The B2B software industry is enormous, and the status quo demands licensing and monthly retainers rather than one-time downloads or purchases. After all, that’s how you build a sustainable business that can grow. But what kind of tech stack do you need to make this happen? If you already have a product in hand that you’re ready to sell, this blog is for you.
Understanding B2B Software Licensing
Before diving into the technical aspects, it’s important to understand what B2B software licensing entails. Licensing B2B software involves obtaining permission from a software provider to use their applications for your business operations. This could range from customer relationship management (CRM) systems to enterprise resource planning (ERP) software, each with specific infrastructure needs. Oftentimes, the provider will “whitelabel” the software for customers after they have purchased it, so they can then provide it to their customers under their brand.
The Core Components of Your Tech Infrastructure
Hardware Requirements
The foundation of any tech infrastructure begins with hardware. Depending on the scale of the software and its intended use, hardware requirements can vary significantly. For on-premises solutions, powerful servers are necessary. A small to medium-sized business might need servers with at least 32GB of RAM, multiple CPUs (e.g., Intel Xeon processors), and substantial storage capacity (e.g., RAID configurations for redundancy). High-quality servers can range from $3,000 to $15,000 each, depending on specifications.
Additionally, reliable networking equipment, such as routers, switches, and firewalls, is necessary to ensure seamless connectivity and security. Brands like Cisco and Juniper offer robust solutions, with networking equipment costs ranging from $1,000 to $5,000, depending on the complexity of the network.
Software Requirements
To ensure compatibility, you’ll need to choose suitable operating systems, such as Microsoft Windows Server or various Linux distributions. Licensing costs for operating systems can range from $500 to $3,000 per server.
Additionally, many B2B applications require a large Database Management System (DBMS) like Microsoft SQL Server, Oracle, or MySQL. DBMS licenses can range from free (MySQL) to several thousand dollars (Oracle, Microsoft SQL Server) depending on features and scale.
Cloud Infrastructure Rather Than Servers
Many businesses opt for cloud-based B2B software solutions rather than hosting on their own servers. Cloud infrastructure offers scalability, flexibility, and often lower upfront costs. Leading providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) offer various services such as virtual machines, databases, and storage. Cloud costs vary widely based on usage, with AWS EC2 instances costing from $0.01 to $3.60 per hour, depending on the instance type.
Many B2B applications are available as Software as a Service (SaaS), eliminating the need for extensive infrastructure. Examples include Salesforce (CRM), Slack (communication), and Zendesk (customer service), with SaaS subscription costs ranging from $10 to $150 per user per month.
Security Infrastructure
Securing your licensed software and data is paramount. Robust security measures protect against breaches and ensure compliance with regulations. Essential security components include firewalls and intrusion detection systems, which can be hardware or software solutions to monitor and protect your network. Firewall appliances can range from $500 to $10,000, depending on capabilities.
Ensuring data encryption both at rest and in transit is critical, with solutions like SSL/TLS certificates and full-disk encryption being standard practices. SSL certificates can range from $10 to $300 per year, while encryption software can cost between $100 and $1,000 annually.
Support and Maintenance
Ongoing support and maintenance are vital to keep the infrastructure and software running smoothly. Depending on your business size, this could range from a small in-house team to outsourced managed services. IT support services can range from $50 to $150 per hour or a fixed monthly fee of $500 to $5,000.
Use Cases
Teaching and Educational Platforms
If you provide a teaching platform that other schools and educators can use, you may choose to create a software solution that can be rolled out to many customers. For example, music schools used to purchase the Alfred Group Piano Method, Faber Method, or other physical educational tools. Now, they are turning to online group lessons curriculum like Piano Express, which is a digital platform that connects to digital keyboard labs.
Customer Relationship Management (CRM) Systems
For example, Salesforce is a popular CRM system that primarily relies on cloud-based infrastructure, requiring minimal on-premises hardware. Ensuring strong internet connectivity and secure access protocols is essential. Salesforce licenses range from $25 to $300 per user per month.
Enterprise Resource Planning (ERP) Systems
SAP ERP is an example of an ERP system that often requires robust servers and database systems for on-premises deployments, although cloud options are available. SAP ERP licenses can be complex, often ranging from $100,000 to several million dollars, depending on the enterprise size and modules.
Collaboration Tools
Microsoft Teams is an example of a collaboration tool that is cloud-based with minimal hardware requirements. It ensures secure user access and integration with existing systems. Microsoft Teams costs $5 to $20 per user per month, depending on the plan.
Conclusion
Meaningful B2B software companies usually have significant investors, and it’s not hard to see why. The start up costs are high, but the potential return can be huge. Whether you have a music lesson solution, plan company retreats, offer a meeting solution, or something else, you will benefit from a solid and reliable tech stack. Bear these costs in mind, and don’t push your product into the public eye until your infrastructure is complete.
