[HN Gopher] Is it just me that feels stuck in annual SaaS Contra...
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Is it just me that feels stuck in annual SaaS Contracts?
SaaS contracts have all been quite the same for far too long,
specifically, always requiring 12 month minimum commitments.
Having worked at companies big and small, I've experienced a range
of issues with this lack of flexibility. Would love to hear if the
community has as well, and if so, any ways around feeling "stuck"
in a contract? To start the discussion, here are some issues I've
had: 1. The software doesn't meet expectations, or a feature is
missing. Forced to twist things around and spend my eng. time
fixing gaps 2. Roadmaps change. 6 months after buying a tool, we
realize it's not solving for a high priority project / challenge
3. A competitor emerges that seems far better suited to my needs
better than the current vendor. We all know how quickly solutions
pop up, especially in the martech space 4. Implementation is a
mess, and an inflection point is reached where the cost of
continuing to implement will lead to negative ROI. This has been a
super tricky spot for my teams! 5. At scrappy companies, 12 month
commitments are a big challenge from cash flow and risk factor
perspective What experiences have you all had?
Author : jas194
Score : 6 points
Date : 2021-02-21 21:42 UTC (1 hours ago)
| pedalpete wrote:
| Can you give an example of some of the services you are using
| where you are seeing these problems?
|
| Perhaps you shouldn't be purchasing a 12 month advanced contract,
| instead of going month to month which would solve many of your
| issues.
|
| Or perhaps you don't need all the shiny-newness of every new
| services?
|
| Maybe your business is different than ours, (or any business I've
| worked at in the past), but from my experience, we pick a tool -
| MailChimp for example. Does it have every feature of every other
| mail service? No. Does it do 90% of what we need? Yes. What about
| the other 10%? Well, does some feature that MailChimp doesn't
| have provide a significant improvement to our business? If so,
| then you need to have it. Do you build it yourself? Find another
| supplier? Or, more likely, it doesn't have a HUGE impact, and you
| can figure out how to make things work.
|
| I'd be curious to understand what is so unique about how your
| business is using these services that you are experiencing this
| problem.
|
| Or, are you looking for a problem to solve and this is how you
| posed the question?
| jas194 wrote:
| Great perspective. ESP, analytics vendors and BI tools are a
| few of the categories where "usage' has forced me into licenses
| that require annual subscriptions. Seems many of those
| companies do offer month to month options, but those are
| typically situated for low volume levels (emails/month sent, #
| of monthly API calls, etc.).
|
| Personally, the biggest pain I've had is around poor
| implementations and core missing features that are only
| realized during implementation (some of my projects have had
| tricky technical & privacy requirements). In all those cases we
| either made do or spent far more time than estimated in
| building workarounds.
| aksss wrote:
| You're not alone. I can justify it more for a LoB platform app vs
| something like a user's Acrobat license. Adobe is perhaps the
| single worst software company I've ever dealt with.
| jas194 wrote:
| As in if you buy 50 acrobat licenses and 6 months later you
| only need 30?
| JMTQp8lwXL wrote:
| Everything is negotiable, including contract length. Reasonably,
| you should expect a higher monthly price in exchange for
| flexibility.
| jas194 wrote:
| Interesting. I've found that for some earlier stage startups,
| but best in breed tend to have annual contracts as a non
| negotiable. Payment terms maybe, but I'm still contractually
| obligated for 1 year from my experience
| darrenwestall wrote:
| Don't ask for a shorter term, instead ask for a break clause
| to be added on the 3rd month that can be exercised for any
| reason.
|
| They still have a 12 month contract, but you know you can
| walk away with 30 days notice in month 3 if implementation is
| poor.
|
| That's meeting in the middle and usually accepted by most
| businesses if you push.
|
| If they say they risk not making a profit if you leave, offer
| to pay a setup fee that is entirely refunded if you stay past
| the 3rd month.
|
| It means you'll lose some more money if the implementation
| goes bad, but not as much as the whole 12 month term.
| jas194 wrote:
| Super interesting I've never heard of the setup fee ask --
| great perspective. Will definitely use that moving forward
| x0x0 wrote:
| That's essentially a POC. Be prepared for many vendors --
| including the company I work at -- to refuse, at least for
| most prospects.
|
| The reason is some mix of 1. we have real onboarding /
| startup costs, and those costs are frontloaded; 2. like
| many saas companies, we don't make much money on the first
| year; 3. if a prospect can't commit, it's a sign that
| implementation is highly likely to fail. We require work
| and resources from the customer to make this succeed. To
| use examples you've given elsewhere, an ESP requires
| training, engineering to import workflows, creation of new
| mail rules, etc. An annual contract is a component of our
| executive buyer's leverage to hammer through the work to
| realize value from us.
|
| What OP may be able to make happen is a POC with written
| success criteria. Be prepared for vendors to be hard asses
| about the success criteria however. We refuse these for
| small (enterprise small) contracts.
|
| OP should consider that perhaps their vendor selection
| process sucks? Or maybe -- if they're a high enough
| contract value -- getting references from other customers?
|
| Note also that people here decrying annual -- or multiyear
| -- contracts will be the first to scream if a vendor raises
| prices. Which is absolutely fair play if a customer doesn't
| want an annual or multi-year contract. A customer's right
| to alter a deal with 30 days notice is a vendor's right to
| do the same.
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