5 ms·

Much of this resonates with my experience in big organisations - but generally bad memories surface, not good ones. Enterprise software is like toilet paper in

by com 17y ago

Much of this resonates with my experience in big organisations - but generally bad memories surface, not good ones. Enterprise software is like toilet paper in centrally-planned economies such as the old eastern bloc: substandard, rationed, barely functional, ugly and grey, and sometimes leaves you bleeding from the related orifice. I'd be interested in hearing about transformational enterprise software marketing, where all these pricing and sales practices - which range from annoying to downright disgusting if you're a customer - are turned on their head. Is anyone doing this and care to share their story?

arihelgason 17y ago
We're doing it, having built an enterprise web app. Our goal is to make it accessible enough that buyers can come to us and sign up without having to go through a cumbersome consultative selling process. Pricing is kept as transparent as possible. Does it work? Having launched very recently it's too early to call. A couple of observations: - Buyers aren't used to the self-service model. The need may be pressing in a few cases. But if you rely on buyers being desperate and seeking you out, you'll limit yourself. Good salespeople will identify the need before the buyer does. - Direct sales are expensive. As long as we're doing them, their cost & the longish sales cycle must be accounted for in pricing. Often it's the internal cost of switching (moving from legacy systems, retraining staff, etc.) rather than the price tag that discourages buyers. Old-style consultative selling can do an excellent job of working through those issues. This is especially pertinent for small companies that don't have in-house IT staff.
- edw519 17y ago
  Wow, arihelgason, looks like you guys are doing great work! Nice name, cool web site, pricing & features right up front. Only problem, the video crashed my browser, and I couldn't find screen shots any other way. Keep up the good work.
mattculbreth 17y ago
We tried, and it didn't work for us. Customers reverted back to normal behavior, as did we. Plus, investors (with no exception) all told us it wouldn't work, that customers were going to continue buying enterprise software just as they had been.
- com 17y ago
  Can you say what you tried and what sort of response you had? Was it pricing model, sales approach or transparency? Was your product aligned with your marketing and sales approach (ie more like consumer-grade software which is a bit shiny and nice to use with simple things being easy and hard things being possible) or the grey-clunky-and-feature-rich traditional sort? Were you doing SaaS (like the World on a Hangar guys) or more traditional software-on-a-dedicated-box-or-three?
  - mattculbreth 17y ago
    We were doing a Business Intelligence app as a service, mixing it with social stuff. Was (and is) cool. Tried to originally pitch it as ~ $50/user/month, but it never really sank in to a customer's mind. When we starting describing it as an appliance for $X flat fee, we got eyes opening. When we then said we'd sell it just like Business Objects, multiple $100k / per site installation, it was like we started speaking English.
    - jpwagner 17y ago
      Did you consider an AppExchange App and piggybacking off Salesforce? Also remember that the larger prospects are going to be more "old-school", so aim for the small early adopters.
    - wizard_2 17y ago
      Not to me unfortunately. Can you explain some of those terms? I googled around, but how is Business Objects sold?
akeefer 17y ago
I work in enterprise software, and we have a fairly traditional sales and pricing model from what I know (a fair one, but nothing ground-breaking, aside from the fact that most of our licenses are yearly instead of perpetual). There are two things to consider. First of all, as soon as you price as SaaS, you're seen as a cost center to be minimized, and you'll be able to charge far less even though you're providing a more valuable service by both developing the software AND running the IT. So ironically, it costs you more, and you can charge less for it. That just seems to be the way people evaluate these sorts of things: someone that would pay $500k per year for the license would probably balk at $500/user for 1000 users. Think of it as akin the app store effect: people are conditioned to SaaS being (relatively) cheap, but are used to enterprise software being expensive, so just like people expect iPhone apps to be irrationally cheap, they expect SaaS to somehow be cheaper for them than just buying the stuff. Secondly, the software license is a small, small portion of their actual TCO of the software. A big company laying out $1 million a year for a software license might be spending 10x that in total to implement and integrate the system, do any necessary data extractions and transformations, train up new users, buy new hardware, etc. I think about the best you can hope for is an enterprise vendor that delivers software that actually works and that doesn't price gouge you for doing it.
- christofd 17y ago
  Very interesting stuff!
absconditus 17y ago
I think Atlassian is a good example of what you are looking for. They certainly have sales people, but you can buy licenses on their website. Their product pages seem designed to provide one with useful information instead of useless marketing babble. They provide free trials for their products that don't require that you talk to anyone. Their development process is quite transparent. They even provide source code to paying customers (again without having to contact them).

by com 17y ago

arihelgason 17y ago

We're doing it, having built an enterprise web app. Our goal is to make it accessible enough that buyers can come to us and sign up without having to go through a cumbersome consultative selling process. Pricing is kept as transparent as possible. Does it work? Having launched very recently it's too early to call. A couple of observations: - Buyers aren't used to the self-service model. The need may be pressing in a few cases. But if you rely on buyers being desperate and seeking you out, you'll limit yourself. Good salespeople will identify the need before the buyer does. - Direct sales are expensive. As long as we're doing them, their cost & the longish sales cycle must be accounted for in pricing. Often it's the internal cost of switching (moving from legacy systems, retraining staff, etc.) rather than the price tag that discourages buyers. Old-style consultative selling can do an excellent job of working through those issues. This is especially pertinent for small companies that don't have in-house IT staff.

edw519 17y ago
Wow, arihelgason, looks like you guys are doing great work! Nice name, cool web site, pricing & features right up front. Only problem, the video crashed my browser, and I couldn't find screen shots any other way. Keep up the good work.

mattculbreth 17y ago

We tried, and it didn't work for us. Customers reverted back to normal behavior, as did we. Plus, investors (with no exception) all told us it wouldn't work, that customers were going to continue buying enterprise software just as they had been.

com 17y ago
Can you say what you tried and what sort of response you had? Was it pricing model, sales approach or transparency? Was your product aligned with your marketing and sales approach (ie more like consumer-grade software which is a bit shiny and nice to use with simple things being easy and hard things being possible) or the grey-clunky-and-feature-rich traditional sort? Were you doing SaaS (like the World on a Hangar guys) or more traditional software-on-a-dedicated-box-or-three?
- mattculbreth 17y ago
  We were doing a Business Intelligence app as a service, mixing it with social stuff. Was (and is) cool. Tried to originally pitch it as ~ $50/user/month, but it never really sank in to a customer's mind. When we starting describing it as an appliance for $X flat fee, we got eyes opening. When we then said we'd sell it just like Business Objects, multiple $100k / per site installation, it was like we started speaking English.
  - jpwagner 17y ago
    Did you consider an AppExchange App and piggybacking off Salesforce? Also remember that the larger prospects are going to be more "old-school", so aim for the small early adopters.
  - wizard_2 17y ago
    Not to me unfortunately. Can you explain some of those terms? I googled around, but how is Business Objects sold?

akeefer 17y ago

I work in enterprise software, and we have a fairly traditional sales and pricing model from what I know (a fair one, but nothing ground-breaking, aside from the fact that most of our licenses are yearly instead of perpetual). There are two things to consider. First of all, as soon as you price as SaaS, you're seen as a cost center to be minimized, and you'll be able to charge far less even though you're providing a more valuable service by both developing the software AND running the IT. So ironically, it costs you more, and you can charge less for it. That just seems to be the way people evaluate these sorts of things: someone that would pay $500k per year for the license would probably balk at $500/user for 1000 users. Think of it as akin the app store effect: people are conditioned to SaaS being (relatively) cheap, but are used to enterprise software being expensive, so just like people expect iPhone apps to be irrationally cheap, they expect SaaS to somehow be cheaper for them than just buying the stuff. Secondly, the software license is a small, small portion of their actual TCO of the software. A big company laying out $1 million a year for a software license might be spending 10x that in total to implement and integrate the system, do any necessary data extractions and transformations, train up new users, buy new hardware, etc. I think about the best you can hope for is an enterprise vendor that delivers software that actually works and that doesn't price gouge you for doing it.

christofd 17y ago
Very interesting stuff!

absconditus 17y ago

I think Atlassian is a good example of what you are looking for. They certainly have sales people, but you can buy licenses on their website. Their product pages seem designed to provide one with useful information instead of useless marketing babble. They provide free trials for their products that don't require that you talk to anyone. Their development process is quite transparent. They even provide source code to paying customers (again without having to contact them).