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Christian currently serves as Manager of Product & Demand Management at Bechtel Corporation, working in a niche position between the business and technology delivery teams to help identify opportunities to drive worldwide innovation in the mobile and cloud computing areas. Prior to this, Christian was Principal Technology Architect at Manager of Global Systems Engineering at Bechtel. Having gained hands-on experience in 15 different countries designing and managing complex IT environments in support of worldwide project execution, Christian brings a wealth of enterprise experience and led a team that architected and deployed one of the world's first true private cloud infrastructures. Christian is one half of The Loose Couple Blog team and his disclaimer can be found here.

2 responses to “Call For Pricing”

  1. Ali Pocketwala

    Hello,

    The example given in your post assumes that the licensing model is per user. For something like storage this is probably the wrong licensing model. It would be better if the price calculated was not per user but per GB of storage and the amount of bandwidth used.

    This would make the model quite cost effective on any scale. From a one man shop to a 15,000 user enterprise.

    Ali

  2. Alan Berkson

    Hi Christian,

    You put in words something that, I think, is bothering a lot of people.

    I think the analog you’re looking for is traditional outsourcing. In an outsourcing deal, there is always a “ramp up” phase — no outsourcing company has the capacity sitting around to take on an enterprise deal. It’s too costly to have idle capacity.

    The challenge here is SaaS companies can’t have infinite capacity available, just waiting for an enterprise customer to come along. So they hedge their bets. And some of them haven’t built up enough customers to realize the economies of scale they have built into their pricing models. So they have to play an “if we build it, they will come” game, which carries risk.

    The other analog to outsourcing is that outsourcing is not always an obviously cheaper solution. It represents an opportunity to realign costs (CapEx to OpEx) or finding a partner who can do what you need better than you can do it yourself.

    Bottom line: SaaS *is* outsourcing. It’s not like the traditional enterprise software model. Signing up 15,000 seats of *anything* is NOT trivial. So, calling for pricing makes sense to me.

    Alan Berkson
    Intelligist Group