How can we accommodate enterprise customers who want on-prem solutions for our SaaS product?
Asked by
mudflat.observer
We're a SaaS startup that only handles public, non-sensitive data, but one of our major prospects is insisting on an "on-prem only" setup. Their main concern is that they don't want us accessing their data. While most of our other clients are perfectly fine with our cloud offering, we've encountered this request a few times now. Implementing true on-prem solutions would involve significant overhead regarding infrastructure, SLAs, updates, and ultimately giving up some control over our code. I'm wondering if there are any middle ground solutions we can offer, such as dedicated or VPC-isolated deployments. Has anyone had success in similar situations?
Answers
You may want to think about whether you plan to create an open-source or self-hosted version down the line. If that’s a possibility, evaluate your infrastructure now to see how feasible it would be to ship an on-prem version. If you're already using containers, you're pretty close! Also, consider if there’s a broader market for similar requests that could justify such development.
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We’ve successfully navigated similar client situations by offering a single tenant cloud deployment. It’s worth exploring if your product could be adapted for something like that instead.
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If they’re really worried about data access, just offering dedicated deployments might not cut it. You can quote them two prices: the normal rate for the preferred setup and a much higher one for the on-prem, where you can stress that it’s a hassle to maintain. If they're truly invested in on-prem, they might be willing to pay more, otherwise, the cost discrepancy might persuade them otherwise.
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If a client demands on-prem, you usually have two options: turn into a standard vendor or just decline and move on. The first option can be a real headache, so weigh if it’s worth it.
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At my company, we charge a minimum of ten times the SaaS contract for self-hosting. Some companies bite the bullet for that, but often the on-prem demand fades when they see the actual costs. A lot of times, it’s just a matter of not wanting to deal with the hassle of vendor reviews for existing SaaS options. Recently, only government agencies and top-tier LLM companies have pushed for on-prem setups.
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Meeting customer demands is crucial if you want the business. If your stack can work with Docker, setting up on-prem should be manageable. Don’t stress too much about code access; to them, you’re just a service among many. Be open to customization requests—it can create dependency, making it harder for them to switch later, leading to more stable revenue for you.
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~dmaBurst16: Definitely make that on-prem price at least twice what it would typically cost to manage it. Also, be prepared for the added resource strain, which could lead to burnout if not managed right.