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As an end user of SaaS, I hate having to pay per license and would prefer firm wide licenses without too many contrived restrictions. It’s super annoying when

As an end user of SaaS, I hate having to pay per license and would prefer firm wide licenses without too many contrived restrictions. It’s super annoying when vendors try to price gouge you by restricting number of products / databases / etc. A flat fee approach would be most reasonable to me. I don’t mind paying a bit higher but I don’t want to limit how many users I can give access to or how much of the software we can use! The issue I think is sky high valuations are forcing many SaaS to charge very high profit margins to cover their cost of capital.

Fordec 6y ago
Unfortunately it's basic Darwinism. At first there were a mix of companies that did upfront licenses and service based. But over time, the service based companies had more consistent revenue, lock in and faster customer turn around. Then, with their competitive advantages, they either ran rings around the competitors that didn't or bought them with the bigger profits. These days if you go against that grain, unless you are one of those people who are destined to be a household name due to their wild success and domination of anyone doing SaaS right now, you are accepting that a competitor is going to beat you. I don't want to sell a SaaS to my customers. I don't. But my desire to not be eaten by the competition is greater and the game is the game until the meta changes. But boy do I eagerly await for the day the meta changes so we can start making better products for people. But a system that doesn't rely on VCs and their metrics like CAC, CAGR etc. is a prerequisite which demand consistent quarterly or monthly results that indicate hockey stick trajectories, not instant bounces one month of the year on the back of a flat fee. That is the metrics most are playing to get access to capital. To change this we need a post VC economics. But I don't see where that going to come from.
- abhinav22 6y ago
  Thanks - great to have the perspective on the other side, you have to do what you have to do to survive and as you said, if you don’t play the SaaS game, then you are at significantly more risk because your competitors will.
JackPoach 6y ago
You'll love https://www.bitrix24.com/prices/ https://www.bitrix24.com/prices/ then. CRM, Project Management and Collaboration tools priced exactly how you want, including unlimited plan for $199/mo. I think I've seen only one or two vendors with similar pricing, everything else is per user.
- abhinav22 6y ago
  That’s the type of pricing I like! Hopefully users push more towards that. Might take a while
- arethuza 6y ago
  How sustainable is that though - I've worked places that had thousands of CRM users with lots of integration and storage requirements. I'd be fairly suspicious of a vendor saying they could host that for $99.50 a month. Maybe its possible, but I'd have my doubts. Edit: Part of the basic due diligence in any enterprise considering any software product, but especially a SaaS product, is how likely the vendor is to still be there in a number of years. Unusually low prices tend to make people suspicious of long term viability.
  - JackPoach 6y ago
    I've worked with/for Bitrix24 plenty in the past. The company behind it is 20+ years old. The service itself was launched in 2012. Profitable, self-funded, never needed to raise VC money.
    - arethuza 6y ago
      I wasn't mean to get at them specifically, just to indicate that when you were used to what the high end CRM SaaS companies charge, $99.50 for unlimited users does seem exceptional. Mind you, if they can deliver on that for that price good on them! Edit: I do admit to being a bit suspicious about anything that promises unlimited availability of any resource for a fixed price.
      - 6y ago
yoshyosh 6y ago
As a customer that definitely makes a lot of sense from a pure cost POV, but as a business (depending on the SaaS) they technically are unlocking a ton more value for you as you scale. To not price accordingly feels like it would be bad overall for both businesses. CAC is only increasing as competition grows, the SaaS needs to devote revenue to both marketing and product, successful customers can help fund the SaaS so they can continue to build more value for your business, unlocking again more potential revenue for both sides. If you pay a flat fee, it's possible that your business eventually outgrows the SaaS in some shape/form leading you to switch to a more mature product that charges more. I think this balance is why well aligned value based pricing keeps everyone aligned for the long term.
- abhinav22 6y ago
  Yes it’s a very difficult balancing act, (I assume CAC means Customer Acquisition Cost) and there are a lot of overheads they need to cover. Figuring what the right price is to be competitive but also cover all marketing and other costs is not easy. Of course as a customer I want the best deal for the lowest price, so I guess one should take the view of a customer with a grain of salt unless there are competitors who can beat you on price and adequate quality.

Fordec 6y ago

Unfortunately it's basic Darwinism. At first there were a mix of companies that did upfront licenses and service based. But over time, the service based companies had more consistent revenue, lock in and faster customer turn around. Then, with their competitive advantages, they either ran rings around the competitors that didn't or bought them with the bigger profits. These days if you go against that grain, unless you are one of those people who are destined to be a household name due to their wild success and domination of anyone doing SaaS right now, you are accepting that a competitor is going to beat you. I don't want to sell a SaaS to my customers. I don't. But my desire to not be eaten by the competition is greater and the game is the game until the meta changes. But boy do I eagerly await for the day the meta changes so we can start making better products for people. But a system that doesn't rely on VCs and their metrics like CAC, CAGR etc. is a prerequisite which demand consistent quarterly or monthly results that indicate hockey stick trajectories, not instant bounces one month of the year on the back of a flat fee. That is the metrics most are playing to get access to capital. To change this we need a post VC economics. But I don't see where that going to come from.

abhinav22 6y ago
Thanks - great to have the perspective on the other side, you have to do what you have to do to survive and as you said, if you don’t play the SaaS game, then you are at significantly more risk because your competitors will.

JackPoach 6y ago

You'll love https://www.bitrix24.com/prices/ https://www.bitrix24.com/prices/ then. CRM, Project Management and Collaboration tools priced exactly how you want, including unlimited plan for $199/mo. I think I've seen only one or two vendors with similar pricing, everything else is per user.

abhinav22 6y ago
That’s the type of pricing I like! Hopefully users push more towards that. Might take a while
arethuza 6y ago
How sustainable is that though - I've worked places that had thousands of CRM users with lots of integration and storage requirements. I'd be fairly suspicious of a vendor saying they could host that for $99.50 a month. Maybe its possible, but I'd have my doubts. Edit: Part of the basic due diligence in any enterprise considering any software product, but especially a SaaS product, is how likely the vendor is to still be there in a number of years. Unusually low prices tend to make people suspicious of long term viability.
- JackPoach 6y ago
  I've worked with/for Bitrix24 plenty in the past. The company behind it is 20+ years old. The service itself was launched in 2012. Profitable, self-funded, never needed to raise VC money.
  - arethuza 6y ago
    I wasn't mean to get at them specifically, just to indicate that when you were used to what the high end CRM SaaS companies charge, $99.50 for unlimited users does seem exceptional. Mind you, if they can deliver on that for that price good on them! Edit: I do admit to being a bit suspicious about anything that promises unlimited availability of any resource for a fixed price.
    - 6y ago

yoshyosh 6y ago

As a customer that definitely makes a lot of sense from a pure cost POV, but as a business (depending on the SaaS) they technically are unlocking a ton more value for you as you scale. To not price accordingly feels like it would be bad overall for both businesses. CAC is only increasing as competition grows, the SaaS needs to devote revenue to both marketing and product, successful customers can help fund the SaaS so they can continue to build more value for your business, unlocking again more potential revenue for both sides. If you pay a flat fee, it's possible that your business eventually outgrows the SaaS in some shape/form leading you to switch to a more mature product that charges more. I think this balance is why well aligned value based pricing keeps everyone aligned for the long term.

abhinav22 6y ago
Yes it’s a very difficult balancing act, (I assume CAC means Customer Acquisition Cost) and there are a lot of overheads they need to cover. Figuring what the right price is to be competitive but also cover all marketing and other costs is not easy. Of course as a customer I want the best deal for the lowest price, so I guess one should take the view of a customer with a grain of salt unless there are competitors who can beat you on price and adequate quality.