This short post arose from real situations when, as the client grows (the volume of licenses purchased), it becomes clear that the benefits from such a client are becoming less and less. At the same time, such a client is asking for more and more discounts, "exclusivity" and attention (and sometimes he tries to "twist his hands" with his importance). In our practice, we started saying "no" to such clients and explaining why. It's about this logic and key that I'm sharing with you today.:

Opt's false intuition.

In the world of physical goods, volume growth usually reduces the cost (less downtime for machines, employees, fixed assets, cheaper to buy raw materials in bulk, etc.).

In SaaS, with significant volume growth, cost savings often do not occur — the larger the customer, the more expensive the operational risks and resources consumed become. Relatively speaking: one client with 1,000 APMs creates a much more serious burden on the project than one hundred clients with 10 APMs.

This leads to heavier database queries, a larger amount of data, increased requirements for SLA and resources of the support department/technical team, as well as significantly more serious conflicts (and legal claims) in case of downtime or errors, etc.

And how are the costs rising?

Up to a certain size, new users from the client are almost "free" — their appearance does not create the need for additional expenses.

But then, at some point, the load starts to grow disproportionately: you have to buy more hardware, refactor the code, and strengthen technical support. And these expenses start to grow faster than new licenses (i.e. payments) are added. In other words, such growth ceases to bring additional income and benefits.

And yes, as a rule, such large clients add volume discounts, free licenses, bonuses and other "wholesale" attributes to the "oil painting", which do not increase your profit, but at the same time increase the fragility of the business (dependence on individual customers and, as a result, less stability).

What I would like to draw the attention of my "colleagues on the shop floor":

While the cost per user is falling, discounts and all sorts of "buns" are possible.

As soon as it starts to grow, the discounts should end.

To summarize:  "A lot of jobs" in SaaS is not at all like a wholesale purchase of office supplies or something like that - the client should understand this.

After all, the larger the client, the more expensive it costs the provider, and therefore there is simply nothing to give him huge discounts.