

Ask HN: A big company wants an on-premise license of our SaaS app - tmcz26

We are an early stage startup with a B2B SaaS service. It&#x27;s basically an API and a Web App people can log in and pull reports. We bill per API request.<p>A big company approached us wanting to license our app on-premises. They claim it&#x27;s a security concern and they never use SaaS services, preferring to host everything on their own datacenter.<p>This is a really big customer, both in terms of money and display&#x2F;portfolio. But there are a lot of DevOps implications like updates, new features, possibly different code base and teaching them the nuts and bolts of hosting our app.<p>Should we do it? If so, what should be keep in mind? If not, how can we justify this to us and the stakeholders?
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eschutte2
I did this last year. Just figure out how much it will cost you to package
things up, write out explicitly what will be your responsibility (maybe
bugfixes, updates, whatever) and what will be theirs (keeping the server
running, backups, etc).

Expect to spend three or four times longer than you think you should dealing
with their IT department.

Make sure you charge a healthy amount for all this because it will take more
resources than you think on your side.

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brd
This is solid advice. I can't emphasize how important it will be to clearly
define ownership.

One of the main initiatives of my current role is to carve out
responsibilities between a company and its infrastructure support partner, it
tends to not be a pretty process. I recommend you land grab whats required to
properly maintain the app otherwise you'll be reactively accountable for
adapting to a changing environment as they update OS, antivirus, etc. The more
you can black box a particular VM from the rest of their IT organization, the
less headache you'll encounter.

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jasonkester
This is pretty common. I field a half dozen requests like this a year for
Twiddla. Very few of them pan out to actual deals.

A good plan to avoid wasting your time is to give them a ballpark figure up
front for what it will cost to make this happen. That figure should not be
less than six figures if it involves any significant effort on your part.

If you've already packaged everything up, and it really is as simple as
delivering a VM image, you might only quote them 20X - 100X the retail price
of your most expensive subscription plan. Naturally, this will be an annual
contract, with the first year paid in advance and a fair amount of lead time.

Keep in mind that your email outlining this will typically be the last contact
between you and the customer, since they're often simply middle manager types
with an expectation that the price will be the same as your "Big Customer"
subscription level, except that it will somehow magically run behind their
firewall. Your mail will simultaneously give them a heart attack and correct
their understanding of Enterprise licensing. If they do engage after that, you
can start your Enterprise Sales cycle.

Good luck.

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jamescrowley
When my startup launched in the B2B finance space a few years ago, we were
SaaS - but faced the same dilemma. Our first customer wanted on-site for
security reasons, and we needed the money, so said yes.

A week or two after signing the contract, they said they couldn't get the
hardware after all and could we go hosted instead. I look back at that moment,
and thank my lucky stars. Now 2 1/2 years later we would never offer on-site
as an option.

Be sure of what you're getting in to. Will they allow automated deployments
with updates to your appliance (as that's essentially what it is). Will you
need permission to access it? How will you support users accessing it? Often
those same 'security' reasons apply. And then you'll find yourself stuck in
the old model of yearly release cycles, supporting old versions and all kinds
of pain.

Think long and hard and be 150% sure it is worth it.

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petervandijck
You can say YES, and:

\- we'll start with a 2-week discovery phase, at $225/hour, in which we work
with you to see how all the details would work etc.

\- once implemented, we charge an annual license of $XX,XXX, and we're
available for consulting for $225/hour.

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mobiplayer
Hey,

Do they consider having it hosted on a private cloud environment? So you guys
still control the systems while they can access it securely (i.e. VPN tunnel
between their premises and your cloud servers).

The difference with your current offering is that this "instance" of your APP
won't be shared with anyone else and you can land a nice maintenance contract,
plus keep everything under your control.

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AustinDizzy
I think the reason why the company wants it hosted in-house is primarily so
the data never leaves their own hardware. Even if a completely new and private
instance was brought up and hosted somewhere external of the company, it would
still be hosting some of their data which could compromise business operations
or infrastructure security should any of the data be ops critical.

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logn
> implications like updates, new features

They might be understanding if you told them there would not be updates or new
features aside from critical security patches. When they're desperate for new
features 10 years from now, dispatch a team of on-site consultants to help
them upgrade.

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jakozaur
I would probably consider it, but put a really premium price and make clear
that they will get substantial discount if they choose SaaS version.

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geoffbrown2014
Can you build and a deliver a box in a U form factor that you can setup a
service contract around?

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general_failure
Yes, go for it. Every other SaaS has an on-premise license - github, for
example.

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jamescrowley
Once you have a battle-hardened product with your key features ironed out -
absolutely. I'm pretty sure GitHub didn't launch with an MVP on-premise
product, however. Obviously do-able but you can't help but increase friction
in the early days of building out your product if you're following SaaS for
your other customers.

