The enterprise sales model is dead

Enterprise sales is shifting to try-before-you-buy models that favor open source and SaaS at the expense of cumbersome proprietary technology.

It's perhaps no secret that the enterprise sales model is broken. Software-as-a-Service (SaaS) and open source have picked the lock on the enterprise, enabling CIOs to try before they buy, disrupting the old model of paying far too much for demoware and roadmap dreams.

It's a welcome shift of risk from the buyer to the vendor, as Geva Perry highlights:

We're now witnessing an increasing trend of bottom-up sales. A casual decision made by developers on a day-to-day basis, not a grand strategy laid out by the CIO. Try-and-buy is the norm, and so are subscription payments and other models that take off the financial burden from the customer and places it on the vendor.

But it's not only a matter of a shift to subscriptions, as CMS Watch's Kas Thomas details: CIOs want pricing greatly simplified:

These days, buyers of enterprise software are looking for simplicity -- simplicity in licensing, simplicity in accounting, simple APIs, uncomplicated UIs. If IT experts have learned anything in the past five years (years that have seen fast/simple technologies like Ruby on Rails, REST, and AJAX overturn a lot of apple carts), it's that complexity is costly. And in the current economic environment, there's no room for excess costs.

Open source provides that simplicity. It enables enterprises to pay for only the value they need, something which Red Hat has been highlighting lately . SaaS also provides this simplicity, though it leaves out the customer freedom that open source affords.

In either case, however, they demonstrate where software sales are going: smaller, incremental deals rather than big upfront commitments based on little more than slides and vague promises.

Follow me on Twitter at mjasay.

Tech Culture
About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.


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