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A comment on Why are you still building consumer apps? Enterprise pays 4x more. Parent comment

Re:Why are you still building consumer apps? Enterprise pays... by mattzito on Monday December 16, 2013 @01:57PM (#6916963)
Self-replying to add: The other thing to think about with on-premise enterprise software is that while it's a huge pain to sell, it's incredibly sticky. If you build up a sufficient volume of customers, you can basically fund operations off of renewals, and invest all of your net new income in new R&D and development.

Many companies will renew support contracts for years, even if they're not heavily using your software anymore, because the risk associated with their being out of support and then running into a critical issue is greater than the $100k it's going to cost them to renew. But if you've got 100 customers paying $100k/year to renew support, that's $10m in basically guaranteed revenue, which means that now you've got some breathing room to plan and grow sensibly. That's when the lumpiness goes away.

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Re:Why are you still building consumer apps? Enterprise pays... by greenyoda on Tuesday December 17, 2013 @11:54PM (#6925981)
Having a predictable income from support contracts is also a buffer against seasonal sales cycles. The company I work for sells software to large enterprises that tend to go on buying sprees during the fourth quarter, when departments have to use up their yearly budgets or lose them. Many years we don't know if it will be a horrible year or a great year until we've hit the fourth quarter.
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