge contracts, but say mid six-figures on average. We sit down with our clients but the key word here is "bespoke", which warrants these meetings and communications and calls. We build these solutions from scratch to solve their problems with their workflows. Anything that's not bespoke or where we don't have to discuss regulatory matters or where that conversation is not required by law is a roadblock for my purchase. One reason we're making our platform is to reduce that necessity and be able to deliver that value to companies without ever speaking to us. Heck that "speaking" is also included in the cost of the product, and all those "engineer.days" add up pretty quickly, making our client list exclusively composed of behemoths who sometimes happen to have internal ML teams but just need more help, or because we happen to have expertise on a problem and they're inexperienced despite their size. One of our biggest frustrations is that we could not serve smaller organizations, and I'm not even talking mom & pop's or SMBs, but even some organizations that seem large shy away from this kind of projects even though they want to leverage data. I find that these companies and products are targeting decision makers who do not consult with their teams and buy products nobody will use. They're targeting dysfunctional organizations which, I'll grant you that, may be a large enough segment to build a business around. Not my ideal to wake up and earn a living, though, but that's another matter.
  - deleted 6y ago
    [deleted]
chrismeller 6y ago
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...
- alangibson 6y ago
  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.
  - elygre 6y ago
    I literally wrote “I’m begging on my knees” to a LastPass sales person recently. I’ll make sure to have another solution in place before next year’s renewal.
    - alangibson 6y ago
      > “I’m begging on my knees” I feel your pain
  - Fission 6y ago
    I'm a maker of satchel.com. This is one of the core problems we aimed to tackle. In doing so, we've actually build out _exactly_ this. There are still some crucial obstacles to ensure robustness, but I'd love to get your feedback nonetheless. Could I ask some questions over email? I can't find yours, but I'm at andrew@satchel.com
    - alangibson 6y ago
      Sure, I'll email you. (And thanks for reminding me that I need to add my email to the site.)
gtardini 6y ago
Y-Combinator backed company which does something along the lines of what you describe: https://onetool.co/home/ https://onetool.co/home/
- davidjgraph 6y ago
  https://onetool.co/saas-vendors/ https://onetool.co/saas-vendors/ "Keep your competition out! onetool accepts a limited number of partners for each service and pricing-tier. Most of your competition will not be onboard if you are." Read as, we'll only support a limited number of vendors who approach us first, regardless of which the best solutions are. More likely, they will only recommend the vendors they get the biggest cuts from. As a user this is no use.
- alangibson 6y ago
  I'm very skeptical this would work as a for-profit business, especially a VC backed one, because their will always be pressure to take a bigger and bigger piece of the revenue. Interesting that their social proof lists a bunch of silicon valley companies that are probably about the least likely to have the issues I described.
deleted 6y ago
[deleted]
jakozaur 6y ago
As a director at successful startup I see how we went from being able to buy new software in minutes by pulling credit card to multi stage procurement process of public company. All changes got good intention: 1. We need to be secure. Know what kind of data there. 2. We need check and balances for finance. 3. We need to be compliant. Etc. I would love if there would be open consortium that could provide a lot of services, without price overhead that also establish some quality/security/compliance bar for its members. Companies as a broker model is flawed. Procurement won't accept paying 20%+ extra for same stuff. Terrible lock-in.
- numbsafari 6y ago
  In healthcare this is referred to as the Group Purchasing Organization (GPO) model. Instead of waiting for sales orgs to band together, purchasers band together to negotiate and vet products and services. This is a much better model, in my opinion, because it keeps the incentives on the side of the buyers, not the sellers. Keep in mind, certain products still have to be vetted by the individual purchasers due to statutory requirements. But, as a buyer you narrow the scope of offerings you have to consider and you increase the likelihood that your in-house audit will pass. So, there's still a benefit even if you absolutely must inspect their facilities yourself.
  - conductr 6y ago
    What also happens in healthcare is the manufacturer raises prices to account for margins of/lost to the GPOs. Individual buyers become required to buy through GPO as the price differences are stark. As GPO gains negotiating power, they want to keep more spread for themselves. Manufacturers adjust. The cycle continues, all the while the ecosystem becomes more expensive since you inserted yet another middle man.
amadeuspagel 6y ago
This could also enable bundling. For example you could have a startup bundle that includes anything from cloudflare's pro plan to tools for email marketing.
- alangibson 6y ago
  Sure. Once you solve the fundamental purchasing problem, you have all kinds of options up to an including building a sort of hodge podge AWS.
ing33k 6y ago
doesn't Salesforce already has something like this ? Heroku addons ?
- alangibson 6y ago
  There's limited examples. What I'm saying is this model needs to be much more widely used so it's easier for SaaS companies to access big, slow companies.
rweissgraeber 6y ago
Actually, AWS Marketplace is trying to do exactly this.
- numbsafari 6y ago
  GCP has a similar capability. One thing that is kind of amusing was that I was able to find a price sheet in the AWS marketplace for GCP-owned Looker that isn't available anywhere else. Apparently the AWS solution not only works as a way to simplify your purchasing, it also works to produce better transparency in the market. I'm not sure the product mix in either case is necessarily what the OP was talking about, though. For example, I don't think, e.g. SalesForce or HubSpot are available on either.
  - titanomachy 6y ago
    I dug for an example on Google Cloud and found this "Zenoss" product [1]. "Managed Services are fully hosted, managed, and supported by the service providers. Although you register with the service provider to use the service, Google handles all billing." Seems to be exactly what the author describes. No idea what share of the subscription fee Google takes. [1] https://console.cloud.google.com/marketplace/details/zenoss-261620/zenoss https://console.cloud.google.com/marketplace/details/zenoss-...
  - p_l 6y ago
    A significant problem with GCP is how they only handle credit cards, and with various limitations, in many areas. I had outages purely because I could not just wire the money - a common way of handling payments in Poland (I have even used bank transfers to pay for pizza takeout).
- alangibson 6y ago
  I know. And given how hostile Amazon can be to sellers, I would love to see them fail to become the standard.
  - sokoloff 6y ago
Kharvok 6y ago
I should be able to license any Saas tool without talking to a sales rep or doing some kind of "scoping" call.
- villgax 6y ago
  This is a technique many companies employ when the product is inferior, they do not want the competition to evaluate their products/offerings without signing contracts.
shireboy 6y ago
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 to handle compliance and be sure POs were valid, fair pricing, no conflicts, etc. but do that against one vendor instead of 100. It would be difficult to get right though. Balancing buyer and seller interests while trying to get a cut. In fact the same org I’m thinking about was recently forced to do all purchasing through a 3rd party vendor and it slowed down and complicated purchasing even more...
- alangibson 6y ago
  > My public sector clients esp. have a hard time buying any Saas Indeed. It's probably even harder for then than it was for us. > Balancing buyer and seller interests while trying to get a cut. This is what made me jump to the idea of a non-profit consortium set up by SaaS vendors with a mandate to grow the market by reducing friction in purchasing
- c17r 6y ago
  > 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.
jariel 6y ago
'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.
- alangibson 6y ago
  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.
  - jariel 6y ago
    Why would employees be buying services individually? With 10K employees there would be a site licence.
    - dagw 6y ago
      Just because your company has 10k employees doesn't mean they need 10k licenses for everything they buy. Often only 10 people in one department in one country need that one specific thing.
      - alangibson 6y ago
        Indeed. The team should pick the right tools for them.
      - jariel 6y ago
        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 rep. from the finance do that, if it's over $X amount it needs approvals etc. etc. it's not rocket science, just like the special chairs, the screen for the window, the special hard drive.
mcs_ 6y ago
One of the issues of making all the services together is the discount. Implement a discount system across multiple SaaS has to do with sales strategy. Standardize everything, including the costs, seems like the end of creativity. However, creating a massive checklist that makes the user choose between services and, step by step, simulate final costs (which will include computation, task management, monitoring, customer support, etc.) is a titanic job that could change within the next generation.
- alangibson 6y ago
  I don't think discounting bundles really needs to even be included in this. Just having one payment processor counterparty is already a huge win.
dannyw 6y ago
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.
- alangibson 6y ago
  There are many, many huge corporations that aren't going away and aren't changing any time soon. In the mean time, the SaaS industry is missing out on billions if I'm right.
- dagw 6y ago
  "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 insensitive once they've decided that they want to buy your service, assuming you make it easy for them to give you their money.
  - alangibson 6y ago
    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.
pforret 6y ago
I had a similar idea recently after hearing a CIO say that there was only 1 (one) corporate credit card in his 1000+ employees company, and it was the CEO's. For him, SaaS on a credit card was a no-go, it needed to be a monthly invoice. I think it's an opportunity for a new kind of financial business, where SaaS subscriptions can be ordered (with some kind of approval workflow) by a selection of LargeCorp employees, and there is only 1 monthly grouped invoice to LargeCorp, with a known and pre-approved PO number. Money could even be made by getting the money in from the LargeCorps earlier than it's being paid out to the SaaS services. Or a simple markup.
darrmit 6y ago
The biggest obstacle to this is not necessarily technology, but the vastly different ways SaaS companies opt to go to market via reseller channels - or don't. Google and Microsoft have both had established reseller channels for a long time, but there are still major vendors who only recently (or still haven't..) established this. Slack is a great example - they only sell direct. And companies who use Slack have a tendency to "sprawl" into other SaaS apps that may not have a reseller channel, creating a bit of a snowball effect. Contrast this with companies "bought in" to Microsoft where it's much more common to see them adopt Microsoft Teams and other technologies to avoid that sprawl - and they typically buy via Microsoft partners who can bill them on a single invoice. While we can't force SaaS vendors to acknowledge that customers want a single bill/distributor, we are working on the problem further upstream by creating a marketplace [1] backed by a network of connectivity agents who are expanding into the SaaS world. One point of purchase/bill for connectivity + SaaS (and IaaS) with additional benefits such as management, etc. Even more interestingly, we're covering the developer, distributor, reseller, and customer channels on a single platform. [1] https://www.appsmart.com https://www.appsmart.com
- fstopmick 6y ago
  Do you have a salesforce?
surfingdino 6y ago
Such companies do exist. They are usually run by friends of the people working in procurement at various companies.
- alangibson 6y ago
  Sounds like my reseller buddies.
grenoire 6y ago
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 balance. 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.
- alangibson 6y ago
  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-off for onboarding I bet) or keeping wildly volatile short-term liabilities on their balance.
  - uberswe 6y ago
    In Sweden we also have something similar to purchase orders which is common even with B2C and it always bothered me how often it is used compared to the US where credit card was more normal. I think the article brings up a good point, if a startup could figure out the taxes and bookkeeping, set some reasonable margins or costs for the service it could be a really good business. Edit: Sorry, they would handle the POs so that is liability, I guess some kind of verification or legal framework is also needed here.
    - Jugurtha 6y ago
      >In Sweden we also have something similar to purchase orders which is common even with B2C and it always bothered me how often it is used compared to the US where credit card was more normal. Our clients send us purchase orders in Europe, but the context is custom, turn-key, machine learning products developer for large enterprise. We take them by the hand from "I have many problems" to a product their people want to use. We're building our machine learning platform to make that product development faster (data, scheduling training notebooks, automatic tracking, etc.). We also adopted a plugin architecture for product so we can plug functionality and, more importantly, remove functionality to allow clients to discard what they don't need and avoid a product with 2000 buttons and menu items.
lifeisstillgood 6y ago
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 would offer Enterprises a "turn off that Sht" option (at a cost) or b) every purchasing department would add even more hurdles* before you could pay out. Yes, it is hard to buy stuff in a corporate - but it is not a bug its a feature.
- alangibson 6y ago
  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.
  - lifeisstillgood 6y ago
    I quarter agree :-) I have been through (many) purchase processes and they have always been painful. Especially true the first time you try and make a purchase at any large org. I call this "Director Hazing". Being promoted to Director (US company designation) usually involves a year of administrative hell as you have to learn all the horrific systems that have grown up in the company over time. There is a sort of "sink or swim" mentality and once a director gets through it they are selected for being the sort of person who can operate this system (ie responds to emails quickly) - and that tends to work against promoting people who will fix it. Anyway, as I say I reckon 25% of the time management thinks it should fix the problem and 75% of the time "I can work the system and so can anyone else at a certain level - everyone else has not been promoted and so should not get to spend the cash" I still remain convinced the system works as intended. A side note - there was some study I read about a major supermarket chain that used cameras and POS data to rank their checkout workers - and a small revolt from store managers killed the project. The store managers knew who performed best and worst at that part of the job - but that ranking did not fit the ranking for the other intangible parts of the job. And they wanted the flexibility to decide who to fire / keep / promote. And a clear metric would have got in the way. Similarly management can if they want make sure your vendor is set up, your licenses paid for. If it is high enough up their priority tree. And if it is not having a widely hated terrible system is a good excuse to avoid saying no to subordinates...
dvlx 6y ago
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 products like Mulesoft, IIB etc. because we are easily able to augment/extend/enhance
- alangibson 6y ago
  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
part1of2 6y ago
> Atlassian because they don’t take POs To me that sounds like Atlassian is leaving a lot of money on the table
- nautical 6y ago
  >lot of money I believe lot of money is a relative term.
encoderer 6y ago
There’s merit here but one challenge is that such a service is just another revolving line of credit for the company. Another credit card. Finance would likely want it locked down as well. Ive had a lot of success shaving hundreds of thousands off aws budgets and my first tactic is always to create mental awareness that every terraform apply is a virtual swipe of the company credit card. In big companies, making it hard for non-executives to spend money is a feature not a bug.
- alangibson 6y ago
  That's not a tough but to crack. It's pretty straightforward to build a feature that sets limits by team, business unit, etc.
  - encoderer 6y ago
    Budgets are important but mindful spending is even more important.
say_it_as_it_is 6y ago
The entire SaaS industry already looks like a single vendor with many products for sale, accessible by search engine. I wonder to what extent managers are defaulting to an AWS provided services just to reduce cognitive overhead (ie. thinking)?
crb002 6y ago
It's even more lopsided. AWS is a short term lending institution, it isn't pay up front.
mtnGoat 6y ago
Sounds 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.
- hobs 6y ago
  Yeah, telling your customers that they should modernize is a great way to let someone else sell to them.
  - cwp 6y ago
    OTOH, telling an entire industry to reorganize to accommodate your internal processes is also a fools errand. Just imagine the dilemma this puts on the growth team: "Hmm, spend 1000x effort to land this one customer or fix an obscure bug in the signup page and get an extra 1000 self-serve customers this month. Golly, I don't know..."
    - npsimons 6y ago
      Seriously, though, GP is correct. Small companies that can adapt and snag these contracts won't push for change because they have a "competitive" advantage, and the businesses they sell to won't change because it's too painful for them. The whole industry isn't being asked to change, small B2B software houses will just keep ticking along, navigating the maze of purchasing to live high on the hog.
    - MattGaiser 6y ago
      The industry has the choice of changing or ever racing ahead of AWS, who can take their potential customers merely by already being in the purchasing database.
  - mtnGoat 6y ago
    If the means don't justify the ends, let my competition sell to them... Then it will be adding to their failure, not mine. I do agree with your sentiment though, asking the customer to change is an uphill battle. I have customers with lots of custom billing situations, I loathe then all.
mikikian 6y ago
Sounds like he's asking for a new PaaS (Procurement as a Service).
OliverJones 6y ago
Oh 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...)
- alangibson 6y ago
  It's not that can't set up a credit card or do ACH, it's that they won't. The reasons usually have to do with financial controlling rules that I can't begin to fathom.
  - throw_awy_1 6y ago
    It looks like Atlassian does take POs though. Is there something about the way they (or other SaaS) companies take POs? How do I submit a Purchase Order (PO number) to Atlassian? (https://www.atlassian.com/licensing/purchase-licensing#ordering https://www.atlassian.com/licensing/purchase-licensing#order...) To get started, complete our secure online Quote & Order Form. On the final confirmation page, check the PO number box to add your PO number. The PO number will appear on your quote or invoice (valid for 30-days). If you already have a quote or invoice, you can update the quote or invoice through my.atlassian.com via the Orders tab. Atlassian is happy to reference a PO number on a quote or invoice for your internal tracking and record keeping. However, we do not accept purchase orders as a form of payment nor the terms and conditions commonly associated with purchase orders. We provide fully functional trial licenses for you to use while payment is being arranged. We are able to keep our prices low by offering standard product agreements to all our customers and do not offer commercial credit.
mperham 6y ago
You 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.
- alangibson 6y ago
  True story: a previous employer would not bother issuing POs for less thank 2000 euro, so we couldn't even think about buying anything that was too cheap
Ennis 6y ago
These 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.
- alangibson 6y ago
  I don't think marketplace is the metaphor I'm looking for. A single purchasing portal that takes maybe 5% to keep the lights on is more like it. A PayPal or Stripe set up by a SaaS consortium just to remove friction from the industry might be a good approach.
harrisonjackson 6y ago
Extra credit for - team accounts - budgets and rules for new software - password management with security audits and MFA enforcement - automated purchasing during employee onboarding - hardware and other purchase management like laptops and mobile device management
kevincox 6y ago
What is a PO?
- OJFord 6y ago
  Purchase Order, sort of a 'reverse invoice' used by large companies to manage purchasing from suppliers.
josephfung 6y ago
Isn't that just what https://www.appdirect.com/ https://www.appdirect.com/ offers?
ponker 6y ago
The blog post describes only the billing advantages of the "single vendor" approach like AWS or Microsoft. But the other half of it is much more important, and that's the security/compliance aspect. You know that anything you buy from AWS or Microsoft is engineered to a common set of security / privacy standards, and that whatever those standards are have been audited by governmental customers etc. Of course they're not perfect, but there is a definite increased security risk in having your corporate data sit inside 20 different companies vs. 1.
brundolf 6y ago
So do news sites, so do streaming services, so do (in my opinion) charities. The manual overhead of setting up (and then managing) a bunch of micro-subscriptions is a significant source of friction when it comes to adoption. It raises the barrier of "is it worth dealing with?". Payment providers like PayPal and Apple Pay do a little bit to help you centralize things, but I think there's a ton of improvement left to be made in this area.
knoxa2511 6y ago
The cloud providers are trying to solve this problem - more and more of our customers are purchasing through the marketplace. It allows them to drive down spend commitments to AWS, GCP, etc - it's a pretty good experience all around and enables usage based pricing + easy collections. Which is something all startups hate dealing with.
brianbreslin 6y ago
I would love to see someone start Stripe for POs. I work at a University and navigating the bureaucracy just to pay for Asana was an utter shit show. Especially once the university procurement team learned ANOTHER department was paying for it, and suggested we just use their license... smh. In a similar vein, I often opt for yearly billing even not discounted just to not have to submit receipts and proof of purchases every month for the things we are allowed to purchase.
sscarduzio 6y ago
I own a SaaS and 99% of our customers are huge international corporations. They only buy with PO, and every sale is a massive bureaucratic effort. I hired a freelance account manager to deal with incredible requirements like: - anti money laundering declarations - mandatory company stamp + hand written signatures - supplier enrollment forms (excel+macros) - notary apostilles for incorporation certificates sent across to Russia Software resellers do this as a job, and I thought they are stupid middlemen nobody loves. Actually they are amazing.
- golergka 6y ago
  Out of curiosity, what kind of SaaS is it?
  - sscarduzio 6y ago
    It's not strictly a SaaS, but it's a subscription product based on an open core. https://readonlyrest.com https://readonlyrest.com
- m463 6y ago
  PO2$$aaS
- anhldbk 6y ago
  What does PO mean?
  - Macha 6y ago
    Purchase Order: https://en.wikipedia.org/wiki/Purchase_order https://en.wikipedia.org/wiki/Purchase_order More important than the PO form is the entire rest of the corporate purchasing process it entails. You send them a quote, they try haggle you down, they might make their internal team send the bid out to multiple vendors for quotes and try to play you all off against each other (and how well you meet the requirements for the actual end user is not a a part of this process, just their checklist which is three degrees removed) they decide what quantities they want to buy, you confirm the price, send an invoice, they'll pay net 30 or net 90 or whatever their purchasing department decides via whatever payment method their department decides and you'll do it because with the bulk order amount and the markup you'll decide is justified for this hassle, the money is too much to refuse.
destory-everyth 6y ago
It’s not just a single point of purchase, big co need to ensure your subcontractors subcontractors subcontractors enforce our policies and control around protection of data, we need to be able to Inspect that whenever our auditors feel like it. The complex issue with SaaS for big co is getting them to demonstrate a good business continuity plan and actually execute tests (your primary building was destroyed ... you own another building with connectivity , hardware just sitting around on ice ready to go right ? ) You have key man dependencies please asses that every 6 months and hire 35 people to cover that 1 KMD and show us your working on how you assess this. If your SaaS is so killer / think it’s a big competitive advantage big co will help you set all this up and guide you to an extent. But in this case this is your first big co and they will make sure your time is totally consumed by our mountain of lawyers , procurement officers, security , it , operations.... but at the same time finance want to check your books to make sure we are not your single customer and that you have a history of making money , check the key peoples backgrounds for any history of fiscal malaise , conflicts of interest blah blah blah. The worst is when. We deal with the vendor negotiate a price the procurement people who have no idea about what it is their purchasing have a kpi on saving big co x % off every piece of paper that passes their desk so they go in at the last mile after pretty much everything is set and pull your pants down (don’t forget to leave fat for this ) And good luck.
bmcahren 6y ago
We've been waiting 90+ days for one of our clients to pay their invoices once we switched from CC to PO + ACH through Stripe. I'm about to just see if we can charge the card for the full three months so we can manually flag the invoices as paid. Terms are net 18 usually. The PO process is awful. We have to fill out forms as a vendor, submit tax information. It's completely unneeded. If your company requires POs for SaaS you need to take a step out of the 20th century.
siddharthadamas 6y ago
That’s a brilliant observation. Something we came across as well and we ended up starting Spendflo.com to solve it :)
NoCanDo 6y ago
Fuck no, get your company to not be dumbasses.

170 points by alangibson 6y ago

https://www.appxite.com/ https://www.appxite.com/ is one company doing exactly this

This is a pretty established distribution model often called "bottom up" approach, and it's particularly relevant to enterprise sales where you allow the users to start using the software without friction [something that was proper to "consumer" applications] and then allow management to pay for that software, or users to pull their corporate credit card and buy what their budget allows. One turn-off for us for machine learning platforms was going to the website, wanting to try the software, and then finding a button that says "Schedule a demo" or "Schedule a sales call". I want to try the software, not talk with your salespeople. I want to create an account, or request access to a demo account without speaking with someone. Then I want to be able to pay for it without speaking to someone. I have the proverbial, and sometimes literal, credit card in my hand: let me pay. That weighed on our decision to make our own platform[0], because we simply don't like to buy things this way. Again, there are differences with low-touch and high-touch software, and situations where the regulatory context or contract amounts require that at some point, people sit down together, but that's for particular cases and clients. We made custom machine learning products for large enterprise, so we sit a lot with clients, but the word "custom" is there. Some content that goes into this is Slack's CEO discussing this with Yammer's former CEO[1]. Slack's CEO also discussed this in a Pando Monthly[2]: they didn't have a "sales" team, but sometimes needed to 'onboard' a large organization. He also addresses how raising $1B reassured many 'traditional' and 'sensitive' organizations into using Slack for internal communications. - [0]: https://iko.ai https://iko.ai - [1]: https://www.youtube.com/watch?v=4NbXBGjUrA0 https://www.youtube.com/watch?v=4NbXBGjUrA0 - [2]: https://www.youtube.com/watch?v=TbM1iOi33NY https://www.youtube.com/watch?v=TbM1iOi33NY

bauerd 6y ago
>One turn-off for us for machine learning products was going to the website, wanting to try the software, and then finding a button that says "Schedule a demo" or "Schedule a sales call". Share the sentiment but both of us are likely not the target audience for these kinds of funnels then. Decision-makers who go down the "talk to our sales team" route are more likely to sign big enterprise-y contracts in the end I guess
- Jugurtha 6y ago
  >Share the sentiment but both of us are likely not the target audience for these kinds of funnels then. Except I'm an engineer first who just happens to be able to make that decision, and I made the decision not to buy. Here's the thing: we've been making bespoke machine learning products for large enterprise for quite long. Not huge contracts, but say mid six-figures on average. We sit down with our clients but the key word here is "bespoke", which warrants these meetings and communications and calls. We build these solutions from scratch to solve their problems with their workflows. Anything that's not bespoke or where we don't have to discuss regulatory matters or where that conversation is not required by law is a roadblock for my purchase. One reason we're making our platform is to reduce that necessity and be able to deliver that value to companies without ever speaking to us. Heck that "speaking" is also included in the cost of the product, and all those "engineer.days" add up pretty quickly, making our client list exclusively composed of behemoths who sometimes happen to have internal ML teams but just need more help, or because we happen to have expertise on a problem and they're inexperienced despite their size. One of our biggest frustrations is that we could not serve smaller organizations, and I'm not even talking mom & pop's or SMBs, but even some organizations that seem large shy away from this kind of projects even though they want to leverage data. I find that these companies and products are targeting decision makers who do not consult with their teams and buy products nobody will use. They're targeting dysfunctional organizations which, I'll grant you that, may be a large enough segment to build a business around. Not my ideal to wake up and earn a living, though, but that's another matter.
- deleted 6y ago
  [deleted]

chrismeller 6y ago

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...

alangibson 6y ago
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.
- elygre 6y ago
  I literally wrote “I’m begging on my knees” to a LastPass sales person recently. I’ll make sure to have another solution in place before next year’s renewal.
  - alangibson 6y ago
    > “I’m begging on my knees” I feel your pain
- Fission 6y ago
  I'm a maker of satchel.com. This is one of the core problems we aimed to tackle. In doing so, we've actually build out _exactly_ this. There are still some crucial obstacles to ensure robustness, but I'd love to get your feedback nonetheless. Could I ask some questions over email? I can't find yours, but I'm at andrew@satchel.com
  - alangibson 6y ago
    Sure, I'll email you. (And thanks for reminding me that I need to add my email to the site.)

gtardini 6y ago

Y-Combinator backed company which does something along the lines of what you describe: https://onetool.co/home/ https://onetool.co/home/

davidjgraph 6y ago
https://onetool.co/saas-vendors/ https://onetool.co/saas-vendors/ "Keep your competition out! onetool accepts a limited number of partners for each service and pricing-tier. Most of your competition will not be onboard if you are." Read as, we'll only support a limited number of vendors who approach us first, regardless of which the best solutions are. More likely, they will only recommend the vendors they get the biggest cuts from. As a user this is no use.
alangibson 6y ago
I'm very skeptical this would work as a for-profit business, especially a VC backed one, because their will always be pressure to take a bigger and bigger piece of the revenue. Interesting that their social proof lists a bunch of silicon valley companies that are probably about the least likely to have the issues I described.

deleted 6y ago

[deleted]

jakozaur 6y ago

As a director at successful startup I see how we went from being able to buy new software in minutes by pulling credit card to multi stage procurement process of public company. All changes got good intention: 1. We need to be secure. Know what kind of data there. 2. We need check and balances for finance. 3. We need to be compliant. Etc. I would love if there would be open consortium that could provide a lot of services, without price overhead that also establish some quality/security/compliance bar for its members. Companies as a broker model is flawed. Procurement won't accept paying 20%+ extra for same stuff. Terrible lock-in.

numbsafari 6y ago
In healthcare this is referred to as the Group Purchasing Organization (GPO) model. Instead of waiting for sales orgs to band together, purchasers band together to negotiate and vet products and services. This is a much better model, in my opinion, because it keeps the incentives on the side of the buyers, not the sellers. Keep in mind, certain products still have to be vetted by the individual purchasers due to statutory requirements. But, as a buyer you narrow the scope of offerings you have to consider and you increase the likelihood that your in-house audit will pass. So, there's still a benefit even if you absolutely must inspect their facilities yourself.
- conductr 6y ago
  What also happens in healthcare is the manufacturer raises prices to account for margins of/lost to the GPOs. Individual buyers become required to buy through GPO as the price differences are stark. As GPO gains negotiating power, they want to keep more spread for themselves. Manufacturers adjust. The cycle continues, all the while the ecosystem becomes more expensive since you inserted yet another middle man.

amadeuspagel 6y ago

This could also enable bundling. For example you could have a startup bundle that includes anything from cloudflare's pro plan to tools for email marketing.

alangibson 6y ago
Sure. Once you solve the fundamental purchasing problem, you have all kinds of options up to an including building a sort of hodge podge AWS.

ing33k 6y ago

doesn't Salesforce already has something like this ? Heroku addons ?

alangibson 6y ago
There's limited examples. What I'm saying is this model needs to be much more widely used so it's easier for SaaS companies to access big, slow companies.

rweissgraeber 6y ago

Actually, AWS Marketplace is trying to do exactly this.

numbsafari 6y ago
GCP has a similar capability. One thing that is kind of amusing was that I was able to find a price sheet in the AWS marketplace for GCP-owned Looker that isn't available anywhere else. Apparently the AWS solution not only works as a way to simplify your purchasing, it also works to produce better transparency in the market. I'm not sure the product mix in either case is necessarily what the OP was talking about, though. For example, I don't think, e.g. SalesForce or HubSpot are available on either.
- titanomachy 6y ago
  I dug for an example on Google Cloud and found this "Zenoss" product [1]. "Managed Services are fully hosted, managed, and supported by the service providers. Although you register with the service provider to use the service, Google handles all billing." Seems to be exactly what the author describes. No idea what share of the subscription fee Google takes. [1] https://console.cloud.google.com/marketplace/details/zenoss-261620/zenoss https://console.cloud.google.com/marketplace/details/zenoss-...
- p_l 6y ago
  A significant problem with GCP is how they only handle credit cards, and with various limitations, in many areas. I had outages purely because I could not just wire the money - a common way of handling payments in Poland (I have even used bank transfers to pay for pizza takeout).
alangibson 6y ago
I know. And given how hostile Amazon can be to sellers, I would love to see them fail to become the standard.
- sokoloff 6y ago

Kharvok 6y ago

I should be able to license any Saas tool without talking to a sales rep or doing some kind of "scoping" call.

villgax 6y ago
This is a technique many companies employ when the product is inferior, they do not want the competition to evaluate their products/offerings without signing contracts.

shireboy 6y ago

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 to handle compliance and be sure POs were valid, fair pricing, no conflicts, etc. but do that against one vendor instead of 100. It would be difficult to get right though. Balancing buyer and seller interests while trying to get a cut. In fact the same org I’m thinking about was recently forced to do all purchasing through a 3rd party vendor and it slowed down and complicated purchasing even more...

alangibson 6y ago
> My public sector clients esp. have a hard time buying any Saas Indeed. It's probably even harder for then than it was for us. > Balancing buyer and seller interests while trying to get a cut. This is what made me jump to the idea of a non-profit consortium set up by SaaS vendors with a mandate to grow the market by reducing friction in purchasing
c17r 6y ago
> 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.

jariel 6y ago

'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.

alangibson 6y ago
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.
- jariel 6y ago
  Why would employees be buying services individually? With 10K employees there would be a site licence.
  - dagw 6y ago
    Just because your company has 10k employees doesn't mean they need 10k licenses for everything they buy. Often only 10 people in one department in one country need that one specific thing.
    - alangibson 6y ago
      Indeed. The team should pick the right tools for them.
    - jariel 6y ago
      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 rep. from the finance do that, if it's over $X amount it needs approvals etc. etc. it's not rocket science, just like the special chairs, the screen for the window, the special hard drive.

mcs_ 6y ago

One of the issues of making all the services together is the discount. Implement a discount system across multiple SaaS has to do with sales strategy. Standardize everything, including the costs, seems like the end of creativity. However, creating a massive checklist that makes the user choose between services and, step by step, simulate final costs (which will include computation, task management, monitoring, customer support, etc.) is a titanic job that could change within the next generation.

alangibson 6y ago
I don't think discounting bundles really needs to even be included in this. Just having one payment processor counterparty is already a huge win.

dannyw 6y ago

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.

alangibson 6y ago
There are many, many huge corporations that aren't going away and aren't changing any time soon. In the mean time, the SaaS industry is missing out on billions if I'm right.
dagw 6y ago
"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 insensitive once they've decided that they want to buy your service, assuming you make it easy for them to give you their money.
- alangibson 6y ago
  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.

pforret 6y ago

I had a similar idea recently after hearing a CIO say that there was only 1 (one) corporate credit card in his 1000+ employees company, and it was the CEO's. For him, SaaS on a credit card was a no-go, it needed to be a monthly invoice. I think it's an opportunity for a new kind of financial business, where SaaS subscriptions can be ordered (with some kind of approval workflow) by a selection of LargeCorp employees, and there is only 1 monthly grouped invoice to LargeCorp, with a known and pre-approved PO number. Money could even be made by getting the money in from the LargeCorps earlier than it's being paid out to the SaaS services. Or a simple markup.

darrmit 6y ago

The biggest obstacle to this is not necessarily technology, but the vastly different ways SaaS companies opt to go to market via reseller channels - or don't. Google and Microsoft have both had established reseller channels for a long time, but there are still major vendors who only recently (or still haven't..) established this. Slack is a great example - they only sell direct. And companies who use Slack have a tendency to "sprawl" into other SaaS apps that may not have a reseller channel, creating a bit of a snowball effect. Contrast this with companies "bought in" to Microsoft where it's much more common to see them adopt Microsoft Teams and other technologies to avoid that sprawl - and they typically buy via Microsoft partners who can bill them on a single invoice. While we can't force SaaS vendors to acknowledge that customers want a single bill/distributor, we are working on the problem further upstream by creating a marketplace [1] backed by a network of connectivity agents who are expanding into the SaaS world. One point of purchase/bill for connectivity + SaaS (and IaaS) with additional benefits such as management, etc. Even more interestingly, we're covering the developer, distributor, reseller, and customer channels on a single platform. [1] https://www.appsmart.com https://www.appsmart.com

fstopmick 6y ago
Do you have a salesforce?

surfingdino 6y ago

Such companies do exist. They are usually run by friends of the people working in procurement at various companies.

alangibson 6y ago
Sounds like my reseller buddies.

grenoire 6y ago

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 balance. 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.

alangibson 6y ago
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-off for onboarding I bet) or keeping wildly volatile short-term liabilities on their balance.
- uberswe 6y ago
  In Sweden we also have something similar to purchase orders which is common even with B2C and it always bothered me how often it is used compared to the US where credit card was more normal. I think the article brings up a good point, if a startup could figure out the taxes and bookkeeping, set some reasonable margins or costs for the service it could be a really good business. Edit: Sorry, they would handle the POs so that is liability, I guess some kind of verification or legal framework is also needed here.
  - Jugurtha 6y ago
    >In Sweden we also have something similar to purchase orders which is common even with B2C and it always bothered me how often it is used compared to the US where credit card was more normal. Our clients send us purchase orders in Europe, but the context is custom, turn-key, machine learning products developer for large enterprise. We take them by the hand from "I have many problems" to a product their people want to use. We're building our machine learning platform to make that product development faster (data, scheduling training notebooks, automatic tracking, etc.). We also adopted a plugin architecture for product so we can plug functionality and, more importantly, remove functionality to allow clients to discard what they don't need and avoid a product with 2000 buttons and menu items.

lifeisstillgood 6y ago

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 would offer Enterprises a "turn off that Sht" option (at a cost) or b) every purchasing department would add even more hurdles* before you could pay out. Yes, it is hard to buy stuff in a corporate - but it is not a bug its a feature.

alangibson 6y ago
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.
- lifeisstillgood 6y ago
  I quarter agree :-) I have been through (many) purchase processes and they have always been painful. Especially true the first time you try and make a purchase at any large org. I call this "Director Hazing". Being promoted to Director (US company designation) usually involves a year of administrative hell as you have to learn all the horrific systems that have grown up in the company over time. There is a sort of "sink or swim" mentality and once a director gets through it they are selected for being the sort of person who can operate this system (ie responds to emails quickly) - and that tends to work against promoting people who will fix it. Anyway, as I say I reckon 25% of the time management thinks it should fix the problem and 75% of the time "I can work the system and so can anyone else at a certain level - everyone else has not been promoted and so should not get to spend the cash" I still remain convinced the system works as intended. A side note - there was some study I read about a major supermarket chain that used cameras and POS data to rank their checkout workers - and a small revolt from store managers killed the project. The store managers knew who performed best and worst at that part of the job - but that ranking did not fit the ranking for the other intangible parts of the job. And they wanted the flexibility to decide who to fire / keep / promote. And a clear metric would have got in the way. Similarly management can if they want make sure your vendor is set up, your licenses paid for. If it is high enough up their priority tree. And if it is not having a widely hated terrible system is a good excuse to avoid saying no to subordinates...

dvlx 6y ago

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 products like Mulesoft, IIB etc. because we are easily able to augment/extend/enhance

alangibson 6y ago
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

part1of2 6y ago

> Atlassian because they don’t take POs To me that sounds like Atlassian is leaving a lot of money on the table

nautical 6y ago
>lot of money I believe lot of money is a relative term.

encoderer 6y ago

There’s merit here but one challenge is that such a service is just another revolving line of credit for the company. Another credit card. Finance would likely want it locked down as well. Ive had a lot of success shaving hundreds of thousands off aws budgets and my first tactic is always to create mental awareness that every terraform apply is a virtual swipe of the company credit card. In big companies, making it hard for non-executives to spend money is a feature not a bug.

alangibson 6y ago
That's not a tough but to crack. It's pretty straightforward to build a feature that sets limits by team, business unit, etc.
- encoderer 6y ago
  Budgets are important but mindful spending is even more important.

say_it_as_it_is 6y ago

The entire SaaS industry already looks like a single vendor with many products for sale, accessible by search engine. I wonder to what extent managers are defaulting to an AWS provided services just to reduce cognitive overhead (ie. thinking)?

crb002 6y ago

It's even more lopsided. AWS is a short term lending institution, it isn't pay up front.

mtnGoat 6y ago

Sounds 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.

hobs 6y ago
Yeah, telling your customers that they should modernize is a great way to let someone else sell to them.
- cwp 6y ago
  OTOH, telling an entire industry to reorganize to accommodate your internal processes is also a fools errand. Just imagine the dilemma this puts on the growth team: "Hmm, spend 1000x effort to land this one customer or fix an obscure bug in the signup page and get an extra 1000 self-serve customers this month. Golly, I don't know..."
  - npsimons 6y ago
    Seriously, though, GP is correct. Small companies that can adapt and snag these contracts won't push for change because they have a "competitive" advantage, and the businesses they sell to won't change because it's too painful for them. The whole industry isn't being asked to change, small B2B software houses will just keep ticking along, navigating the maze of purchasing to live high on the hog.
  - MattGaiser 6y ago
    The industry has the choice of changing or ever racing ahead of AWS, who can take their potential customers merely by already being in the purchasing database.
- mtnGoat 6y ago
  If the means don't justify the ends, let my competition sell to them... Then it will be adding to their failure, not mine. I do agree with your sentiment though, asking the customer to change is an uphill battle. I have customers with lots of custom billing situations, I loathe then all.

mikikian 6y ago

Sounds like he's asking for a new PaaS (Procurement as a Service).

OliverJones 6y ago

Oh 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...)

alangibson 6y ago
It's not that can't set up a credit card or do ACH, it's that they won't. The reasons usually have to do with financial controlling rules that I can't begin to fathom.
- throw_awy_1 6y ago
  It looks like Atlassian does take POs though. Is there something about the way they (or other SaaS) companies take POs? How do I submit a Purchase Order (PO number) to Atlassian? (https://www.atlassian.com/licensing/purchase-licensing#ordering https://www.atlassian.com/licensing/purchase-licensing#order...) To get started, complete our secure online Quote & Order Form. On the final confirmation page, check the PO number box to add your PO number. The PO number will appear on your quote or invoice (valid for 30-days). If you already have a quote or invoice, you can update the quote or invoice through my.atlassian.com via the Orders tab. Atlassian is happy to reference a PO number on a quote or invoice for your internal tracking and record keeping. However, we do not accept purchase orders as a form of payment nor the terms and conditions commonly associated with purchase orders. We provide fully functional trial licenses for you to use while payment is being arranged. We are able to keep our prices low by offering standard product agreements to all our customers and do not offer commercial credit.

mperham 6y ago

You 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.

alangibson 6y ago
True story: a previous employer would not bother issuing POs for less thank 2000 euro, so we couldn't even think about buying anything that was too cheap

Ennis 6y ago

These 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.

alangibson 6y ago
I don't think marketplace is the metaphor I'm looking for. A single purchasing portal that takes maybe 5% to keep the lights on is more like it. A PayPal or Stripe set up by a SaaS consortium just to remove friction from the industry might be a good approach.

harrisonjackson 6y ago

Extra credit for - team accounts - budgets and rules for new software - password management with security audits and MFA enforcement - automated purchasing during employee onboarding - hardware and other purchase management like laptops and mobile device management

kevincox 6y ago

What is a PO?

OJFord 6y ago
Purchase Order, sort of a 'reverse invoice' used by large companies to manage purchasing from suppliers.

josephfung 6y ago

Isn't that just what https://www.appdirect.com/ https://www.appdirect.com/ offers?

ponker 6y ago

The blog post describes only the billing advantages of the "single vendor" approach like AWS or Microsoft. But the other half of it is much more important, and that's the security/compliance aspect. You know that anything you buy from AWS or Microsoft is engineered to a common set of security / privacy standards, and that whatever those standards are have been audited by governmental customers etc. Of course they're not perfect, but there is a definite increased security risk in having your corporate data sit inside 20 different companies vs. 1.

brundolf 6y ago

So do news sites, so do streaming services, so do (in my opinion) charities. The manual overhead of setting up (and then managing) a bunch of micro-subscriptions is a significant source of friction when it comes to adoption. It raises the barrier of "is it worth dealing with?". Payment providers like PayPal and Apple Pay do a little bit to help you centralize things, but I think there's a ton of improvement left to be made in this area.

knoxa2511 6y ago

The cloud providers are trying to solve this problem - more and more of our customers are purchasing through the marketplace. It allows them to drive down spend commitments to AWS, GCP, etc - it's a pretty good experience all around and enables usage based pricing + easy collections. Which is something all startups hate dealing with.

brianbreslin 6y ago

I would love to see someone start Stripe for POs. I work at a University and navigating the bureaucracy just to pay for Asana was an utter shit show. Especially once the university procurement team learned ANOTHER department was paying for it, and suggested we just use their license... smh. In a similar vein, I often opt for yearly billing even not discounted just to not have to submit receipts and proof of purchases every month for the things we are allowed to purchase.

sscarduzio 6y ago

I own a SaaS and 99% of our customers are huge international corporations. They only buy with PO, and every sale is a massive bureaucratic effort. I hired a freelance account manager to deal with incredible requirements like: - anti money laundering declarations - mandatory company stamp + hand written signatures - supplier enrollment forms (excel+macros) - notary apostilles for incorporation certificates sent across to Russia Software resellers do this as a job, and I thought they are stupid middlemen nobody loves. Actually they are amazing.

golergka 6y ago
Out of curiosity, what kind of SaaS is it?
- sscarduzio 6y ago
  It's not strictly a SaaS, but it's a subscription product based on an open core. https://readonlyrest.com https://readonlyrest.com
m463 6y ago
PO2$$aaS
anhldbk 6y ago
What does PO mean?
- Macha 6y ago
  Purchase Order: https://en.wikipedia.org/wiki/Purchase_order https://en.wikipedia.org/wiki/Purchase_order More important than the PO form is the entire rest of the corporate purchasing process it entails. You send them a quote, they try haggle you down, they might make their internal team send the bid out to multiple vendors for quotes and try to play you all off against each other (and how well you meet the requirements for the actual end user is not a a part of this process, just their checklist which is three degrees removed) they decide what quantities they want to buy, you confirm the price, send an invoice, they'll pay net 30 or net 90 or whatever their purchasing department decides via whatever payment method their department decides and you'll do it because with the bulk order amount and the markup you'll decide is justified for this hassle, the money is too much to refuse.

destory-everyth 6y ago

It’s not just a single point of purchase, big co need to ensure your subcontractors subcontractors subcontractors enforce our policies and control around protection of data, we need to be able to Inspect that whenever our auditors feel like it. The complex issue with SaaS for big co is getting them to demonstrate a good business continuity plan and actually execute tests (your primary building was destroyed ... you own another building with connectivity , hardware just sitting around on ice ready to go right ? ) You have key man dependencies please asses that every 6 months and hire 35 people to cover that 1 KMD and show us your working on how you assess this. If your SaaS is so killer / think it’s a big competitive advantage big co will help you set all this up and guide you to an extent. But in this case this is your first big co and they will make sure your time is totally consumed by our mountain of lawyers , procurement officers, security , it , operations.... but at the same time finance want to check your books to make sure we are not your single customer and that you have a history of making money , check the key peoples backgrounds for any history of fiscal malaise , conflicts of interest blah blah blah. The worst is when. We deal with the vendor negotiate a price the procurement people who have no idea about what it is their purchasing have a kpi on saving big co x % off every piece of paper that passes their desk so they go in at the last mile after pretty much everything is set and pull your pants down (don’t forget to leave fat for this ) And good luck.

bmcahren 6y ago

We've been waiting 90+ days for one of our clients to pay their invoices once we switched from CC to PO + ACH through Stripe. I'm about to just see if we can charge the card for the full three months so we can manually flag the invoices as paid. Terms are net 18 usually. The PO process is awful. We have to fill out forms as a vendor, submit tax information. It's completely unneeded. If your company requires POs for SaaS you need to take a step out of the 20th century.

siddharthadamas 6y ago

That’s a brilliant observation. Something we came across as well and we ended up starting Spendflo.com to solve it :)

NoCanDo 6y ago

Fuck no, get your company to not be dumbasses.