...we would freak out. We would be demanding to understand where the rest was going. But we have accepted the fact that software companies only spend 10-15% in R&D and product development. Even worse, they spend 2 to 5 times as much in sales and marketing. Instead of a pharma model where software vendors keep doing basic research and innovating, we have helped them create a cereal model and keep paying pharma pricing.
Erik Keller analyzes the SG&A costs at several software vendors. It is not a pretty picture. Both vendors and buyers have to move to dramatically reduce that cost. As Erik describes it will mean lower cost sales channels, more "pull" models, and fewer salesperson tricks. And buyer willingess to move deals along quicker and more efficiently.
To my friends in technology sales and marketing - I think you are way too focused on "value selling" in a deflationary tech market. For the near future you will do just as well helping your companies find creative ways to sell and market for less - much less.
