10 ms·

Spot on. As an example of just how ridiculous it gets, we recently drafted an RFP for a solution for licensing our custom-made software to our customers and ha

by thematt 15y ago

Spot on. As an example of just how ridiculous it gets, we recently drafted an RFP for a solution for licensing our custom-made software to our customers and had a vendor come in with their solution. When it came time to discuss pricing, their response was "we charge based on the amount of revenue you'll be getting from the software...so just tell us how much money you're going to make from your software and we'll get a quote over to you." Of course we told them to take a hike, but not before speaking with their other large customers who actually agreed to this model. It's frustrating to be sure, but also completely expected at the enterprise level.

Nrsolis 15y ago
Of course it's expected! When you have a solution that is going to make a huge amount of money for some other organization, you'd like to capture some of that upside as well. Did you know that HBO prices it's channel lineup to the CableCo's at 50% of whatever they sell it for -or- $minimum_price_per_subscriber. Enterprise software is a whole different game and blog posts like these dont fully capture the wide range of customers in the enterprise space OR the WIDELY varying levels of technical acumen that they possess. YOU might be able to take an executable and integrate it into your systems just fine, but the IT-shop at the local car dealership down the road probably doesn't. They'll happily pay for the handholding. I guess I just find it amusing when a startup gets frustrated by the software business. If you think their sales process is cumbersome or opaque, that's probably a clue that you're not their target customer.
- einhverfr 15y ago
  I think the reason why it is a diferent game is overlooked in blog posts like this. The apps that you purchase from an app store, whether brick and mortar or online, are discrete utilities with completely standardized finctions such that the market can be reduced to only a few sizes. Enterprise software is a different game because that asumption no longer applies. Instead ypu have software that a lot is riding on, and it must be matched to the business.
aidenn0 15y ago
I don't see what's wrong with this. If I have something that can make you $100M, why shouldn't I sell it to you for more money than if it would make you $100k?
- thematt 15y ago
  As a vendor who's selling a single component, you don't know that and any sane company is not going to reveal to you how much money they're making from a proprietary product.

by thematt 15y ago

Nrsolis 15y ago

Of course it's expected! When you have a solution that is going to make a huge amount of money for some other organization, you'd like to capture some of that upside as well. Did you know that HBO prices it's channel lineup to the CableCo's at 50% of whatever they sell it for -or- $minimum_price_per_subscriber. Enterprise software is a whole different game and blog posts like these dont fully capture the wide range of customers in the enterprise space OR the WIDELY varying levels of technical acumen that they possess. YOU might be able to take an executable and integrate it into your systems just fine, but the IT-shop at the local car dealership down the road probably doesn't. They'll happily pay for the handholding. I guess I just find it amusing when a startup gets frustrated by the software business. If you think their sales process is cumbersome or opaque, that's probably a clue that you're not their target customer.

einhverfr 15y ago
I think the reason why it is a diferent game is overlooked in blog posts like this. The apps that you purchase from an app store, whether brick and mortar or online, are discrete utilities with completely standardized finctions such that the market can be reduced to only a few sizes. Enterprise software is a different game because that asumption no longer applies. Instead ypu have software that a lot is riding on, and it must be matched to the business.

aidenn0 15y ago

I don't see what's wrong with this. If I have something that can make you $100M, why shouldn't I sell it to you for more money than if it would make you $100k?

thematt 15y ago
As a vendor who's selling a single component, you don't know that and any sane company is not going to reveal to you how much money they're making from a proprietary product.