Everything you think you know about developer spending habits is almost certainly wrong. The received wisdom used to be that selling to developers was sheer lunacy. Today, according to a new report from Evans Data, "Developers exert a high degree of influence over decisions made in their companies." Oh, sure, you say, everyone knows that developers increasingly influence IT spending, but they don't actually spend any money themselves.
According to the same Evans Data report, 58% of developers indicated they have budget authority, not merely budget influence. Given this shift, as well as the reality that developers are increasingly the kingmakers, as Redmonk has declared, software companies need to respond with less marketing and more self-service, developer-friendly offerings.
Cheapskates no more
Just a few years back, it was de rigueur to believe, as one writer noted, that "Many developers would rather go out of their way to build their own tools or use bug-ridden free tools than plunk down the money it would take to buy a service or subscription that could actually help them do their jobs more efficiently." Developers might influence purchasing decisions, but their budgets were anemic.
Or so the common thinking went.
SEE: Job description: Platform developer (Tech Pro Research)
Over the last few years, however, developers have taken on more and more authority to not merely influence budget decisions, but to actually get to spend the budget. According to Evans Data survey data, developers have the most impact with development tooling, with 95% involved in such purchases, and 41% authorized to make the purchase. As the report authors stated: "The proportion of developers with authority to spend [significant amounts] has risen steadily since 2015 and is now higher than it has been since the inception of this report."
Nor is such influence constrained to tooling: Developers are also heavily involved in purchasing cloud services, security software, and more.
Indeed, if we look at some of the fastest-growing businesses today, they're developer-focused and depend on developers not merely influencing purchases, but also handing over the cash. The best example is Amazon Web Services (AWS), with nearly $20 billion in annual sales, but MongoDB, Atlassian, and Twilio are also great examples of developer-led businesses. Each company is worth billions despite selling to the very cheapskates that allegedly have no money.
Knowing that developers have cash, however, is not the same as actually collecting from them.
Making money from developers
Convenience is the primary driver for developer adoption of technology. The two biggest trends in software over the past 20 years—open source and cloud computing—are basically ways for developers to get software and hardware with maximum convenience and minimal bureaucracy.
Those companies, then, that do best with developers are those that cater to convenience. AWS, for example, isn't free, but it does a stellar job of rolling out a broad array of services with easy-to-grok APIs. Google Cloud Platform, in a similar vein, has amazingly great documentation to guide developers toward productivity, fast. MongoDB has long been a developer darling because of how approachable it is, making it easy for developers to get started and scale.
And then there's Atlassian, which hasn't historically offered open source products or cloud offerings. Instead, it has provided easy-to-use software at a low price, making it easy for even budget-starved developers to slip through a purchase of Confluence without getting CIO approval. Purchasing is done online without a pushy salesperson hawking the products.
SEE: How Atlassian keeps making money, even after it stopped selling to developers (TechRepublic)
In each case, these companies put a premium on products that "just work," with marketing and sales following the product rather than leading it. With developers, you can't lie about what a product does, since it's a download or API away. As such, developer-oriented companies focus on building easy-to-use products with a try-before-you-buy approach.
In short, there's lots of money to be made with developers, whose importance will continue to grow each year. To reach them, however, enterprises need to think differently about how they build and sell software. Those that don't are toast.