Depends on the product. If it's off-the-shelf and every customer just does DIY deployment, 100% agree.

But many of these products have lots of different modules, and customers don't always know which ones they need. And some nearly require assistance/consulting with deployment, the complexity of which varies depending on environment.

So from the company's point of view, they don't want to put "$200k" on the website if the actual price is between $100k and $1m depending on customer specifics. It will scare off smaller customers and upset bigger customers.

But yeah if it's just one-size-fits-all, download-and-install SW, pricing should be listed.

Or, if you're dealing with a startup, there's a chance the product doesn't actually exist and they'll want to lock you in a deal that gives them more concrete requirements and funds the MVP. This is based on a bet that programmers can crank out code faster than the enterprise customer can finalize the deal.

In the past, I've dealt with a startup that not only did just that, but also used the non-final deal with one very large customer to try and get similar deals started with several other large companies, with half the pitch being just "we're about to deploy our solution at ${very large and well-known international you've heard of}".

It has never ever been a bad strategy to get paid to build a product rather than building something and hoping there’s a market.

This is the way to do enterprise sales.

Right. My point is more about misleading presentation. The landing page will try to convince you the company is offering an amazing product that will solve your problems, when the reality is, the product doesn't exist and the company is trying to get you to fund it.

It's funny you bring this up because a startup i was involved in at the beginning did something similar. I was one of the seniors and we would have proposed "ideas" for what could be done with the product. The next day the sales people were selling those features .. unfortunately it created a huge divide between sales and development that ultimately couldn't be overcome.

I understand the insentive is to sell, but there has to be a balancing line between sales and development, both can't work solely independent.

Vendor list pricing is absurd. Real story but using made up numbers below:

I spoke with a vendor last week who came in at 500k. I told them my budget was 250k, price came back at 255k.

Then your renewal comes up and you’ve already spent another million in salaries and bespoke shit to make it work for you and the sales guy hits you with 500k again because you’re in too deep.

Cisco was legendary around here (20+ years ago when I was around networking). They would win almost every tender, often with quotes below cost if that is what it took. And everyone in the know knew you would be paying much, much more over the next few years with support costs, renewals, etc. The first hit is free.

Bingo

Because they'd rather get $500K, but getting $255K is better than getting $0K.

Because the service costs them $40k. I've seen this in the physical world with markups like this in captured industrial markets.

No it doesn’t this makes zero sense. $40k is way too much for operational costs and way too little for human costs.

If you only count operational costs and a hypothetical skeleton crew to maintain it it probably costs damn near nothing to add another customer.

But once you include the salaries of 20 to 2000 engineers and the rest of the business to support them it’s a whole different ballgame. A major feature that takes one team 6 weeks to build costs a little less than half a mil in engineer salaries.

Software by its nature is weighted heavily in upfront costs and so pricing is “how little can we afford to charge to be in the black with ARR, how much do our competitors charge, and how much would it cost you to build it yourself.”

I mean that's how I would price it too.

Those sales people do ‘squeeze’ out a lot of $$$, and it’s also how they often get competitive and product intelligence. What other products is the person using, what expectations/requirements do they have that we might or might not be meeting, etc.