SaaS pricing evolves: Should we be worried? Software as a service pricing schemes are getting more complicated and raising questions about lock-in, whether long-term deals are true to the spirit of cloud computing and what kind of deals IT buyers are really getting. Now you can't paint all SaaS pricing with a broad brush. A collaboration provider will have different economics---and may be more amenable to pay-as-you-go deals. Other companies that handle more complicated implementations---think Workday or Salesforce.com---may like longer-term contracts.
Anecdotal evidence is showing that large enterprise SaaS contracts aren't exactly pay by the sip anymore. And some of these deals look like your standard licensing and maintenance deals---still cheaper though. In any case, the SaaS pricing conversation is worth having. Capabilities can be rapidly and elastically provisioned, in some cases automatically, to quickly scale out and rapidly released to quickly scale in.
Add it up and SaaS pricing is an issue that's starting to bubble up. As SaaS Evolves, So Will SaaS Pricing. A follow-up perspective on SaaS pricing ditribution and revenue model from Sixteen Ventures. Originally posted by Lincoln Murphy From time to time I feel I must remind everyone – buyers, sellers, pundits, commentators, & analysts – that SaaS is not a pricing model or pricing strategy. From the vendor side, Software-as-a-Service (SaaS) is a unique Software Business Architecture where service is the focus over the technology. From the consumer side, SaaS is on-demand functionality that solves business problems, putting the focus more on the “service” aspect than the “software” SaaS might displace.
So, the notion that if you have a web-based, multi-tenant software product you must adhere to the same pricing tactics employed by every other vendor has come and gone. The impetus of this post came from an article on ZDNet by Larry Dignan the other day titled “SaaS pricing evolves: Should we be worried?” So yes, SaaS Pricing has evolved – and will continue to evolve – and this is a great thing. How to Price your SaaS Application. [Guest article by Shalin Jain, Founder & CEO of Tenmiles Corporation, a software product company with a SaaS app] SaaS: Software As A Service has become widely accepted and is a popular choice among businesses. Businesses consuming SaaS applications favour the low upfront cost and zero infrastructure headaches.
Also, SaaS applications being deployed online have the advantage of being available anywhere, anytime and even on any platform. Businesses developing software have embraced the SaaS model with open hands. Clearly SaaS applications have adopted a different pricing model than the traditional one-time license fee based desktop or web applications. Let’s dive into a few of the popular pricing strategies to understand the available models and what could fit your next SaaS application.
There is actually no free model when it comes to SaaS applications, unlike desktop or deployable web based apps. Facebook - Free Social Networking Service Ads shown on youtube.com homepage Freemium. How SAAS Pricing Plans Have Evolved Over a Period of Time. [In continuation with our coverage on SAAS industry, here is a guest article by Paras Chopra, founder of Visual Website Optimizer. In the earlier article (How to Price your SaaS Application – The Definitive Guide), Shalin walked us through the different pricing models of SAAS applications.
Paras, in this article analyzes how pricing plans of companies have changed/evolved over a period of time]. We are in the process of finalizing pricing for my startup Visual Website Optimizer, which is an A/B and Multivariate testing tool. As you can imagine, fixing price is one of the toughest decisions that a startup has to (inevitably) take. Once fixed, it could be extremely difficult to change it without annoying a lot of customers. We want to be extra sure that we don’t end up under- or over-pricing Visual Website Optimizer. So, how do we decide what to charge? Asking beta users can be one of the strategies and we actually used that for VWO. So, here we are: still undecided about the pricing. Pricing Strategy Resource Guide | SaaS Marketing Strategies. Saas. We worked together with Pacific Crest, an investment banking firm with a specific focus on SaaS, to survey 155 SaaS companies on a variety of topics such as growth rates, CAC (cost to acquire a customer), gross margins, churn rates, etc.
The goal of the survey is to provide useful operational and financial benchmarking data. “If you cannot measure it, you cannot improve it” – Lord Kelvin This article is a comprehensive and detailed look at the key metrics that are needed to understand and optimize a SaaS business. It is a completely updated rewrite of an older post. For this version, I have co-opted two real experts in the […] This page is a supplement to the SaaS Metrics 2.0 blog post that provides a comprehensive study of the key metrics to understand and optimize a SaaS business. Intro This page is a supplement to the the SaaS Metrics 2.0 blog post. Pacific Crest, an investment banking firm with a strong focus on SaaS, has surveyed a 70 SaaS companies with very interesting results.