Alan Gibson

Alan Gibson

Chewing through the 'net

© 2019

SaaS Needs a Single Point of Purchase

The unassailable advantage that big cloud providers like AWS and Azure have over the rest of the SaaS industry isn’t their quality or pace of innovation; it’s that they’re a single point of purchase for a variety of services. If there was a single vendor that large corporations could contract with and pay for SaaS, the big cloud providers market share would have hit its peak.

I can’t overstate the importance of purchasing mechanics in the decision of what SaaS to use inside large corporations. Because of the arcane and complex purchasing requirements you run into, the simple act of buying software is incredibly difficult and time consuming. People who’ve never worked in a BigCo often don’t realize what an unspeakable nightmare it can be. Because, you see, one does not simply put it on the credit card.

A Series of Unfortunate Events

I once spent 5 months licensing Jira. We first had to get a quote, even though it’s fixed price, because Purchasing’s rules said you have to have a quote. After we got the quote, we realized we had no way to pay Atlassian because they don’t take POs and we didn’t pay any way but PO. Putting software on your corporate credit card was explicitly forbidden. So we had to engage a reseller to act as an intermediary for no other reason that they could pay with a credit card. Of course they then had to get another quote that eventually expired due to their general incompetence. Rinse and repeat for several more months until we finally got access.

We never licensed another SaaS product, though we had plenty of budget for it. Anything we need, we made it work on AWS tough we’d rather not have the maintenance hassle. We use open source when we’d be willing and able to license a tool simply because no one can bring themselves to relive the Jira nightmare.

A Solution

The SaaS industry needs is a go-to biller where teams inside large corporations could license software under a standing PO. To the company, the entire SaaS industry would then look like a single vendor with many products for sale (just like AWS). Teams would no longer have to think long and hard about whether some new SaaS tool was worth putting the effort in to license, because I can tell you the answer usually ends up being ‘Buh, just make it work with AWS.’

I know there are already aggregators like App Sumo. However, they tend to be based more around bargains. Large companies will certainly take a deal, but it’s not a major driver for them. We paid that reseller I mentioned an extra 25% just to use their Visa card.

Obviously this is a big ask. It would require a lot of major players to sign on before even launching. Maybe a non-profit SaaS consortium could make it work. What do you think? Madness or genius?

Hacker News Discussion Thread