Atlantic Crossing Digital Consulting

Time to ditch SaaS?

In a post on techcrunch.com, Ray Sobol suggests that it may be time to leave the subscription model often employed by Software-as-a-Service (SaaS) vendors:

"No one likes to pay for things they don’t use. If you’ve ever grappled with the fact that you’re paying for 500 channels on your monthly cable bill when you only use a few, you know what I mean. The same problem holds true when it comes to software. An average business purchases more software than is actually needed, and we’ve all had software installed that we used sparingly. It’s time to let customers pay based on what they actually use."

Which is true. But Sobol assumes that subscription models are all based on per-user, per-month pricing schemes. Which is not true. SaaS pricing today is all over the map, with many vendors trying to align their prices with the actual benefits their customers experience. For example, pricing per no. of transactions, per no. of pages/websites/domains, per some amount of transaction value, per volume of data storage, etc.

It all depends on the specific benefit set that the SaaS in question provides. And, most of all, on customer preferences, for example: the certainty of knowing the cost every month vs. the potential savings of a more variable plan.

The original post contains an ongoing discussion that sheds light on many facets better than yours truly can do here.

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