SaaS Pricing Models (part 1)
Today, we shall explore the different Pricing Models of SaaS (we shall focus on SaaS; what you are about to read does not necessarily apply to PaaS, IaaS or other forms of “aaS”). We shall also try to approach an answer on why similar pricing models of similar applications can diverge so much from each other.
This model is also clear to the buyer but in some cases it may indicate that the supplier is trying to gain more money with each simple “click” that the buyer is doing (“So, now that Mary was also granted access to the CRM module, you have to pay me $5 more, per month”). This could be a possible drawback in Eastern-thinking countries or cultures such as Greece, India etc. Also, if you try to follow the user authorities “to the letter” in order to be 100% accurate, this could lead to an administration nightmare. For this reason, when this model is applied, a clause in the Services Contract could read something like “reevaluation of the user rights will be done every 6 months. If significant changes are found, then the monthly fee will be re-negotiated”.
A perfect example of this model could be an HR system: It is typically used by a small number of employees (or “given number” if you prefer) and they are doing trivial tasks. It doesn’t matter if the Enterprise has 30 or 150 employees. The system will be used by, say, 3 people (the HR dept.).
But look at this: If the Enterprise suddenly decides to apply “self-services” in the HR sector, then the number of users will suddenly explode from 3 to 150. Then, this pricing model may not be suitable any more…
We shall explore more Pricing models in our next episode. Stay tuned!