Comments on: The Knives Your Sales People Should Have

By: Sağlık

Sağlık — Sun, 25 Jul 2010 20:24:29 +0000

no no no ..çok yanlış

By: replcia handbags

replcia handbags — Tue, 02 Mar 2010 13:53:17 +0000

Such a good article, caught my sympathy!

By: martin_edi18731

martin_edi18731 — Sat, 31 Jan 2009 04:50:09 +0000

The IT comment was really more about their insistence on 'owning' the data which isn't an option in our case. Fortunately we sell to marketing people…;-)

By: Has SaaS Killed OSS? | CloudAve

Has SaaS Killed OSS? | CloudAve — Fri, 30 Jan 2009 14:58:49 +0000

[...] The Knives Your Sales People Should Have [...]

By: Brad Feld

Brad Feld — Wed, 21 Jan 2009 21:25:07 +0000

That’s a good example. It’s conceivable that you should still do a license like this under a perpetual model where the customer pays a single payment for a specific number of “uses” or “proofs”. You’d have to build this into the license key which is incremental work (but trivial on a SaaS deployment), but I think you could simulate the same affect. However, I doubt this will be anywhere as easy or logical as in a SaaS model.

By: Mat

Mat — Tue, 20 Jan 2009 22:51:09 +0000

Brad

The subscription vs. perpetual analysis is sound, but missed out one key innovation of SaaS, which is the pay-as-you-use model.

As you point out, perpetual and fixed rate subscriptions are really two side of the same coin, although the ability to cancel a fixed price subscription makes it much more flexible.

At ProofHQ we have gone to market with a fixed rate month;y subscription model. We have different levels of pricing for different profiles of user based primarily on the number of documents that they send for "proofing" each month. All familiar stuff for users of Basecamp, Freshbooks, etc. Of course in a minority of cases we are asked for a more traditional perpetual license, even when we are hosting or managing the service and we don't turn those deals down.

However, what has surprised us has been the number of people who want to buy a "block" of proofs to consume as and when they want. To me this is the most interesting direction that the SaaS payment model is going in – "pay as you consume". I guess the mobile phone companies got there first, then Google with Adwords and Amazon with S3 etc.

They key to maintaining flexibility in pricing models is being able to define a product's "unit of value". In our case "proofs". If you get that right then you can apply it across a wide range of license models without too much conflict or inconsistency.

By: Scott Schnaars

Scott Schnaars — Tue, 20 Jan 2009 16:50:20 +0000

In my company, Socialtext, it is a bit easier. We have a managed appliance that, in 95+% of cases is deployed behind the firewall and licensed in a traditional SaaS model.

While the appliance is installed behind the firewall, as Brad points out, once you stop paying for 'maintenance', there goes support / updates.

By: Brad Feld

Brad Feld — Tue, 20 Jan 2009 15:03:05 +0000

Remember – it’s “licensing / pricing”. So – in this case, the buyer has to pay the maintenance to continue to get the service. If it’s SaaS and they don’t pay the maintenance, the service stops. It’s a different case than desktop software (like Windows XP) where you “can’t turn off the service easily.”

By: Phil Sugar

Phil Sugar — Tue, 20 Jan 2009 14:55:57 +0000

There are four quadrants…two are the norm.

SaaS subscription model, Behind the Firewall perpetual license.

The next one is harder but doable. I'll agree that you can go behind the firewall subscription. In fact, I think its better to start that way, but given you're in a perpetual model and you want to move to subscription ok, get ready to feel the pain from the finance types but doable.

I want to see how you deliver SaaS in a perpetual license. The definition of perpetual is continuing forever. So the organization can buy once refuse the 20% support and continue to use. Just like Windows XP. How does that work?

By: Tim

Tim — Tue, 20 Jan 2009 06:07:35 +0000

We'll I'll just add that Brad and I disagreed on this for about 3 years. He finally won me over about 6 months ago. Sales have gone up as a result. We sell On-Prem and Hosted. We sell 1 year term, 3 year term and perpetual both hosted and on-prem. Sell the way customers want to buy!