How companies buy software for developers

By Dan Adler on November 14, 2018


Source: https://xkcd.com/1205/

XKCD can teach us a lot about how the world works. The chart above — known as a sensitivity analysis in accounting and finance (or a Data Table in Microsoft Excel) — clearly illustrates how changes to independent variables or input assumptions can impact a final outcome.

Simply put, don't waste too much time writing a script to mail out your leap year party invitations...

This same analysis serves as a convenient way to evaluate the tradeoffs of pursuing a project or using a new tool. At Sourcegraph, we share the table below with any customers who are considering purchasing or upgrading, whether they're a CTO or engineering lead, or a procurement team. We know someone internally is making the case for including "developer experience" as a line item in their budget.

Value of Sourcegraph per developer, per month

A user can find their internal numbers or estimates on the two axes, and see how much value they get from Sourcegraph. If that number is red, then they have little reason to purchase our Enterprise Starter tier (which costs $4/user/month). Similarly, if it is green, they can easily justify deploying our high-availability Enterprise tier (at $19/user/month).

This is however, a crude and incomplete way to measure Sourcegraph's value, for a number of reasons:

  • It is difficult to estimate these inputs
  • Long-term time savings — e.g., the impact of shipping fewer bugs — are hard to capture in a "minutes saved per day" metric
  • And most importantly, using Sourcegraph to build better products is best seen through happier customers, faster releases, and higher sales, not in lower costs

Play the game, do the math

We still have to play the game when our customers kick us the ball. If someone internally needs to see an ROI (return on investment) calculation — and they always do in large companies — we want to be completely open about our pricing and our value.

What is most surprising about these discussions is that the majority of engineers have no idea how much influence they have inside of a large organization. Your boss, your boss's boss, and the entire procurement and finance organization is doing the math above.

If they can pay $60+ per year to save you 30 seconds per working day, they will always do it.

And if you can cut an hour of downtime out of your week from, for example, searching for error messages, waiting for CI builds, or reviewing complex code, the value easily exceeds $1,500 per year for you alone.

This math doesn't even include the benefit of having a happier team, easier recruiting, and encouraged creativity, as opposed to staring at the screen and re-implementing the same code for the 100th time.

You have the power to use the tools you want

Engineers, from the freshest interns to the 40-year veterans, have enormous influence in software purchasing. You are critical to the company, there are a lot of you, and you are often (on average) well-compensated. It's the same reason that the basic Salesforce CRM software costs up to $300/salesperson/month: sales people are critical to a company's success, so buying them the best tools is a no-brainer.

So the next time you see JIRA priced at $2+/user/month, or GitHub for Teams priced at $9/user/month, or Sourcegraph Enterprise at $19/user/month, check out our XKCD-like table above (it works for any of them)...

...You'll realize that you hold all the power in deciding what your company uses. You just have to ask for it.