I think many entrepreneurs make the mistake of splitting out services revenue and product revenue. In some cases you can and should do that and just charge for services separately, but often times this is not the case. With inDinero, 85%+ of the offering is blended. And by blended I mean the customer is paying a flat fee which includes both software and service, and how much of that is product-driven versus people-driven doesn’t really matter to the customer. At the end of the day, the customer just cares about getting the end result that they’re paying for. Obviously, the goal is for the vast vast vast majority of the blended work to actually just be software-driven. There’s no easy way to calculate how much is software versus people, nor do I think it really matters to think about it that way. Investors are also most focused on gross margins and that is probably the best financial indicator to show how much of something is people versus software.
For the 15% that is clearly services revenue and where there is zero hope of automating via software, we split that out separately. I think < 20% is a fair standard for SaaS businesses.