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In the common case, selling someone $50,000 of licenses is a $50,000 win for the company. That actually sounds like a very uncommon case. Even fully client-sid

In the common case, selling someone $50,000 of licenses is a $50,000 win for the company. That actually sounds like a very uncommon case. Even fully client-side software has variable costs in the form of support costs. Support costs aren't relevant to your parent's example, but they do imply another misalignment of incentives. If a salesperson's commission is based on revenue alone, she'll just as soon sell to a costly, high-maintenance customer as to a profitable, low-maintenance one.

tptacek 15y ago
This is also a wrinkle that comes up managing sales organizations, which is why sales account managers often get different comp rates for different products. Again, just two issues I have here: (1) Dev incentive comp and sales incentive comp aren't particularly comparable. (2) Huge compensation for the best sales managers is an economic reality, not a philosophical issue, and if you're not going to compensate variably, you're shifting a lot of risk from the sales manager back onto the company.