This is one of the fundamental insights of software pricing, partially because software is so systemically overpriced that all prices certain decision makers can authorize are so below the value that they round to zero.
Over a timescale of decades perhaps companies should start thinking “OK, maybe we need to allow e.g. engineering managers to solo approve a vendor for $100k given that they can trivially spend that in an eng meeting and that any two of their reports could do it with API call.”
But the adaptation for B2B software companies in the present is to aggressively probe for where breakpoints are in process around payment and charge a dollar below the breakpoint, sometimes doing spreadsheet math to justify that on a unit cost basis.
“How can an eng manager spend $100k?”
Eng manager oversees 5 to 8 highly compensated professionals. $250k not a bad estimate for fully loaded cost; call it $20k a month to make math easy. $5k an eng week.
One two week sprint is $50k to $80k.
Eng manager oversees 5 to 8 highly compensated professionals. $250k not a bad estimate for fully loaded cost; call it $20k a month to make math easy. $5k an eng week.
One two week sprint is $50k to $80k.
In the culture that is product orgs, no EM needs to circulate a document for multistakeholder sign off with review by Finance and their skip level to say “I want a sprint in Q2 on performance and one in Q3 on tech debt” but they don’t have nearly that latitude with writing checks
The API call thing is similar, at least at scaled software shops: there’s some internal threshold, likely quite informal, for how much organizational buyin you need to make prior to using the usual tooling to make an infra change, and the equivalent of a $100k commit is trivial.
(As always, I’d read these as “Observations broadly about the software industry” rather than as policy statements regarding any individual firm. I tend to be pedantic about that distinction for predictable reasons.)
*underpriced !
