Haut Tech

Pricing services – how do you do it? Is there a rational process? Can you tie it to value? Cost? Developing a price is one of trickiest parts putting a new service online. Prospective customers have to believe the value can be realized and existing customers must find the value exceeds the subscription. A monthly subscription is easier for prospects to swallow but a yearly provides a bigger hit for cash flow and maybe higher retention. Which is better in the long run?

In this article we’re picking up where we left off in Part 1 on our expansion of the podcast we did with Steve Plunkett, CTO of Servitizer and our panel of industry experts – Luis Aburto, CEO of Scio Consulting, Mikael Blaisdell of MBlaisdell & Associates and Lincoln Murphy of Sixteen Ventures. If you haven’t read the first part of our series already – please start there – because the background for the conversation is there.

The question I pose in the title of this article is the theme of the podcast we did this month for Haut Tech Conversations. It turned out to be quite a conversation and you can download it and listen to it in its entirety here. Our panel and guest brought up so many excellent points that I’m going to take the time to summarize and extend them in this “post interview” so they are not lost.

This month on Haut Tech Conversations we kick off our series of best practice shows with a look at the core feature of SaaS, Cloud and on-demand applications – Service. As we explored in our last article, we’re going to discuss how current vendors are dealing with their service offerings, what is often lacking, and what is on the part of the vendors and the industry as a whole.

Although in reality, business services provided through the Internet are nothing new, the number and breadth of services now available is certainly worthy of note. As a Gartner report recently noted – we are most likely at the peak of the hype cycle which in “Gartner speak” leads to the “slope of enlightenment” and eventually to mainstream adoption in the enterprise.

There has been a lot of ink wasted on “Best Practices” for SaaS vendors. From my point of view, most of them have been either self-serving (use our services, platform, secret sauce) or suitable only for framed embroidery beside your desk. We’re going to waste some more….

A lot has been said about what Software as a Service is and is not – and we’ve been part of the noise. I really feel however there is something bigger going on. There is a tsunami coming and SaaS is only one of many waves.

I really enjoy working with entrepreneurs – helping them flesh out their ideas and making them successful. But too often I have to ask them – “What is going to make someone look at your product? How will they find it?”

As anyone who follows me knows – I use Twitter and TweetDeck to watch the “virtual conversations” about SaaS happening around the ‘net when I can. Today some time was freed-up by a conference call that was delayed so I fired up TweetDeck and took a look around. Imagine my surprise when I read a meme had started around a blog post touting single-tenancy for enterprise SaaS applications.

We’ve given a couple of webinars recently with our partners Apprenda (archived copy here) and OpSource focused on the key issues ISVs need to consider when developing a SaaS product. One of the areas we covered that received a lot of interest was “Platform as a Service” – PaaS and what it can bring to a SaaS product development project.