Defrag Blog

Selling modern software

by Eric Norlin on Sep.07, 2010, under Uncategorized

Some conversational threads are converging today:

1. In a discussion this morning, I talked through two sales models in the “e2.0″ space — one, wherein non-IT people sign up for accounts, and the vendor then approaches IT about signing up for a comprehensive license; one wherein, the vendor uses more traditional enterprise sales methods to sell directly to IT.

2. Then, I commented on Fred Wilson’s blog about “enterprise software” being a contrarian investment. Fred agreed, but added that they won’t invest in anything where “IT is the gatekeeper.”

Taken together, those threads start to point to something interesting: In the past, enterprise software sales has been a top down, “get IT to buy-in” kind of sale. Increasingly — because of open source and SaaS delivery models — enterprise software sales has become a bottom-up, “well, they’re already using it, so we’d better sign a license” kind of sale.

I first began to notice this back when I was starting/running SaaScon– the sponsors didn’t WANT enterprise IT guys there. They weren’t the customers. They wanted line of business decision makers in HR, marketing, sales, whatever.

It also makes me think that the 25 million that it used to take to start an enterprise IT company is dropping because the structure of the sales channel/force is changing - radically.

The funny thing is, I think that — completely inadvertently — a great majority of the Defrag sponsors use the “bottom-up/grassroots” method. And…all of this is making me really look forward to the Enterprise Irregular sessions on the economics of modern software. ;-)

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