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> Practically everyone who’s paying for software is doing so through an app store And how well's that working for them? • All of the revenue for the thousands

by wheels 15y ago

> Practically everyone who’s paying for software is doing so through an app store And how well's that working for them? • All of the revenue for the thousands of vendors in the Apple App Store together for 2011: $3.6 billion • Oracle's revenue alone for 2011: $36 billion Notice that decimal point there? There's a reason it's in a different place. I don't like the enterprise sales process – being on either side of it, and I have to be on both at times. But the reason I'll do it is because our customers demand it and folks at that level, when a deal closes, pay enough to make it worth it. It's the same on payment methods, actually. We got dragged, grudgingly, by our enterprise customers to allow paying by purchase order / ACH because that's how their purchasing departments expect to do things. It's not like we were going to tell them, "no".

batista 15y ago
• All of the revenue for the thousands of vendors in the Apple App Store together for 2011: $3.6 billion • Oracle's revenue alone for 2011: $36 billion Notice that decimal point there? There's a reason it's in a different place. Yeah. How about because Oracle is a 30 year old business, whereas the Apple App Store is a one year old new market that came out of thin air? What's the non Apple App Store Mac software sales revenue for the same time the Apple App Store is in operation? That'a fairer comparison. Also, how would the Apple App Store revenue be if they followed the Oracle sales process --call us to give you a price, etc? That would also be an interesting number. But the reason I'll do it is because our customers demand it and folks at that level, when a deal closes, pay enough to make it worth it. ie: la la la la, it's how it always been done, we don't need to look at the process, la la la la la, talk to the hand.
- wheels 15y ago
  The app store is 3.5 years old, not one, and has been so successful that the original poster mentioned that "practically everyone buying software does it that way." Nobody is suggesting that the app store should sell software the way that Oracle does. In fact, the point was exactly the opposite: that there's a reason that software is sold differently in different price ranges. And the reason for that is that customers expect it that way. Some vendors may be bold enough to tell their customers to get bent and that if they want to buy their software they have to do it the way the vendor tells them to. Most of them will go out of business as a result. Ignoring your customers is rarely a good way to sell to them. What usually happens is that we see segmentation that's pretty close to what's described in the original post: non-enterprise software is sold via a transparent process and aims for scale by selling to small and medium sized customers. The transparency is a business requirement: you can't invest $10000 of a salesperson's salary into selling something for $99/month. Enterprise sales run with enterprise processes because enterprise customers demand that it work that way. The point here is that these processes aren't ordained by vendors, but by customers, and the economics around the deal size. For vendors that are focused on the enterprise, usually, they're not super concerned about losing the folks on the low end (just like SMB product sales aren't worried about losing enterprise customers). Usually the folks that are frustrated are because they're in one category and trying to buy from the other.
nhebb 15y ago
>> Practically everyone who’s paying for software is doing so through an app store I think that software developers that eat, sleep, drink, breathe the Apple / mobile world need to be careful not to let this define their worldview of the software market. As big as the Apple / mobile market is, it's still just a small piece of the overall pie. > And how well's that working for them? Although I think the premise is wrong, but Al3x has a lot of valid points. There's a huge gulf between app store apps and enterprise products like Oracle. There are still a lot of companies in the B2B market that don't put pricing on their sites - even when their products aren't that expensive. Worse yet, some don't show any viable means of buying their product on the web site - not just "plans and pricing" but no clear "how to buy", etc. The visitor is expected to divine that they need to call the company. When I see a site like that I assume that it's a "if you don't want to contact us, you can't afford us" filter.
- toumhi 15y ago
  I'm always surprised when I see that kind of websites with no clear calls to action. They seem to violate all good landing page optimization guidelines, yet they are multi-million dollar businesses. Are they leaving money on the table by not optimizing their landing pages? Or did the customers learn to expect that kind of websites and already know they just have to call? In this case, would they be put off by a more modern approach? In other words, can the B2C approach be applied to B2B without alienating potential customers? (Some companies do, check HubSpot).
  - onemoreact 15y ago
    It's just another way to maximize revenue. I recently got a Visual Studio Ultimate with MSDN subscription though my company. If I go to http://msdn.microsoft.com/en-us/subscriptions/buy.aspx http://msdn.microsoft.com/en-us/subscriptions/buy.aspx it looks like that's $11,899.00 yet when I looked on our internal site it was ~20% of that of that price. If the actual price is really 20% of that why even list the price? Well most of these sites are designed to sell to billion dollar companies and only a tiny fraction of the people visiting that site have the authority to purchase their product. Ideally, your contact info has value to them, and they trade pricing info for it. But as an upside, you can often start using the software before the sales process finishes. Which is a fantastic end run around the 'approved' > 'negotiated' > 'purchased' process which can take forever at large companies.
jchrisa 15y ago
I just bought a new pm tool for work on iPad first and then the desktop. I chose it because it was developed iPad first, and the Mac version is a follow on. I'm not suggesting I'm typical, just one data point.
InclinedPlane 15y ago
"Shut up and take my money!" applies at both ends of the spectrum. If a hundred thousand people want to give you $10 through an app store, it might make sense to figure out how to make that possible. If one person wants to give you a million dollars using an ACH transfer or through gold doubloons, you should probably figure out how to make that possible too.
- schnaars 15y ago
  I'll take 1 person giving me $1M over 100K giving me $!0 any day.
  - sk5t 15y ago
    Indeed, a sizable chunk of those 100K individual customers are likely going to find a way to nag, review-extort, and support-whittle your $1M down to almost nothing.
  - flannell 15y ago
    Until that 1 person goes elsewhere, then you have no business!
  - arethuza 15y ago
    Have you ever been involved in sales at that level? To say it is painful (on both sides) is an underestimate. I'd rather that $1M revenue was split down into something more like 200 sales of $5K.
    - roel_v 15y ago
      Except that you can't. 5k is above 'discretionary spending' for a drone, but not worth it to convene meetings with upper management, fly in sales people, do an extensive demo/feasibility study, etc. Spolsky wrote a post about it years ago, and I generally found it's true. There is a gap between 'cheap' and 'expensive' for which it's hard to justify the sales expenses. While doing 1M deal is excruciatingly painful, it's not 200 times more painful than doing 5k deals, so in the end I prefer the one 1M.
hessenwolf 15y ago
It seems a rather narrow definition of 'practically everyone'.
chives 15y ago
I agree on the app store vs oracle point. I'll add that it simply appears that these new start-up guys just don't understand B2B sales. They (and I know I am generalizing here) think because they buy iTunes songs and android apps at a store, enterprise level equivalents would be sold similarly. For the most part they aren't, and primary because clients want sales calls and knowledgeable sales people to tell them about their product. Clients don't want to spend 2 weeks looking at a company's website to decide if a Oracle IT solution is right for them, a good sales person will explain what the client wants to know in a fraction of the time (though a good website is paramount to getting the lead in the first place) and act as an unpaid consultant. Later when the company decides to upgrade or change its service, a meeting with the same sale person gives the client a better idea of what option is best for them. Never mind the fact that both companies walk away with a good deal. I see no fault with the way B2B sales currently operate.

by wheels 15y ago

batista 15y ago

• All of the revenue for the thousands of vendors in the Apple App Store together for 2011: $3.6 billion • Oracle's revenue alone for 2011: $36 billion Notice that decimal point there? There's a reason it's in a different place. Yeah. How about because Oracle is a 30 year old business, whereas the Apple App Store is a one year old new market that came out of thin air? What's the non Apple App Store Mac software sales revenue for the same time the Apple App Store is in operation? That'a fairer comparison. Also, how would the Apple App Store revenue be if they followed the Oracle sales process --call us to give you a price, etc? That would also be an interesting number. But the reason I'll do it is because our customers demand it and folks at that level, when a deal closes, pay enough to make it worth it. ie: la la la la, it's how it always been done, we don't need to look at the process, la la la la la, talk to the hand.

wheels 15y ago
The app store is 3.5 years old, not one, and has been so successful that the original poster mentioned that "practically everyone buying software does it that way." Nobody is suggesting that the app store should sell software the way that Oracle does. In fact, the point was exactly the opposite: that there's a reason that software is sold differently in different price ranges. And the reason for that is that customers expect it that way. Some vendors may be bold enough to tell their customers to get bent and that if they want to buy their software they have to do it the way the vendor tells them to. Most of them will go out of business as a result. Ignoring your customers is rarely a good way to sell to them. What usually happens is that we see segmentation that's pretty close to what's described in the original post: non-enterprise software is sold via a transparent process and aims for scale by selling to small and medium sized customers. The transparency is a business requirement: you can't invest $10000 of a salesperson's salary into selling something for $99/month. Enterprise sales run with enterprise processes because enterprise customers demand that it work that way. The point here is that these processes aren't ordained by vendors, but by customers, and the economics around the deal size. For vendors that are focused on the enterprise, usually, they're not super concerned about losing the folks on the low end (just like SMB product sales aren't worried about losing enterprise customers). Usually the folks that are frustrated are because they're in one category and trying to buy from the other.

nhebb 15y ago

>> Practically everyone who’s paying for software is doing so through an app store I think that software developers that eat, sleep, drink, breathe the Apple / mobile world need to be careful not to let this define their worldview of the software market. As big as the Apple / mobile market is, it's still just a small piece of the overall pie. > And how well's that working for them? Although I think the premise is wrong, but Al3x has a lot of valid points. There's a huge gulf between app store apps and enterprise products like Oracle. There are still a lot of companies in the B2B market that don't put pricing on their sites - even when their products aren't that expensive. Worse yet, some don't show any viable means of buying their product on the web site - not just "plans and pricing" but no clear "how to buy", etc. The visitor is expected to divine that they need to call the company. When I see a site like that I assume that it's a "if you don't want to contact us, you can't afford us" filter.

toumhi 15y ago
I'm always surprised when I see that kind of websites with no clear calls to action. They seem to violate all good landing page optimization guidelines, yet they are multi-million dollar businesses. Are they leaving money on the table by not optimizing their landing pages? Or did the customers learn to expect that kind of websites and already know they just have to call? In this case, would they be put off by a more modern approach? In other words, can the B2C approach be applied to B2B without alienating potential customers? (Some companies do, check HubSpot).
- onemoreact 15y ago
  It's just another way to maximize revenue. I recently got a Visual Studio Ultimate with MSDN subscription though my company. If I go to http://msdn.microsoft.com/en-us/subscriptions/buy.aspx http://msdn.microsoft.com/en-us/subscriptions/buy.aspx it looks like that's $11,899.00 yet when I looked on our internal site it was ~20% of that of that price. If the actual price is really 20% of that why even list the price? Well most of these sites are designed to sell to billion dollar companies and only a tiny fraction of the people visiting that site have the authority to purchase their product. Ideally, your contact info has value to them, and they trade pricing info for it. But as an upside, you can often start using the software before the sales process finishes. Which is a fantastic end run around the 'approved' > 'negotiated' > 'purchased' process which can take forever at large companies.

jchrisa 15y ago

I just bought a new pm tool for work on iPad first and then the desktop. I chose it because it was developed iPad first, and the Mac version is a follow on. I'm not suggesting I'm typical, just one data point.

InclinedPlane 15y ago

"Shut up and take my money!" applies at both ends of the spectrum. If a hundred thousand people want to give you $10 through an app store, it might make sense to figure out how to make that possible. If one person wants to give you a million dollars using an ACH transfer or through gold doubloons, you should probably figure out how to make that possible too.

schnaars 15y ago
I'll take 1 person giving me $1M over 100K giving me $!0 any day.
- sk5t 15y ago
  Indeed, a sizable chunk of those 100K individual customers are likely going to find a way to nag, review-extort, and support-whittle your $1M down to almost nothing.
- flannell 15y ago
  Until that 1 person goes elsewhere, then you have no business!
- arethuza 15y ago
  Have you ever been involved in sales at that level? To say it is painful (on both sides) is an underestimate. I'd rather that $1M revenue was split down into something more like 200 sales of $5K.
  - roel_v 15y ago
    Except that you can't. 5k is above 'discretionary spending' for a drone, but not worth it to convene meetings with upper management, fly in sales people, do an extensive demo/feasibility study, etc. Spolsky wrote a post about it years ago, and I generally found it's true. There is a gap between 'cheap' and 'expensive' for which it's hard to justify the sales expenses. While doing 1M deal is excruciatingly painful, it's not 200 times more painful than doing 5k deals, so in the end I prefer the one 1M.

hessenwolf 15y ago

It seems a rather narrow definition of 'practically everyone'.

chives 15y ago

I agree on the app store vs oracle point. I'll add that it simply appears that these new start-up guys just don't understand B2B sales. They (and I know I am generalizing here) think because they buy iTunes songs and android apps at a store, enterprise level equivalents would be sold similarly. For the most part they aren't, and primary because clients want sales calls and knowledgeable sales people to tell them about their product. Clients don't want to spend 2 weeks looking at a company's website to decide if a Oracle IT solution is right for them, a good sales person will explain what the client wants to know in a fraction of the time (though a good website is paramount to getting the lead in the first place) and act as an unpaid consultant. Later when the company decides to upgrade or change its service, a meeting with the same sale person gives the client a better idea of what option is best for them. Never mind the fact that both companies walk away with a good deal. I see no fault with the way B2B sales currently operate.