1) The document discusses pricing and packaging strategies for software-as-a-service (SaaS) applications. It explores how pricing differs for SaaS compared to traditional on-premise software.
2) Key components of SaaS contracts include subscription models, pricing metrics, contract terms, billing, revenue recognition, service level agreements, and dynamic scaling.
3) Pricing and packaging strategies should be driven by business objectives such as growing the customer base, maximizing revenue, or differentiation. The strategies may differ depending on if it is a new SaaS startup or an existing company transitioning to SaaS.
The document discusses SaaS pricing strategies. It begins with an introduction of OrangeScape, a SaaS development platform, and then discusses setting the stage by explaining cloud computing models. The bulk of the document focuses on pricing, including looking at competition, understanding costs, the differences between on-premise and SaaS pricing, and ways to improve margins. It suggests adopting agile development and new tools to reduce costs and focusing on infrastructure and scaling to gain price advantages. The document concludes with a Q&A section.
Software as a service pricing strategies gregoryandrew
This document discusses software as a service (SaaS) pricing strategies. It outlines four common pricing models - Freemium, Consumption, Tiered, and Perpetual License. For each model, it describes the key characteristics and provides brief case studies. It then presents a decision framework for choosing a pricing model and shares insights from interviews with real companies. The goal is to help SaaS startups navigate the difficult decision of pricing as they have emerging technologies.
6 killer KPIs to regrow your lazy cloud businessPlesk
We work through 6 KPIs that every business manager–whether new to the service provider club, a system integrator transitioning into cloud services, or well-established kingpin of hosting–needs to know. These KPIs, if applied and measured correctly, are guaranteed to increase your profits.
Slides from SaaS & Web App Pricing RoundtableLincoln Murphy
Slides from the SaaS & Web App Pricing Roundtable on April 27, 2010 hosted by Techcelerate out of UK and moderated by Lincoln Murphy of Sixteen Ventures.
The document discusses Software as a Service (SaaS) and its benefits and challenges. SaaS promises lower costs, easier maintenance, and faster deployment compared to traditional on-premise software. However, SaaS also faces challenges around technical readiness, generating demand, scaling effectively, and staying ahead of competition. The transition to SaaS requires changes to business models, technology, and marketing strategies.
Developing the pricing model for your B2B SaaS app is one of the biggest marketing challenges your company will face.
This is a guide to developing your SaaS pricing model was created by noted SaaS Marketing expert and Growth Hacker Lincoln Murphy of Sixteen Ventures.
This guide takes you through the questions you need to ask about not just your market and customers, but about your company and goals, to help you figure out your SaaS pricing model.
Whether you have a self-service sales model or one that requires outside sales reps to drive business, the tips and techniques contained in this guide and the source blog post will help you create a profitable and successful SaaS pricing model.
The presentation for a session I delivered internally to our team at WUZZUF about picking the suitable pricing strategy and techniques for a SaaS product startup
The document discusses SaaS pricing strategies. It begins with an introduction of OrangeScape, a SaaS development platform, and then discusses setting the stage by explaining cloud computing models. The bulk of the document focuses on pricing, including looking at competition, understanding costs, the differences between on-premise and SaaS pricing, and ways to improve margins. It suggests adopting agile development and new tools to reduce costs and focusing on infrastructure and scaling to gain price advantages. The document concludes with a Q&A section.
Software as a service pricing strategies gregoryandrew
This document discusses software as a service (SaaS) pricing strategies. It outlines four common pricing models - Freemium, Consumption, Tiered, and Perpetual License. For each model, it describes the key characteristics and provides brief case studies. It then presents a decision framework for choosing a pricing model and shares insights from interviews with real companies. The goal is to help SaaS startups navigate the difficult decision of pricing as they have emerging technologies.
6 killer KPIs to regrow your lazy cloud businessPlesk
We work through 6 KPIs that every business manager–whether new to the service provider club, a system integrator transitioning into cloud services, or well-established kingpin of hosting–needs to know. These KPIs, if applied and measured correctly, are guaranteed to increase your profits.
Slides from SaaS & Web App Pricing RoundtableLincoln Murphy
Slides from the SaaS & Web App Pricing Roundtable on April 27, 2010 hosted by Techcelerate out of UK and moderated by Lincoln Murphy of Sixteen Ventures.
The document discusses Software as a Service (SaaS) and its benefits and challenges. SaaS promises lower costs, easier maintenance, and faster deployment compared to traditional on-premise software. However, SaaS also faces challenges around technical readiness, generating demand, scaling effectively, and staying ahead of competition. The transition to SaaS requires changes to business models, technology, and marketing strategies.
Developing the pricing model for your B2B SaaS app is one of the biggest marketing challenges your company will face.
This is a guide to developing your SaaS pricing model was created by noted SaaS Marketing expert and Growth Hacker Lincoln Murphy of Sixteen Ventures.
This guide takes you through the questions you need to ask about not just your market and customers, but about your company and goals, to help you figure out your SaaS pricing model.
Whether you have a self-service sales model or one that requires outside sales reps to drive business, the tips and techniques contained in this guide and the source blog post will help you create a profitable and successful SaaS pricing model.
The presentation for a session I delivered internally to our team at WUZZUF about picking the suitable pricing strategy and techniques for a SaaS product startup
StartupTalk #35 - How to Price your First SaaS ProductPreSeed Ventures
The document provides an overview of pricing strategies for B2B SaaS companies. It discusses using price discrimination to optimize pricing by creating different product tiers, packages, and pricing models to appeal to different customer budgets and needs. The key recommendations are to (1) create multiple product and pricing models instead of one single model, (2) package products into bundles that satisfy different "jobs to be done", and (3) start with a core pricing metric that is both fair and profitable before adjusting with other fees. The goal is to find the optimal price points that maximize sales and revenue.
Pricing - Setting up your startup for SaaS GrowthAnadi Raj Tiwari
Deep dive into Pricing Strategy. Learn the axes available to pull pricing lever for SaaS growth in subscription economy. Understand the influence ASP has on the options available and how to align it strategically across the 3 key SaaS sales model.
A SaaS Metric designed to Increase Free Trial ConversionsLincoln Murphy
CCAs & Engagement – An Uncommon Way to Engage & Convert Prospects in Your SaaS Free Trial.
A few years ago I came up with a set of metrics that I called Common Conversion Activities – or CCA – that I defined as “The things that all or most paying customers do during their trial.”
In July 2012 I gave a 54-minute presentation where I introduced the next version of this ever-evolving set of metrics for measuring Free Trial success, the CCA, and I want to share that with you now.
See the video of this presentation here: http://sixteenventures.com/free-trial-metrics
SaaS Model & Metrics - How to build a successful software businessBrian Hutchins
Most software today is migrating to SaaS (Software as a Service), a vastly different business model. So how will you navigate its complexities? This presentation will give you a detailed look at key metrics for understanding and optimizing a SaaS business, and how these metrics can be used to drive SaaS success.
• 3. The 3 Models of SaaS Pricing1How to Pick the Best Price28 Pricing Hacks3How to Test New Pricing4We’ll cover...
• 4. Model 1: Targeting Small Businesses1
• 5. Self-service, no sales team, limited support
• 6. Pricing in the $10 - $100/month rangeThis mean you need to focus onscale and acquiring customerscheaply.
• 7. Similar companies
• 8. Model 2: Targeting Enterprise2
• 9. Sales team, contracts, full support
• 10. Pricing is $1,000s or $10,000s/monthVery little is automated, your teamwill be working very closely witheach customer.
• 11. Similar companies
• 12. Model 3: The Mid-Size Hybrid3
• 13. Automated marketing with a sales team
• 14. Pricing is $100’s/monthYou’ll need to scale your leads butyou’ll have a full sales team toclose them.
• 15. Similar companies
• 16. Pick the right price range for your vision
• 17. 2 Bad Methods for Pricing
• 18. 1. Product cost + X%You’ll undercharge somecustomers and overcharge others.
• 19. 2. What does the customer want to pay?People have no idea until you askthem for their credit card.
• 20. Pricing by Value
• 21. Value-Based PricingYour customers get value worth $Yand it only costs them $X.
• 22. For B2B, focus on money earned or saved
• 23. How much extra revenue do they earn?1How many hours do they save?2What other costs do they avoid?3Ask your customers:
• 24. Capture more value from each customer.
• 25. There’s no such thing as a perfect price.If you need more guidance, pick aprice that’s 10% of the valuedelivered.
• 26. 8 Pricing Hacks8
• 27. Rule 1: Go AnnualYou’ll improve cash flow, reduceyour churn, and improve yourrevenue.
• 28. Rule 2: Don’t Add Unnecessary Digits$1000 looks cheaper than $1,000or $1000.00
• 29. Rule 3: Avoid Discounts Unless LaunchingDiscounts create destructivecustomer habits. Do not use themregularly.
• 30. Rule 4: Offer Multiple Prices to Anchor
• 31. Rule 5: Use pricing plans to segment customers.Different customer types getdifferent value from your product.Capture that value.
• 32. Rule 6: Double Your PriceWe all tend to UNDERvalue our ownservices.
• 33. Rule 7: Be Careful With Freemium PlansVery difficult to make it work in B2Bmarkets.
• 34. Rule 8: Grandfather Old Customers InAs long as you don’t raise pricesfor old customers, you won’t getany complaints.
• 35. These are rules, not laws.
• 36. How to Test New Pricing - 4 Steps
• 37. Step 1: Track subscription plans for all customersSubscription plans1Each monthly charge2Any cancelations3Access to total revenue, averagerevenue per user, and churn4
• 38. Step 2: Launch Your New Pricing Page
• 39. Step 3: Track your entire funnel
• 40. Step 4: Track ARPU and churn
• 41. KISSmetrics helps you find the right priceConnects all data to individual people1A/B tests for your entire funnel2See which plans are most profitable
A free trial is a technique integrated into a SaaS sales funnel that allows consumers to use the service for free for a limited time period. This helps users perceive the value without the perceived cost. While over 40% of SaaS companies list pricing on their site, only around 56% offer a free trial. Companies should consider if their product can demonstrate value through a free trial or if alternatives may work better. Analytics of the full funnel can help optimize elements like trial duration and pricing to improve conversion of users to paying customers.
"SaaS Metrics, how does to leverage the subscription economy?" by Patrick Cam...TheFamily
At TheFamily, we believe that anyone can become a great entrepreneur. Find more info here: http://www.thefamily.co/
- By Patrick Campbell, CEO at Price Intelligently (http://bit.ly/2iPRkKK)
- You can watch the full talk here here: (http://bit.ly/2iPMZan)
- Join us IRL next time: https://www.meetup.com/TheFamilyBerlin/
SaaS Free Trials - Credit Card Or No Credit Card? Our RecommendationsChargebee
This document discusses the pros and cons of offering a free trial that either requires a credit card or does not. Requiring a credit card can increase trial conversions but also introduces sign-up friction, while not requiring a credit card removes barriers but risks less user commitment. The document recommends experimenting with both options to see which approach works better for a particular business based on goals like acquiring more users or maximizing revenue per user. It also provides tips for each approach, such as qualifying trial users well or offering an extended free trial for those who provide payment details.
SaaS Marketing: Top 10 B2B Strategies to Improve ConversionsNemanja Zivkovic
There are a lot of SaaS companies out there, but only a few truly understand how to market their products and services.
You’ve probably seen this before: A company has an amazing product, but they never seem to get the word out about it.
Why is that?
They don’t use the right marketing strategies or they use the outdated ones from years ago. This results in low conversions and ultimately leads to failure for these businesses.
If you don’t want to be one of those companies, you are in the right place.
In this webinar, we covered 10 strategies that can help improve your conversions and grow your business as a result!
Find recordings here: https://www.youtube.com/watch?v=V-m87nXAcqg
Fight churn! Six initiatives to keep your customersIngvildFarstad
Churn can be measured in terms of ARR and # of customers and both are important to measure and track. Knowing your churn is important for forecasting, but the real value lies in understanding why customers choose to cancel their subscriptions. We have run several projects with our portfolio companies to understand the root causes of churn and improve the value proposition.
The document discusses the software market and purchasing behaviors of small-medium businesses. It notes that the market has over 40,000 software options, including 8,000 SaaS products, with some categories like CRM and project management being overcrowded. This makes acquiring quality leads more difficult and expensive for vendors. However, it states that the market is also overcrowded from the perspective of buyers, who feel overwhelmed by the number of options. It recommends that software companies help buyers by collecting reviews to build trust, offering free trials so their solution can be tested alongside competitors, translating and localizing content and support to the buyers' language, and providing key information upfront to address buyers' needs.
9 Business to Business (B2B) Startup Business Models Dave Parker
Your startup idea is unique - but the business model isn't unique. What can you learn from established fast growth startup companies? The models and key metrics they use to monetize their ideas.
learn more about your revenue models and how they compare to other peer & competitor companies at www.lumeric.com
The document discusses business model innovation and key lessons learned from case studies. It emphasizes the importance of balancing the cost to acquire customers (CAC) with the lifetime value (LTV) of customers. Business models that use free trials, freemium options, and viral marketing can achieve low CAC through inbound marketing techniques. Recurring subscription revenue models provide predictability and allow companies to scale through efficient sales processes.
Byte Breakfast: Attention, friction and the customer travel journey.383
This document discusses the growing popularity and potential of messaging platforms and conversational agents. It notes that messaging is a more comfortable experience for users than traditional apps. Major tech companies are investing heavily in messaging and bots are seen as a way to provide helpful services to users through natural conversations. The future of digital assistance may involve hierarchical bots with different levels of training and capabilities to meet a range of user needs.
This document outlines successful SaaS sales strategies discussed in a webinar, including keeping trials short at 14 days, automating 4-6 semi-personalized emails during the trial, calling signups within 5 minutes to address concerns, quickly demonstrating the product's value in 15 minutes or less, relentlessly following up until a yes or no decision is made, setting appropriate prices to get cash upfront, lightly discounting only for annual prepayments, and being careful of customer churn by only selling to qualified buyers.
CRM (customer relationship management) software allows businesses to manage customer interactions across various channels, capture leads from websites, route customer inquiries to sales teams, and track opportunities and customer relationships. It provides insights into business performance through customizable reports and helps streamline processes like lead management and customer support.
How to automate lead and case distribution,
improve efficiency and increase sales. Designed by Creative Cadence Limited, Bristol. Words by Valuable Content, Bristol.
Business Model Patterns at Lean Startup MachineStuart Eccles
The document discusses different business models and their key validations. It describes low and high margin/volume models, and models involving products, services, shared resources, subscriptions, resale, agencies, and audience aggregation. For each model it discusses factors like growth/problem hypotheses, cost per acquisition vs lifetime customer value, channels, buyers and sellers, and price sensitivity that are important to validate the business model. It also discusses freemium models, noting that a non-paying customer segment is funded by a different paying segment, with the goal of acquiring customers.
The document discusses the organizational changes required for a company to transition from an on-premise software model to a Software as a Service (SaaS) model. It notes that every part of the organization will be affected, including engineering, quality assurance, operations, customer support, sales, marketing, finance, professional services, and legal. Key changes include shorter release cycles, a focus on uptime and scalability, subscription-based billing, and an emphasis on customer success. Resistance to change is identified as one of the "quiet killers" of a successful transition to SaaS. Vision, leadership, and buy-in across departments is emphasized as important for a successful paradigm shift to a service model.
This white paper addresses the new challenges in software protection for the .NET Framework in addition to providing a variety means for protecting your applications.
StartupTalk #35 - How to Price your First SaaS ProductPreSeed Ventures
The document provides an overview of pricing strategies for B2B SaaS companies. It discusses using price discrimination to optimize pricing by creating different product tiers, packages, and pricing models to appeal to different customer budgets and needs. The key recommendations are to (1) create multiple product and pricing models instead of one single model, (2) package products into bundles that satisfy different "jobs to be done", and (3) start with a core pricing metric that is both fair and profitable before adjusting with other fees. The goal is to find the optimal price points that maximize sales and revenue.
Pricing - Setting up your startup for SaaS GrowthAnadi Raj Tiwari
Deep dive into Pricing Strategy. Learn the axes available to pull pricing lever for SaaS growth in subscription economy. Understand the influence ASP has on the options available and how to align it strategically across the 3 key SaaS sales model.
A SaaS Metric designed to Increase Free Trial ConversionsLincoln Murphy
CCAs & Engagement – An Uncommon Way to Engage & Convert Prospects in Your SaaS Free Trial.
A few years ago I came up with a set of metrics that I called Common Conversion Activities – or CCA – that I defined as “The things that all or most paying customers do during their trial.”
In July 2012 I gave a 54-minute presentation where I introduced the next version of this ever-evolving set of metrics for measuring Free Trial success, the CCA, and I want to share that with you now.
See the video of this presentation here: http://sixteenventures.com/free-trial-metrics
SaaS Model & Metrics - How to build a successful software businessBrian Hutchins
Most software today is migrating to SaaS (Software as a Service), a vastly different business model. So how will you navigate its complexities? This presentation will give you a detailed look at key metrics for understanding and optimizing a SaaS business, and how these metrics can be used to drive SaaS success.
• 3. The 3 Models of SaaS Pricing1How to Pick the Best Price28 Pricing Hacks3How to Test New Pricing4We’ll cover...
• 4. Model 1: Targeting Small Businesses1
• 5. Self-service, no sales team, limited support
• 6. Pricing in the $10 - $100/month rangeThis mean you need to focus onscale and acquiring customerscheaply.
• 7. Similar companies
• 8. Model 2: Targeting Enterprise2
• 9. Sales team, contracts, full support
• 10. Pricing is $1,000s or $10,000s/monthVery little is automated, your teamwill be working very closely witheach customer.
• 11. Similar companies
• 12. Model 3: The Mid-Size Hybrid3
• 13. Automated marketing with a sales team
• 14. Pricing is $100’s/monthYou’ll need to scale your leads butyou’ll have a full sales team toclose them.
• 15. Similar companies
• 16. Pick the right price range for your vision
• 17. 2 Bad Methods for Pricing
• 18. 1. Product cost + X%You’ll undercharge somecustomers and overcharge others.
• 19. 2. What does the customer want to pay?People have no idea until you askthem for their credit card.
• 20. Pricing by Value
• 21. Value-Based PricingYour customers get value worth $Yand it only costs them $X.
• 22. For B2B, focus on money earned or saved
• 23. How much extra revenue do they earn?1How many hours do they save?2What other costs do they avoid?3Ask your customers:
• 24. Capture more value from each customer.
• 25. There’s no such thing as a perfect price.If you need more guidance, pick aprice that’s 10% of the valuedelivered.
• 26. 8 Pricing Hacks8
• 27. Rule 1: Go AnnualYou’ll improve cash flow, reduceyour churn, and improve yourrevenue.
• 28. Rule 2: Don’t Add Unnecessary Digits$1000 looks cheaper than $1,000or $1000.00
• 29. Rule 3: Avoid Discounts Unless LaunchingDiscounts create destructivecustomer habits. Do not use themregularly.
• 30. Rule 4: Offer Multiple Prices to Anchor
• 31. Rule 5: Use pricing plans to segment customers.Different customer types getdifferent value from your product.Capture that value.
• 32. Rule 6: Double Your PriceWe all tend to UNDERvalue our ownservices.
• 33. Rule 7: Be Careful With Freemium PlansVery difficult to make it work in B2Bmarkets.
• 34. Rule 8: Grandfather Old Customers InAs long as you don’t raise pricesfor old customers, you won’t getany complaints.
• 35. These are rules, not laws.
• 36. How to Test New Pricing - 4 Steps
• 37. Step 1: Track subscription plans for all customersSubscription plans1Each monthly charge2Any cancelations3Access to total revenue, averagerevenue per user, and churn4
• 38. Step 2: Launch Your New Pricing Page
• 39. Step 3: Track your entire funnel
• 40. Step 4: Track ARPU and churn
• 41. KISSmetrics helps you find the right priceConnects all data to individual people1A/B tests for your entire funnel2See which plans are most profitable
A free trial is a technique integrated into a SaaS sales funnel that allows consumers to use the service for free for a limited time period. This helps users perceive the value without the perceived cost. While over 40% of SaaS companies list pricing on their site, only around 56% offer a free trial. Companies should consider if their product can demonstrate value through a free trial or if alternatives may work better. Analytics of the full funnel can help optimize elements like trial duration and pricing to improve conversion of users to paying customers.
"SaaS Metrics, how does to leverage the subscription economy?" by Patrick Cam...TheFamily
At TheFamily, we believe that anyone can become a great entrepreneur. Find more info here: http://www.thefamily.co/
- By Patrick Campbell, CEO at Price Intelligently (http://bit.ly/2iPRkKK)
- You can watch the full talk here here: (http://bit.ly/2iPMZan)
- Join us IRL next time: https://www.meetup.com/TheFamilyBerlin/
SaaS Free Trials - Credit Card Or No Credit Card? Our RecommendationsChargebee
This document discusses the pros and cons of offering a free trial that either requires a credit card or does not. Requiring a credit card can increase trial conversions but also introduces sign-up friction, while not requiring a credit card removes barriers but risks less user commitment. The document recommends experimenting with both options to see which approach works better for a particular business based on goals like acquiring more users or maximizing revenue per user. It also provides tips for each approach, such as qualifying trial users well or offering an extended free trial for those who provide payment details.
SaaS Marketing: Top 10 B2B Strategies to Improve ConversionsNemanja Zivkovic
There are a lot of SaaS companies out there, but only a few truly understand how to market their products and services.
You’ve probably seen this before: A company has an amazing product, but they never seem to get the word out about it.
Why is that?
They don’t use the right marketing strategies or they use the outdated ones from years ago. This results in low conversions and ultimately leads to failure for these businesses.
If you don’t want to be one of those companies, you are in the right place.
In this webinar, we covered 10 strategies that can help improve your conversions and grow your business as a result!
Find recordings here: https://www.youtube.com/watch?v=V-m87nXAcqg
Fight churn! Six initiatives to keep your customersIngvildFarstad
Churn can be measured in terms of ARR and # of customers and both are important to measure and track. Knowing your churn is important for forecasting, but the real value lies in understanding why customers choose to cancel their subscriptions. We have run several projects with our portfolio companies to understand the root causes of churn and improve the value proposition.
The document discusses the software market and purchasing behaviors of small-medium businesses. It notes that the market has over 40,000 software options, including 8,000 SaaS products, with some categories like CRM and project management being overcrowded. This makes acquiring quality leads more difficult and expensive for vendors. However, it states that the market is also overcrowded from the perspective of buyers, who feel overwhelmed by the number of options. It recommends that software companies help buyers by collecting reviews to build trust, offering free trials so their solution can be tested alongside competitors, translating and localizing content and support to the buyers' language, and providing key information upfront to address buyers' needs.
9 Business to Business (B2B) Startup Business Models Dave Parker
Your startup idea is unique - but the business model isn't unique. What can you learn from established fast growth startup companies? The models and key metrics they use to monetize their ideas.
learn more about your revenue models and how they compare to other peer & competitor companies at www.lumeric.com
The document discusses business model innovation and key lessons learned from case studies. It emphasizes the importance of balancing the cost to acquire customers (CAC) with the lifetime value (LTV) of customers. Business models that use free trials, freemium options, and viral marketing can achieve low CAC through inbound marketing techniques. Recurring subscription revenue models provide predictability and allow companies to scale through efficient sales processes.
Byte Breakfast: Attention, friction and the customer travel journey.383
This document discusses the growing popularity and potential of messaging platforms and conversational agents. It notes that messaging is a more comfortable experience for users than traditional apps. Major tech companies are investing heavily in messaging and bots are seen as a way to provide helpful services to users through natural conversations. The future of digital assistance may involve hierarchical bots with different levels of training and capabilities to meet a range of user needs.
This document outlines successful SaaS sales strategies discussed in a webinar, including keeping trials short at 14 days, automating 4-6 semi-personalized emails during the trial, calling signups within 5 minutes to address concerns, quickly demonstrating the product's value in 15 minutes or less, relentlessly following up until a yes or no decision is made, setting appropriate prices to get cash upfront, lightly discounting only for annual prepayments, and being careful of customer churn by only selling to qualified buyers.
CRM (customer relationship management) software allows businesses to manage customer interactions across various channels, capture leads from websites, route customer inquiries to sales teams, and track opportunities and customer relationships. It provides insights into business performance through customizable reports and helps streamline processes like lead management and customer support.
How to automate lead and case distribution,
improve efficiency and increase sales. Designed by Creative Cadence Limited, Bristol. Words by Valuable Content, Bristol.
Business Model Patterns at Lean Startup MachineStuart Eccles
The document discusses different business models and their key validations. It describes low and high margin/volume models, and models involving products, services, shared resources, subscriptions, resale, agencies, and audience aggregation. For each model it discusses factors like growth/problem hypotheses, cost per acquisition vs lifetime customer value, channels, buyers and sellers, and price sensitivity that are important to validate the business model. It also discusses freemium models, noting that a non-paying customer segment is funded by a different paying segment, with the goal of acquiring customers.
The document discusses the organizational changes required for a company to transition from an on-premise software model to a Software as a Service (SaaS) model. It notes that every part of the organization will be affected, including engineering, quality assurance, operations, customer support, sales, marketing, finance, professional services, and legal. Key changes include shorter release cycles, a focus on uptime and scalability, subscription-based billing, and an emphasis on customer success. Resistance to change is identified as one of the "quiet killers" of a successful transition to SaaS. Vision, leadership, and buy-in across departments is emphasized as important for a successful paradigm shift to a service model.
This white paper addresses the new challenges in software protection for the .NET Framework in addition to providing a variety means for protecting your applications.
The document discusses how software vendors can gain valuable customer insights from tracking usage data in cloud-based software as a service (SaaS) applications. It outlines some of the challenges of collecting this data for SaaS applications compared to on-premise software. Analyzing usage data can help vendors improve products, marketing, pricing, and renewals. However, many vendors currently do not have systems to accurately assess customer usage. The document provides examples of how usage data has helped other vendors build better offerings, find new business opportunities, increase customer satisfaction and improve sales.
This presentation discusses licensing challenges posed by new technologies like cloud computing and mobile platforms. It proposes addressing these challenges by moving licensing delivery to the cloud. This allows usage-based licensing models and gathering business intelligence on usage. Capturing usage data provides opportunities to improve products, marketing and sales based on how customers actually use features.
Dokumen tersebut membahas standar isi dan proses kurikulum di sekolah/madrasah. Beberapa poin penting yang diatur mencakup jumlah muatan kurikulum, mekanisme pengembangan kurikulum bersama pihak terkait, dan prinsip pelaksanaan kurikulum sesuai kondisi lingkungan. Dokumen ini juga mengatur tentang penyusunan silabus dan rencana pelaksanaan pembelajaran oleh guru sesuai pedoman yang ditetapkan.
The SHARE Project is a European resettlement network for cities and regions that aims to build capacity for refugee resettlement. It has over 1300 members from 17 European countries including cities, NGOs, international organizations, and national governments. The network facilitates practice exchanges and has a goal of European countries offering 20,000 resettlement places by 2020. Member cities and regions participate in exchange visits to learn from each other's resettlement programs and best practices.
The document discusses questions that were answered on the website Hootoo.com about what may happen to Apple after Steve Jobs' death. It suggests that the worst consequence could be a step down in product quality if shareholders prioritize profits over innovation. However, Apple may still succeed without Jobs as long as they continue his spirit of innovation and focus on building quality products. The document also notes that Apple's share price did not change much in response to Jobs' resignation or death, and that the new CEO Tim Cook is respected and has experience running Apple when Jobs was absent previously. It concludes by speculating that Apple may try to disrupt the TV industry next in a similar way they disrupted music and phones.
This document discusses the advantages of HR automation software delivered as software-as-a-service (SaaS). It notes that nearly 90% of organizations plan to maintain or increase their usage of SaaS solutions due to lower total cost of ownership compared to on-premise software, easier deployment, and lack of in-house IT resources. The document outlines key benefits of SaaS for HR automation such as 24/7 access, lower costs, automatic upgrades, and scalability. It also discusses factors that differentiate true multi-tenant SaaS solutions from those that are not fully cloud-based.
Software as a Service (SaaS) for the Supply ChainSteve Keifer
This white paper offers an overview of the features and benefits of a SaaS model. It then discusses SaaS in the context of Supply Chain applications and B2B e-Commerce.
The document discusses the transition to using Software as a Service (SaaS) models for software delivery and development. Key points include:
- SaaS allows companies to access software applications via the internet on a subscription basis rather than purchasing licenses, reducing costs.
- Adopting a SaaS model can significantly reduce IT infrastructure and management costs while providing easier access to updates compared to traditional licensed software.
- Partnering with a SaaS product engineering company can help accelerate product development cycles and reduce engineering costs through access to skilled resources and development expertise.
Today, Companies increase their usage of SaaS across multiple applications, larger user base and most mission-critical applications. An interesting trend now is that the established large enterprises are beginning to replace on-premise applications with on-Demand applications based on SaaS principles.
SaaS (Software as a Service) offers potential cost savings over traditional on-premise software by reducing upfront costs, ongoing maintenance and support costs, and providing more flexibility. However, organizations need to carefully calculate the TCO (total cost of ownership) and ROI (return on investment) of moving applications to SaaS. This requires considering various costs like subscriptions, setup, customization, as well as potential benefits like scalability, reduced IT workload, and vendor accountability. Performing a thorough analysis can help organizations determine if and how SaaS makes economic sense for their needs.
SaaS, or Software-as-a-Service, is a software delivery model where a third-party provider hosts and delivers software applications over the internet to customers, who access the software through a web browser or mobile app. Here are some reasons why businesses choose to use SaaS:
SaaS, or Software-as-a-Service, is a software delivery model where a third-party provider hosts and delivers software applications over the internet to customers, who access the software through a web browser or mobile app. Here are some reasons why businesses choose to use SaaS:
SaaS Software Development Best Practices_ 2024.pdfJPLoft Solutions
Software architects and CTOs are accountable for the creation of new products while improving the efficiency of technology. Your choice of architecture determines the amount of control you can exercise over your infrastructure and data storage requirements and opportunities for customization.
The SaaS Business Model: All Information For SaaS-based company ISHIR
The SaaS business model is also known as a SaaS revenue strategy, which helps generate income from cloud-hosted Software. Know about SaaS benefits, how SaaS companies work, and examples of SaaS Companies. Read complete information in the blog.
Software as a service (SaaS) is a software distribution model where applications are hosted by a vendor and accessed online by customers. With SaaS, software is deployed as an online service rather than installed locally. This reduces upfront costs for customers and allows vendors to easily update applications for all users. Key considerations for SaaS include enabling applications to securely serve multiple customers simultaneously and facilitating some level of customization.
This document discusses Software as a Service (SaaS). It defines SaaS as software deployed as a hosted service and accessed over the Internet. Key advantages of SaaS include lower costs since users pay monthly subscription fees rather than large upfront licensing fees. The document outlines the history and growth of SaaS, describing how it has evolved from early ASP models. It also discusses the paradigm shifts required in application architecture and business models for SaaS, including moving to a multi-tenant architecture that is scalable and configurable. The speaker emphasizes that SaaS will have a major impact on the software industry and future IT professionals should closely track developments in SaaS.
The majority of survey respondents (71%) are unfamiliar with or in the education phase of cloud computing, while only 11% have plans to implement cloud initiatives in 2010. Many software companies are rapidly expanding their portfolio of cloud offerings across infrastructure, platform, and software services. Transitioning to a software-as-a-service (SaaS) model provides benefits like reduced costs, faster implementation, scalability, and security, but established software companies face challenges adapting their business models, partnerships, and operations to the SaaS approach. Recurring revenue from SaaS contracts is a key driver of higher business valuations for software companies.
Understanding How A Company Can Benefit From A SAAS ApplicationGlobalLogic, Inc.
New technologies especially those that work with “cloud” computing are continuously providing companies with new ways to solve business problems. Software as a Service application, also known on-demand software," does bring significant never-before-offered advantages for organizations looking for new financial, delivery and staffing alternatives related to business systems operations.
This document provides an overview of Software as a Service (SaaS). It defines SaaS as a software delivery model where software is hosted in the cloud and accessed via the internet. The document discusses the architecture of SaaS, including that it is scalable, multi-tenant, and configurable. It also covers the financial considerations of SaaS, including various pricing models. A case study of a company that rents software on an hourly/monthly basis is presented. The document concludes that while there are initial hurdles to adopting SaaS, there are long term benefits such as easy access, lower costs, and continuous upgrades.
The document discusses key concepts related to Software as a Service (SaaS) and the DNA of SaaS companies. It notes that SaaS represents a philosophical shift towards more customer-centric solutions delivered as a service through web-based applications. SaaS companies operate using a single code base that supports thousands of customers through a multi-tenant architecture and offer frequent upgrades on a pay-as-you-go model. The DNA of SaaS companies includes service-based relationships, web-delivered applications, and ongoing support through centralized hosting and management.
This document provides guidance for traditional software companies transitioning to a Software as a Service (SaaS) model. It discusses the industry shift toward SaaS delivery and the challenges and opportunities companies will face. It outlines four transition archetypes - traditional, hybrid, cross-over, pure SaaS - and recommends a five step process for a successful transition: 1) start with the desired end state in mind, 2) think customers first, 3) build a lead generation machine, 4) sell a service not a product, and 5) drive customer success. The document provides advice on segmentation, costs, automation, metrics and building a customer community to support the transition.
SaaS Business Model: A Beginner Tech Entrepreneur’s Guide For 2023Sterling Technolabs
SaaS, or software as a service, is a delivery model in which centrally hosted software is licensed to customers via a subscription plan. Any company that leases its software through a central, cloud-based system can be said to be a SaaS company. To know more about SaaS development, Visit us at- https://www.sterlingtechnolabs.com/saas-development/, Call us at- 707 670 3003, Email us at- info@sterlingtechnolabs.com
Software as a Service (SaaS): Custom Acquisition Strategies - LabGroup.com.auSusan Diaz
Software as a Service (SaaS) has the potential to transform the way information-technology (IT) departments relate to and even think about their role as providers of computing services to the rest of the enterprise.
Navigating the Top Six Business Challenges of Delivering Software as a Service LicensingLive! - SafeNet
1) Software vendors face challenges when delivering software as a service, including enforcing contract compliance, limited feature bundling, costly repackaging, restrictive subscription models, manual usage tracking, and fragmented operations.
2) Many cloud providers still use paper contracts but find customers often exceed usage terms without realizing. Proper controls are needed to monitor usage and keep customers in compliance.
3) The software industry is accelerating towards cloud-based solutions, with 30% of enterprise spending on new software in 2010 being cloud-based, predicted to rise to 50% of new software budgets by 2014.
This document provides an overview of Software as a Service (SaaS), including its benefits and considerations for companies. SaaS delivers software applications via the internet instead of installing them locally. Key benefits include lower and more predictable costs, reduced IT expenses, constant software updates, high availability, and mobility. However, companies must consider that SaaS requires an internet connection to function and depends on the security and availability of the provider's infrastructure. Overall, SaaS can help companies increase flexibility and decrease costs compared to locally installed software.
Similar to SaaS Pricing and Packaging Strategies (20)
VSTEP, a European developer of simulation software, implemented SafeNet Sentinel Hardware Keys to protect their new software and enable remote license updates. This allowed VSTEP to offer flexible licensing models and trial versions while preventing piracy. SafeNet provided fast responses and support, allowing VSTEP to meet deadlines for product launch. With Sentinel Keys, VSTEP can securely update licenses remotely as customers purchase additional modules.
Hybrid Customer Insight - Data Collection and Analysis from On-premise and in...LicensingLive! - SafeNet
The document discusses cloud computing and its adoption trends. It defines cloud computing as standardized IT capabilities delivered via the internet in a pay-per-use, self-service manner. The cloud offers businesses value through cost savings, agility, and access to advanced technologies. While smaller companies have led cloud adoption, larger enterprises are increasingly using cloud services for business applications and infrastructure.
This document provides a summary of a presentation about integrating billing and licensing in a cloud environment. It discusses the new software monetization lifecycle, which includes 4 steps: 1) packaging your offering, 2) delivering your service, 3) billing and collecting for your service, and 4) driving incremental revenue and renewals. It also covers lessons learned, such as billing being only one part of recurring revenue and the need for solutions to integrate with other systems. Customer use cases from Issuu and VMware are presented that highlight their challenges and successes with Aria Systems.
The document discusses practical approaches for independent software vendors (ISVs) to adopt cloud computing. It outlines 10 steps ISVs can take including setting expectations, gathering requirements, selecting partners and platforms, designing for the cloud, development, testing, packaging, deployment, maintenance, and risk assessment. Throughout each step, the document provides challenges ISVs may face and recommendations to address those challenges during the cloud adoption process.
The document discusses how cloud licensing is revolutionizing traditional licensing models. It describes how cloud licensing allows for continuous, usage-based monetization through features like auto-activation and updates from a connected backend. This enables new licensing approaches like post-paid usage billing and harnessing usage data for customer intelligence. The document also discusses hybrid licensing approaches and how Sentinel Cloud Services provides a solution for feature-based provisioning, usage control, and analytics to support flexible cloud licensing.
VSM Software Ltd. protects its specialized embroidery software while allowing easy activation and updates for customers. It migrated from HASP4 to Sentinel HASP HL keys, which provide impenetrable protection and make software activation and updates simpler. This allows VSM to sell additional encrypted software packages through an online store, increasing revenue. Sentinel HASP HL also keeps customers happy with easy-to-use, reliable security.
Geocap replaced its FLEXlm licensing platform with SafeNet's Sentinel RMS due to FLEXlm's insufficient management tools and lack of support. Sentinel RMS provided Geocap with comprehensive APIs, multiple licensing options, and cross-platform support to improve license management. The new solution reduced administrative overhead and allowed Geocap to tailor licenses to its business needs.
This global software company was struggling to manage licenses across nine different systems from recent acquisitions. This caused delays, errors and a poor customer experience. They implemented SafeNet's Sentinel EMS to streamline licensing which integrated easily and automated processes. This centralized management of licenses, reduced support calls by 48% and enabled faster order fulfillment and a better customer experience.
INEA, a Slovenian company that develops industrial automation and energy management systems, implemented SafeNet Sentinel HASP SL to protect its valuable software from unauthorized use. Sentinel HASP SL provided flexible license deployment across virtualized environments and increased security, allowing INEA to sell more licenses and meet customer needs. The solution helped INEA expand into new markets while transitioning to virtual servers in a cost-effective way.
Key Traffic Systems, a UK traffic management software company, upgraded their licensing solution from HASP HL to include HASP SL to allow for software-based licensing. This allowed them to enter new markets that required electronic software delivery and provided more flexibility for their user base. The upgrade was seamless using the HASP toolset and provided benefits like increased sales, ease of implementation, and effective license management through the Business Studio admin control center.
DIP Tech, a leading supplier of digital printing systems for glass, needed to protect its valuable software and IP for its unique glass printing technology. It implemented Sentinel HASP to provide flexible software licensing and robust protection against piracy and reverse engineering. With HASP, DIP Tech can now offer trial versions, feature-based licensing, and improved software distribution. This has increased sales and enhanced the customer experience while better utilizing company resources.
Iritech produces biometric identity matching software and uses Sentinel HASP to protect its intellectual property. Sentinel HASP allows Iritech to license its software securely through hardware or software keys, increasing sales by expanding into new markets. It provides flexibility in licensing options and easy remote management of software activations and updates. Using Sentinel HASP has given Iritech the confidence to grow its business while preventing theft of its valuable biometric algorithms.
CPC, a leader in captioning technology, relies on SafeNet Sentinel HASP to protect and license its software. Sentinel HASP allows CPC to license its $2,000-$9,000 software to single machines, preventing unauthorized use. This protects CPC's revenue and intellectual property. Sentinel HASP also makes it easy for CPC to remotely update software licenses and upgrade keys for new software versions, allowing CPC to adapt to changing technologies while maintaining protection. Using Sentinel HASP, CPC can offer innovative captioning software securely without risk of being unprotected.
RiserTec implemented Sentinel HASP to protect its valuable intellectual property in specialized engineering worksheets. HASP allows RiserTec to license different worksheet models differently and sell them while ensuring the calculations are not stolen or misused. HASP provides easy-to-use protection that is transparent to users and allows worksheets to be run offshore. RiserTec can now securely monetize its worksheets and feels well protected moving forward.
- Developing a homegrown software licensing solution involves significant upfront costs including planning and initial development that requires years of resources.
- Maintaining and updating the system to adapt to changing market needs also demands ongoing dedication of developers.
- Software protection is a critical part of licensing but requires accounting for a wide range of customers and recurring costs to constantly update against new threats. Developing these protections in-house makes the solution more complex and costly.
The document discusses the Sentinel HASP Envelope, which provides automatic protection for software applications through file encryption, code obfuscation, and anti-debugging techniques. It summarizes key features of the Sentinel HASP Envelope, including one-click protection, multiple calls to the connected hardware key for validation, and protection of intellectual property and trade secrets. The Envelope also provides multi-layered protection through dynamic arrangement of protection code layers to obscure the connection between the application and hardware key.
Join Phil Wainewright, Software industry analyst, blogger and consultant, as he walks the audience though SaaS app monetization best practices. Phil covers topics including but not limited to service pricing, packaging, GTM best practices, and more. The presentation was prepared for and presented at SafeNet's LicensingLive - Monetizing Software in the Cloud event series in April 2011.
The document is a brochure for Sentinel Family software solutions that provide software protection, licensing, and management. It discusses:
1) The challenges software publishers face in growing business in a competitive environment and the need for flexible licensing models.
2) How SafeNet's Sentinel solutions can help secure revenue, protect intellectual property, and maximize profitability through flexible licensing and management tools.
3) An overview of SafeNet's Sentinel product line, including solutions for software licensing security, flexible enterprise licensing, cloud services, and professional services.
Unlock the Future of Search with MongoDB Atlas_ Vector Search Unleashed.pdfMalak Abu Hammad
Discover how MongoDB Atlas and vector search technology can revolutionize your application's search capabilities. This comprehensive presentation covers:
* What is Vector Search?
* Importance and benefits of vector search
* Practical use cases across various industries
* Step-by-step implementation guide
* Live demos with code snippets
* Enhancing LLM capabilities with vector search
* Best practices and optimization strategies
Perfect for developers, AI enthusiasts, and tech leaders. Learn how to leverage MongoDB Atlas to deliver highly relevant, context-aware search results, transforming your data retrieval process. Stay ahead in tech innovation and maximize the potential of your applications.
#MongoDB #VectorSearch #AI #SemanticSearch #TechInnovation #DataScience #LLM #MachineLearning #SearchTechnology
Monitoring and Managing Anomaly Detection on OpenShift.pdfTosin Akinosho
Monitoring and Managing Anomaly Detection on OpenShift
Overview
Dive into the world of anomaly detection on edge devices with our comprehensive hands-on tutorial. This SlideShare presentation will guide you through the entire process, from data collection and model training to edge deployment and real-time monitoring. Perfect for those looking to implement robust anomaly detection systems on resource-constrained IoT/edge devices.
Key Topics Covered
1. Introduction to Anomaly Detection
- Understand the fundamentals of anomaly detection and its importance in identifying unusual behavior or failures in systems.
2. Understanding Edge (IoT)
- Learn about edge computing and IoT, and how they enable real-time data processing and decision-making at the source.
3. What is ArgoCD?
- Discover ArgoCD, a declarative, GitOps continuous delivery tool for Kubernetes, and its role in deploying applications on edge devices.
4. Deployment Using ArgoCD for Edge Devices
- Step-by-step guide on deploying anomaly detection models on edge devices using ArgoCD.
5. Introduction to Apache Kafka and S3
- Explore Apache Kafka for real-time data streaming and Amazon S3 for scalable storage solutions.
6. Viewing Kafka Messages in the Data Lake
- Learn how to view and analyze Kafka messages stored in a data lake for better insights.
7. What is Prometheus?
- Get to know Prometheus, an open-source monitoring and alerting toolkit, and its application in monitoring edge devices.
8. Monitoring Application Metrics with Prometheus
- Detailed instructions on setting up Prometheus to monitor the performance and health of your anomaly detection system.
9. What is Camel K?
- Introduction to Camel K, a lightweight integration framework built on Apache Camel, designed for Kubernetes.
10. Configuring Camel K Integrations for Data Pipelines
- Learn how to configure Camel K for seamless data pipeline integrations in your anomaly detection workflow.
11. What is a Jupyter Notebook?
- Overview of Jupyter Notebooks, an open-source web application for creating and sharing documents with live code, equations, visualizations, and narrative text.
12. Jupyter Notebooks with Code Examples
- Hands-on examples and code snippets in Jupyter Notebooks to help you implement and test anomaly detection models.
HCL Notes and Domino License Cost Reduction in the World of DLAUpanagenda
Webinar Recording: https://www.panagenda.com/webinars/hcl-notes-and-domino-license-cost-reduction-in-the-world-of-dlau/
The introduction of DLAU and the CCB & CCX licensing model caused quite a stir in the HCL community. As a Notes and Domino customer, you may have faced challenges with unexpected user counts and license costs. You probably have questions on how this new licensing approach works and how to benefit from it. Most importantly, you likely have budget constraints and want to save money where possible. Don’t worry, we can help with all of this!
We’ll show you how to fix common misconfigurations that cause higher-than-expected user counts, and how to identify accounts which you can deactivate to save money. There are also frequent patterns that can cause unnecessary cost, like using a person document instead of a mail-in for shared mailboxes. We’ll provide examples and solutions for those as well. And naturally we’ll explain the new licensing model.
Join HCL Ambassador Marc Thomas in this webinar with a special guest appearance from Franz Walder. It will give you the tools and know-how to stay on top of what is going on with Domino licensing. You will be able lower your cost through an optimized configuration and keep it low going forward.
These topics will be covered
- Reducing license cost by finding and fixing misconfigurations and superfluous accounts
- How do CCB and CCX licenses really work?
- Understanding the DLAU tool and how to best utilize it
- Tips for common problem areas, like team mailboxes, functional/test users, etc
- Practical examples and best practices to implement right away
Essentials of Automations: The Art of Triggers and Actions in FMESafe Software
In this second installment of our Essentials of Automations webinar series, we’ll explore the landscape of triggers and actions, guiding you through the nuances of authoring and adapting workspaces for seamless automations. Gain an understanding of the full spectrum of triggers and actions available in FME, empowering you to enhance your workspaces for efficient automation.
We’ll kick things off by showcasing the most commonly used event-based triggers, introducing you to various automation workflows like manual triggers, schedules, directory watchers, and more. Plus, see how these elements play out in real scenarios.
Whether you’re tweaking your current setup or building from the ground up, this session will arm you with the tools and insights needed to transform your FME usage into a powerhouse of productivity. Join us to discover effective strategies that simplify complex processes, enhancing your productivity and transforming your data management practices with FME. Let’s turn complexity into clarity and make your workspaces work wonders!
UiPath Test Automation using UiPath Test Suite series, part 6DianaGray10
Welcome to UiPath Test Automation using UiPath Test Suite series part 6. In this session, we will cover Test Automation with generative AI and Open AI.
UiPath Test Automation with generative AI and Open AI webinar offers an in-depth exploration of leveraging cutting-edge technologies for test automation within the UiPath platform. Attendees will delve into the integration of generative AI, a test automation solution, with Open AI advanced natural language processing capabilities.
Throughout the session, participants will discover how this synergy empowers testers to automate repetitive tasks, enhance testing accuracy, and expedite the software testing life cycle. Topics covered include the seamless integration process, practical use cases, and the benefits of harnessing AI-driven automation for UiPath testing initiatives. By attending this webinar, testers, and automation professionals can gain valuable insights into harnessing the power of AI to optimize their test automation workflows within the UiPath ecosystem, ultimately driving efficiency and quality in software development processes.
What will you get from this session?
1. Insights into integrating generative AI.
2. Understanding how this integration enhances test automation within the UiPath platform
3. Practical demonstrations
4. Exploration of real-world use cases illustrating the benefits of AI-driven test automation for UiPath
Topics covered:
What is generative AI
Test Automation with generative AI and Open AI.
UiPath integration with generative AI
Speaker:
Deepak Rai, Automation Practice Lead, Boundaryless Group and UiPath MVP
Full-RAG: A modern architecture for hyper-personalizationZilliz
Mike Del Balso, CEO & Co-Founder at Tecton, presents "Full RAG," a novel approach to AI recommendation systems, aiming to push beyond the limitations of traditional models through a deep integration of contextual insights and real-time data, leveraging the Retrieval-Augmented Generation architecture. This talk will outline Full RAG's potential to significantly enhance personalization, address engineering challenges such as data management and model training, and introduce data enrichment with reranking as a key solution. Attendees will gain crucial insights into the importance of hyperpersonalization in AI, the capabilities of Full RAG for advanced personalization, and strategies for managing complex data integrations for deploying cutting-edge AI solutions.
Building Production Ready Search Pipelines with Spark and MilvusZilliz
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Taking AI to the Next Level in Manufacturing.pdfssuserfac0301
Read Taking AI to the Next Level in Manufacturing to gain insights on AI adoption in the manufacturing industry, such as:
1. How quickly AI is being implemented in manufacturing.
2. Which barriers stand in the way of AI adoption.
3. How data quality and governance form the backbone of AI.
4. Organizational processes and structures that may inhibit effective AI adoption.
6. Ideas and approaches to help build your organization's AI strategy.
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Driving Business Innovation: Latest Generative AI Advancements & Success StorySafe Software
Are you ready to revolutionize how you handle data? Join us for a webinar where we’ll bring you up to speed with the latest advancements in Generative AI technology and discover how leveraging FME with tools from giants like Google Gemini, Amazon, and Microsoft OpenAI can supercharge your workflow efficiency.
During the hour, we’ll take you through:
Guest Speaker Segment with Hannah Barrington: Dive into the world of dynamic real estate marketing with Hannah, the Marketing Manager at Workspace Group. Hear firsthand how their team generates engaging descriptions for thousands of office units by integrating diverse data sources—from PDF floorplans to web pages—using FME transformers, like OpenAIVisionConnector and AnthropicVisionConnector. This use case will show you how GenAI can streamline content creation for marketing across the board.
Ollama Use Case: Learn how Scenario Specialist Dmitri Bagh has utilized Ollama within FME to input data, create custom models, and enhance security protocols. This segment will include demos to illustrate the full capabilities of FME in AI-driven processes.
Custom AI Models: Discover how to leverage FME to build personalized AI models using your data. Whether it’s populating a model with local data for added security or integrating public AI tools, find out how FME facilitates a versatile and secure approach to AI.
We’ll wrap up with a live Q&A session where you can engage with our experts on your specific use cases, and learn more about optimizing your data workflows with AI.
This webinar is ideal for professionals seeking to harness the power of AI within their data management systems while ensuring high levels of customization and security. Whether you're a novice or an expert, gain actionable insights and strategies to elevate your data processes. Join us to see how FME and AI can revolutionize how you work with data!
Cosa hanno in comune un mattoncino Lego e la backdoor XZ?Speck&Tech
ABSTRACT: A prima vista, un mattoncino Lego e la backdoor XZ potrebbero avere in comune il fatto di essere entrambi blocchi di costruzione, o dipendenze di progetti creativi e software. La realtà è che un mattoncino Lego e il caso della backdoor XZ hanno molto di più di tutto ciò in comune.
Partecipate alla presentazione per immergervi in una storia di interoperabilità, standard e formati aperti, per poi discutere del ruolo importante che i contributori hanno in una comunità open source sostenibile.
BIO: Sostenitrice del software libero e dei formati standard e aperti. È stata un membro attivo dei progetti Fedora e openSUSE e ha co-fondato l'Associazione LibreItalia dove è stata coinvolta in diversi eventi, migrazioni e formazione relativi a LibreOffice. In precedenza ha lavorato a migrazioni e corsi di formazione su LibreOffice per diverse amministrazioni pubbliche e privati. Da gennaio 2020 lavora in SUSE come Software Release Engineer per Uyuni e SUSE Manager e quando non segue la sua passione per i computer e per Geeko coltiva la sua curiosità per l'astronomia (da cui deriva il suo nickname deneb_alpha).
Cosa hanno in comune un mattoncino Lego e la backdoor XZ?
SaaS Pricing and Packaging Strategies
1. Lucrative Pricing and Packaging Strategies for the
Cloud Today, Tomorrow, and Beyond.
wHitEPAPEr
Executive Summary
Software pricing and packaging is an art form regardless of whether it’s delivered as a service
A common framework has
or as physical on-premise software. There is also a lot of science involved. This paper explores
emerged for how companies
the most critical aspects of introducing and managing SaaS applications and presents ISVs
are developing successful
with ideas on how to build, execute and manage effective software pricing
strategies for pricing software
and packaging strategies for Cloud services.
in the Cloud.
You will find valuable information to help ensure success, whether your objective is to build a
customer base for a new offering, to introduce a Cloud service to an already established on-
premise customer or, ultimately, to migrate all of your on-premise business to the Cloud. This
paper looks at emerging best practices and real-world ISV successes that will help you feel
confident in your ability to tackle software pricing and packaging now and in the future.
Pricing & Packaging: Both Art & Science
Pricing for software and service is very much an art but there’s also a lot of science involved.
A common framework has emerged for how companies are developing successful strategies
for pricing software in the Cloud. As the SaaS model continues to evolve, there are a variety of
case studies and best practices we can use to identify the typical components of almost every
successful SaaS strategy.
How SaaS is Different
One of the things that software as a service enables ISVs to do is to get away from what’s been
wrong with traditional on-premise software pricing in the past. In the distributed-computing
client-server days on-premise software was sold through a perpetual license with an added
maintenance contract. With a perpetual license model, customers are incented to buy a lot
of seats up front and then pay an ongoing maintenance fee on top that each year. For many
reasons this does not work in every customer scenario.
That being said, most software revenue today is still associated with the perpetual “plus
maintenance” model. However, it is important to note that the fastest growing portion of
today’s software industry is associated with subscription revenues, whether a software as a
service or an on-premise solution.
With software as a service, you are giving resource access to a customer over the Web as a
service. There are some interesting things you can do in terms of the types of metrics and the
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 1
2. types of meters that you offer, just by nature of the fact that you or a service provider that you
designate is running a single instance of the software application for many customers.
There is a great deal of tracking you can do in that environment that is hard to do in an on-
premise environment, especially after the fact when the customer has already installed
the software and has an established way of pricing. So that, in and of itself, and the whole
subscription model, brings many unique features and attributes to a fast-pricing approach, and
also opens a realm of possibilities that really haven’t been available in the software world before.
And as transition is made away from a physical product to a SaaS model, the entire process
Making a transition away from becomes much more relationship focused. So instead of a physical product, your customers will
a physical product and moving receive access to software resources that will help complete a business process for them. You,
to a SaaS model, means the
the vendor, are providing the software service and the customer is making an ongoing decision
entire process is much more
as to whether to pay for it based upon the value they derive. SaaS is much more of an iterative
relationship focused.
process, which can start off small and continue growing over time.
As an ISV considering the software as a service business model, it’s important to understand
The high-level description of exactly how SaaS differs from traditional on-premise product and business models. The high-
SaaS as an architecture and level description of SaaS as an architecture and delivery model focuses on shared infrastructure,
delivery model focuses on
shared applications, and subscription payments. In theory, it all sounds rather easy for a
shared infrastructure, shared
traditional ISV to deliver. But in reality, that simplicity can sometimes mask the complexity
applications, and subscription
required to execute SaaS correctly.
payments.
Software as a Service Characteristics and requirements
There are many service characteristics that ISVs have to consider. As you look at the following
list, you will see that each scenario carries a new perspective on software creation, delivery,
and the product lifecycle, which most traditional providers don’t have. There are also important
requirements that ISVs considering adding a SaaS product or fully transitioning to SaaS will
have to meet.
1. SaaS applications are typically hosted off-site and by a third-party provider.
“In-the-cloud” execution, for most practical purposes, means your software is hosted at an
off-site location by a third-party provider.
When software is offered as a service, ISVs or their designee provide users with a Service
Level Agreement (SLA) that will guarantee most aspects of service delivery, including
technology and customer service.
2. SaaS applications are accessed via the internet. SaaS applications are accessed through a
standards-based, universal network which also requires ISVs to provide N-scalable service.
3. SaaS requires minimal or no it skills to implement. Since users access your hosted
applications online, the specifications of service are simplified and there is no lengthy time
to implement – unlike many on-premise systems. As a result,ISVs are required to provide real
time service and, in many cases, are working with non-techie types within the enterprise.
4. Automated provisioning. – Inherent to the SaaS delivery model are self-service requesting,
near real-time deployment, and dynamic and fine-grained scaling. It’s a transactional
environment that requires ISVs to provide dynamic scaling and flexing of capacity.
5. Fine-grained pricing. Most SaaS contracts include fine-grained pricing based upon
consumption. ISVs must be able to provide and support usage-based pricing (though some
mask this granularity with long-term, fixed price agreements.) ISVs pricing strategies should
be based upon on-going delivery of shared value.
6. Shared resources/common versions – Configure vs. customize, with integrations and client-
side optimization. ISVs provide a single code base, multi-tenant architecture.
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 2
3. Key Components of SaaS Contracts
There are many interesting and exciting things you can do with SaaS packaging and pricing.
What follows is an explanation of some of the key components that should be part of every
SaaS project.
A subscription model is the first and most basic component. With a subscription model, users
pay on a recurring basis to access software as an online service. As long as the customer
continues to pay for that access, they get access.
Pricing metrics are another component of SaaS contracts. Pricing is typically user based. With
SaaS, there are a variety of user-based metrics you could use because of the metering and
tracking capabilities available when you run an instance of an application for the customer, as
opposed to the customer running an on-premise application. The most simplistic example would
be to measure how many business users are accessing the service. But much more sophisticated
scenarios exist. For instance, which features are used most often, or which features are most
popular at a particular time of day or particular segment of the market? There are many
possibilities. But presently, there is not as much experimentation among SaaS vendors as you
might expect.
The contract term is also a key component of any SaaS contract. From a term perspective, you
could specify month to month or multi-year, but, on average, where things tend to pan out is with
an annual contract. And here’s why. As a consumer or a business user, do you really want to cut
a PO every month? Do you really want to go through the decision-making process on this Cloud
application every month? No. Once the decision has been made, most customers would rather
just set it and forget it. For trials or evaluation purposes, it might make sense to offer shorter-
term contracts. But once customers are ready to commit, chances are they will sign a one-year
contract. This is the nature of a subscription approach.
One of the customer challenges (or fears) when it comes to contract terms is that once they
become reliant on the application, the ISV will raise the price for the next term. It’s a very
common scenario. And so to lock in pricing, business customers will often negotiate multi-year
contracts. Best practice advice is to take a very customer-friendly approach and offer term
options. With SaaS contracts, it’s quite common to see a one-year, a three-year, and even a five-
year option. And the per-unit price is reduced as the term scales out in time.
Two more important contract components are billing and revenue recognition, which go hand
Subscription revenue must in hand. Billing, even if it’s for a one-year term, is typically up front. So a customer that signs
be recognized as the service for a one-year term generally pays for that one-year term at the beginning of the service. The
is delivered revenue, of course, is not recognized at that point in time because subscription revenue must
be recognized as the service is delivered, which is part of the revenue-recognition rules around
subscriptions and software as a service.
Maintenance revenue terms work the same way. Revenue recognition is ratable over the term of
the agreement. Though SaaS implementations are much shorter and on a much smaller scale
than an on-premise implementation there may also be professional service start-up charges
associated with signing a new customer. The professional services component is recognized on
a different schedule than the actual subscription service.
A Service-Level Agreement (SLA) is also an important component of SaaS contracts. When
software is offered as a service, ISVs or their designee provide users with an SLA that guarantees
most aspects of service delivery, including technology and customer service. The customer
service guarantees often include availability of support resources and response time on
technical support requests. The technology guarantees can include error resolution time
guarantees, system response time guarantees, and almost always include system availability
or uptime guarantees. If service levels are not met, it can negatively impact revenue for the ISV
because money is given back to the customer. SLAs with money-back terms are a standard that
started with telecom service providers and ASPs many years ago.
A component that is unique to SaaS contracts is the dynamic scale up and down. If you
consider the on-premise, traditional license-plus-maintenance model, there really is no way
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 3
4. to scale down from an accounting perspective, especially because perpetual license revenue
is recognized up front. It is difficult to give licenses back to a software company that’s already
recognized that revenue. There are sometimes exceptions made for very large and important
accounts in specific cases, but it’s definitely not part of standard policy.
On the flip side, when subscribing to the software and receiving access to it during a defined
period of time, the scaling up and scaling down is a lot easier from a back- end accounting
perspective—and it’s certainly expected from a customer perspective. When you get to the more
utility or actual pay-per-use (not pay-per-user) pricing models, you have to think about using
a metered approach that scales up and down dynamically, meaning your customer might have
different prices they’re paying within a month, or even within a day.
Keep it Simple but Not One Size Fits All
Additional SaaS contract considerations include predictability, setup fees, minimums, and
differential pricing.
Predictability. With SaaS, predictability to ISVs means consistent costs (the cost of service
per user) and recurring revenue. Predictability to users means pricing plans that provide cost
smoothing over time and cost based on consumption. These pricing criterions make it possible
to plan for more users, or increased transactions, or increased storage needs, so that they can
budget accordingly.
Best practice advice is to build pricing plans with distinct cost-based and value-based
components with relatively flat on-boarding costs to users. ISVs should also consider building
an array of tiered high-value offerings. Some examples include storage, network optimization,
integration, data cleansing/analysis, test and code QA for customizations, advanced billing
automation, etc.
Setup Fees. Traditionally, as a penalty to those users who chose to defect, SaaS providers
A poor economy and shrinking
charged high setup fees. This practice is now shifting. A poor economy and shrinking budgets
budgets have made it essential
have made it essential that ISVs ensure SaaS customers quickly receive value for their money.
that ISVs ensure SaaS
customers quickly receive Best practice advice suggests vendors remove or dramatically constrain their setup fees. Before
value for their money. determining setup fees, ISVs should ask themselves: how much will implementations actually
slow down the sales process? What amount is reasonable and how does this charge influence
my monthly recurring prices? The goal is to remove the barriers and to quickly get the customer
to value.
Minimums. Several SaaS vendors employ usage-based pricing models similar to the usage
tiers on cell phone plans. Like cell phone carriers, these ISVs have chosen to decrease their
implementation fees in order to lock in higher minimums.
Differential Pricing. Most vendors calibrate their SaaS licenses so that there is a three to four
year break-even point versus on-premise licensing investments. Larger, more established
vendors typically do not give customers a price break, but, instead, give them more options.
The up-front design of differential price plans is based on a variety of things, including brand
maturity and premium price, and must be set in the minds of buyers.
For example, consider an established ISV with an established enterprise e-mail product, with
several hundred million dollars in annual revenue and a very strong user base that employs
differential pricing. The ISV knows the average cost per user to run their product, which includes
license, maintenance, support, full-time staff, hardware, utility costs, and so on. Even though
users can get a comparable hosted e-mail solution for only pennies per user, this established
ISV, with its premium franchise, commands a consistently higher price.
So when they rolled out their hosted e-mail solution, they could employ differential pricing. They
used a benchmark price and positioned the new offering at a slight advantage to it – which, in
theory, controls price erosion. It is important to note that customers have indicated repeatedly
in surveys that they feel the value in multi-tenant architectures is that the provider will pass on
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 4
5. the lower costs to the end user. Differential pricing that is too high is seen as out of touch with
a cost-plus method or the value of the offering, and buyers may avoid it as not truly new.
It’s a balancing act to keep it simple but not one size fits all. Balancing the flexibility as your
pricing evolves, while also continuing to meet the needs of your customers as they become more
mature and more enterprise oriented. It’s important to remember that the roots of software as a
service and the Cloud are in simplicity.
At this point, you may be wondering if there are ways to easily address your pricing and
Pricing and packaging strategies packaging strategies for SaaS. The answer is yes. And it all begins with your business objectives.
should always be driven by your
business objectives. Pricing & Packaging Begins with Business Objectives
Pricing and packaging strategies should always be driven by your business objectives. In other
words, step back and take a look at the big picture. What are you trying to accomplish?
For example, are you trying to grow your customer base for a new entry into the market, or
maximize revenue from a mature offering, or trying to differentiate your offering to defend
against competitive pressures?
This paper looks at pricing and packaging from three different perspectives, and explores some
of the objectives and strategies for each.
1. A new pure-play SaaS startup, really moving out with a SaaS-only offering.
2. An established ISV with an existing on-premise portfolio, attempting to launch a new SaaS
application to a new market or customer segment.
3. An established ISV with an existing on-premise portfolio and a strong customer base wishing
The key objectives are to build to augment the existing portfolio with SaaS or even migrate over to SaaS completely.
your customer base and then to
optimize revenue. Whatever your objectives, they undoubtedly will influence which pricing and packaging
strategies you choose to help meet your financial goals.
Kick-Start a New SaaS Offering
In either of the first two scenarios above, the key objectives are to build your customer base, and
then optimize revenue.
The first step in establishing your new SaaS product or business is to build a customer base. You
need customers for market validation, revenue, product direction, and to stake a claim against
potential competitors.
Optimize
Revenues
Build Customer
Base
Next, you’ll be focused on continually growing your user base and, as the offering matures,
you will need to start concentrating on optimizing revenues through the monetization of new
features, and then by differentiating your SaaS application through packaging and various
licensing models.
Establishing Market Share
The key to establishing market share is in tying the value of your service to your pricing model
and balancing that with your business objectives. This may sound obvious, but it is important to
emphasize that one of the benefits of SaaS is that you can monetize in so many different ways.
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 5
6. When the goal is to quickly gain customer adoption and market share, it needs to be easy for
One of the benefits of SaaS is
customers to experience the core value of your offering with little or no barrier to entry. The
that you can monetize in so
following examples are just a sampling of the various models being used today to build a
many different ways.
customer base and establish market share.
Choosing which model works best for your business will depend upon your
objectives, your application, and your target market.
the Freemium Model
With the freemium model, you provide your core functionality for free and establish a pay-for-
upgrade path that includes increased functionality.
This model is recommended when the value of your offering is derived from some sort of
collaborative capabilities. Or, in other words, where there’s more value derived by individual
users and their interaction as the user base grows. Another scenario where freemium is a good
choice is when the technology or the functionality is not well understood by the market. The
freemium model is also a good option when there is a substantial increase in value to the user
if they upgrade from the free version to the paid version. With a freemium model, if it is hard to
demonstrate the value in moving to the paid version, you run the risk of getting stuck with a large
user base and no revenues. The important message here is to be very careful how you segment
your functionality between free and paid for.
LinkedIn, a social networking site for business professionals, is a good example of a successful
freemium model. LinkedIn provides a free framework upon which users can maintain their
professional network of present and prior work associates, industry colleagues, and contacts.
LinkedIn generates revenue in three ways—premium subscriptions, corporate solutions
(such as recruiting services), and advertising. They are operating profitably and 2009 revenues
exceeded $100 million. Estimates for 2010 put them at close to $200 million—Impressive
growth fueled by a rapidly growing user base and a clear differentiation in value derived from
the premium subscriptions.
the Feature-Limited Model
With the feature-limited model, you provide a relatively low-cost version of your software service
Best practice...suggests you take
to encourage rapid adoption but limit features to encourage upgrade sales. The price should
away the barriers to entry. Set
be set relative to other available solutions. For example, if you are the first vendor to offer a
a relatively low price point for a
SaaS solution in a market that has traditionally been served by on-premise solutions, then you
limited feature set and minimize
can use the established market value as your entry point for that functionality to set your own
or avoid set-up fees as much
pricing. You could also set your price at a slight discount from the market value and emphasize
as possible.
the benefits of SaaS to the customer (time to value, lower upfront costs for deployment, less
commitment, etc.). If this approach sounds familiar it’s because it is one of the models that has
been used for on-premise software for many years. However, with SaaS, there are some key
differences to consider.
• A feature-limited model is best suited to SaaS offerings that do not rely on collaboration or
community interaction to drive business growth.
• A feature-limited model is better suited to offerings that have an established market value.
• This can be the best approach for those providers that are unable to shoulder the costs of
delivering a free service in scale.
If you employ this model, best practice (as mentioned when discussing contract components
earlier) suggests you take away the barriers to entry. Set a relatively low price point for a limited
feature set and minimize or avoid setup fees as much as possible. You will also want to limit
term commitments as much as possible; likely nothing longer than one year. Depending upon
your market, you may even want to adopt a no-contracts approach to start out. You can then
incent customers to move to higher price points, longer term commitments, and the like, based
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 6
7. upon how you package and price your capabilities. It might also be beneficial to focus your
limited features on solving narrower use cases
Salesforce.com has consistently done a good job with the feature-limited model in their entry-
level offering, with revenue growth derived from organizations that increase their user bases, as
well as move up to higher-priced, more feature-rich editions.
the Pay-as-you-Grow Model
The pay-as-you-grow model is a usage-based or transaction-based model in which customers
only pay for what they use, with no recurring or base fees.
This model is dynamic and allows the most flexible pricing for customers. With this model,
customers take on very little up-front risk. Pricing is on a metered or per-unit basis and is
generally higher than fixed or tiered plans.
Real-world examples of services, in which value is closely tied to usage, are Amazon Web
Services (AWS) or Skype. The pay-as-you grow or metered use models can be very desirable
when trying to grow your customer base. Once your customers become accustomed to your
offerings and develop a consistent baseline of usage, there will be opportunities to grow
revenues and reduce their potential variability.
These are just three of the many options available with SaaS. And, once again, choosing which
The pay as you grow or metered
model (or models) will work best for your business depends upon your objectives, applications,
use models can be very desirable
and target markets. Once you’ve built a solid and growing customer base, you need to turn your
when trying to grow your
focus to growing your revenue.
customer base.
increasing Profitability
After you’ve developed a solid customer base, it is important to focus on growing revenues—
through your existing customer base and by expanding into new markets.
Take, for example, Skype, which is a free service. Beyond the free offering, they have subscription
models, as well as usage models. They’ve based their packaging and license models upon the
different segments in their customer base.
Another example is a network appliance provider that is considering adding services to their
existing product portfolio. This provider believes they could maximize their profits with a user-
based licensing model, but they recognize that in order to optimize revenue, they’d have to
offer subscription-based licensing, as well as fixed-base pricing, in order meet the needs of all
customer segments.
Another example is a pure-play SaaS startup, which went through over 50 pricing and packaging
changes in the first 18 months following launch. To gain traction and grow the business, they
were constantly changing feature sets and pricing approaches. Although this may be an extreme
example, this is common feedback about the need to be able to rework pricing and packaging
during the early stages of launching a service and on an ongoing basis. Customers expect
this agility in the SaaS world where the perception is that it is easier to adjust packaging and
licensing more dynamically.
It is important to be flexible in packaging your software services and to offer diverse licensing
It is important to be flexible in options. The examples above help illustrate how important it is to not only look at which license
packaging your software services models work best for your application and your business but also for the value proposition that
and also to offer diverse
your customers fit within.
licensing options.
Evolving an Established On-Premise Strategy to include SaaS
If you are an established ISV with a traditional on-premise software offering that you want
to augment with SaaS, you will be referred to as an ISV with a hybrid offering—meaning your
portfolio will include part on-premise software applications and part SaaS applications.
A hybrid provider is much like a hybrid vehicle. A hybrid vehicle has a traditional gasoline engine
that fuels the car. This engine is like the on-premise portion of your portfolio. Now, adding a
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 7
8. small electric motor to the hybrid vehicle makes it much more efficient, just as adding SaaS to
It is important to be flexible in your on-premise portfolio can bring efficiency to your overall business.
packaging your software
services and also to offer diverse SaaS can complement the investments you’ve already made in your on-premise portfolio. And it’s
licensing options. important to think of this not only from your viewpoint but from the viewpoint of your customers.
The investment that your customers have made in your on-premise offering over the years, and
the value they continually receive from using your software, has become ingrained.
They are comfortable using your on-premise offering, so extending the existing value with
services allows you to reinvest and increase the value that they receive. This helps to protect
your current maintenance revenue and also protects your customer base, and keeps them
focused on the value you bring to them. Looking at how SaaS can augment on-premise offerings
to solve problems is an important strategy for established on-premise ISVs.
Hybrid Pricing and Packaging Strategies
Next, we’ll explore some of the pricing and packaging strategies for hybrid offerings. But first,
They are comfortable using let’s look at yet another parallel between the hybrid vehicle and a hybrid product offering. We’ll
your on-premise offering, so call it preferred parking. If you don’t yet drive a hybrid vehicle, you probably get a little frustrated
extending the existing value when you see one of those signs in the parking lot that reads ‘Hybrid Parking Only.’ You’re
with services allows you to
thinking “Wait a minute. Why don’t I get preferential treatment?” A hybrid software product
reinvest and increase the
offering is similar to preferred parking. And here’s why.
value that they receive.
The message with this parallel is that if you’re an ISV with a mature on-premise offering, a strong
customer base, and a SaaS offering, you will receive preferential treatment because you’ll be
able to demonstrate the flexibility of leveraging your on-premise deployment and service-based
offerings to meet the needs of most any scenario.
When trying to identify how you can use SaaS to augment your current on-premise portfolio,
there are many different ways to think about it. One approach is to offer complementary
functionality in your SaaS offering—functionality that fits nicely with what you’re already
doing on premise.
Another option is to focus on increasing the value of the on premise offering by solving use
cases that cannot be solved via an on premise solution. An example of how one CAD ISV
is accomplishing this is by adding social community features to their offering. The social
interaction and collaboration allows them to more efficiently gain feedback through the
supply-chain process, the design process, and the development process.
In addition, it adds value for them and their customers because they are able to take the
collaborative intelligence gained from the user community and implement it in the form of
features and functionality that solves problems. The community functionality offers customers
better visibility into what the next iteration of the product will be and an opportunity to interact
during the development process. This use case could not be solved well using their current on
premise offering.
You could also repackage your current offering to solve different use cases. Say you have an
accounting application with a rich set of features. The core users of your application, the ones
who actually use the majority of those features, represent only about 20 to 30 percent of the
larger organization. The rest use only a small subset of the available features. This scenario is
quite common and closely follows what has become the industry standard. But, still, there is
value in creating an abbreviated version to extend to the 70 to 80 percent of users within that
organization who would prefer it. It may be best to offer it as a SaaS application. There’s really
no reason to repackage or deliver another on premise instance of your application when you
could carry out a new SaaS-based offering with just a few features to solve that need. It is
important to look for these types of opportunities.
Another good example is a graphics design company that sells to the SMB market. Internal IT
resources are generally very limited for most small- and medium-sized businesses, so SaaS
applications that require no internal IT staff are very attractive. This graphic design company
plans to add two new service offerings to their existing portfolio. The first is an external
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 8
9. storage capability to provide redundancy to their customers’ environments. The second is a
light version of their on-premise graphics application, as a service. The SaaS version would
essentially provide a markup capability. Beta feedback for the two new SaaS offerings has
been very positive.
Easing into it
When selling into your existing customer base, the ones driving the SaaS initiative within your
When selling into your existing business will have to come to terms with all the changes that will take place. Once they do, it
customer base, the ones driving doesn’t mean that your customers have, and it doesn’t mean that the rest of the organization
the SaaS initiative within your has either. It’s a transition. It is important to be considerate of the need to ease into adding a
business will have to come to SaaS application to your portfolio.
terms with all the changes that
will take place. Initially, one way to do that is to use license models that fit the current on-premise offering.
Perhaps you don’t begin with a usage-based model. Maybe, for example, you start by offering
your service as an annual subscription and align it to your maintenance renewals so that your
internal organization doesn’t have to change their processes too much in order for you to get
that service in the market. Over time, you can introduce new flexible license models that better
fit the service offerings you’ve brought to market.
the Art & Science Explained
It is very important, as a first step, to figure out how you are going to enter the market from
a pricing, packaging, and overall strategy perspective—flexible subscriptions, usage-based
models, maybe even prepaid pools, such as a pool of seats. It could also be a pool of usage;
whatever that unit of usage may be. You should also be thinking about even more flexible options,
such as overages, rollovers, or peak usage, which are popular in the mobile space.
Figuring it all out starts by doing some homework and building a business case. Generally, ISVs
When developing the price point,
begin with their on-premise perpetual license number and then think about things like current
the average break-even point
maintenance renewal and maintenance attrition, and the existing costs of goods for their
for the customer, where the cost
perpetual model. Next, they consider assumptions around what their renewal rate might be with a
of a SaaS subscription starts to
subscription.
become greater than the cost of
your existing perpetual model, When developing the price point, the average break-even point for the customer, where the cost
is somewhere around year of a SaaS subscription starts to become greater than the cost of your existing perpetual model,
three to four. is somewhere around year three to four. It doesn’t matter what type of software you have, or what
type of customer you’re selling to, the industry benchmark standard is three to four years.
Customer $700,000
$600,000
Break-Even Point $500,000
Perpetual vs. Subscription
$400,000
$300,000
$200,000
$100,000
$-
Perpetual Year 1 Year 2 Year 3 Year 4
Example for 20,000 users ... ... ...
SW License at $20/user $300,000
Industry benchmark is Maintenance at 18% $54,000 $54,000 $54,000 $54,000
equal cost to customer in Total Yearly Cost $300,000 $300,000 $300,000 $300,000
3-4 years Cumulative Cost $54,000 $54,000 $54,000 $54,000
The higher the switching Subscription
costs, or more sticky the SW License at $20/user $100,000 $100,000 $100,000 $100,000
application, the closer Maintenance at 18% $54,000 $54,000 $54,000 $54,000
to 3 years Total Yearly Cost $154,000 $154,000 $154,000 $154,000
Cumulative Cost $154,000 $308,000 $462,000 $616,000
You can then calibrate your SaaS subscription price based upon your own objectives while
considering that three-to-four-year break-even point. So, for example, if you want to incent
people to move over to the SaaS subscription, you’ll push that break–even point out. If you
want to keep customers on the perpetual model, which many cautious vendors do, then reel in
that break–even point.
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 9
10. The other thing you need to think about as you build this out is whether you want to offer one-year,
three-year, and five-year options. And, obviously, there will be some advantage to the customer,
from a pricing perspective, if they choose the five-year option versus the one-year option.
These things essentially cover the science part of the pricing and packaging formula. Everything
else you consider is art because it will have some element of your unique situation and
orientation based upon your objectives, applications, and target markets.
the Cultural Factor
The cultural factor, which is essentially the hunter/gatherer sales analogy, comes into play quite
often with an already established software on-premise vendor when attempting to augment or
fully transition the portfolio to software as a service. Everyone is excited. SaaS is going to the
high-growth portion of the overall company, but oftentimes those people end up getting very
frustrated because they realize that although they have committed to the idea of software as a
service within their business, the culture of the sales organization is still oriented around the
traditional on-premise business.
The perpetual license models of packaged software companies have spawned a culture oriented
around the hunt. Going out and getting the biggest deal, signing the giant end-user license
agreements, and then figuring out what to do with the accounts later. This type of culture doesn’t
really put much of a premium on selling subscription contracts that start off small and maybe
grow over time, and they definitely don’t put a premium on those if they interfere with their ability
to hunt the large deals.
You really have to think about the orientation of your company. The cultural factor cannot
You can come up with all the be ignored because it impacts how successful you can be. You can come up with all the
spreadsheets and build the spreadsheets and build the best business cases, but unless the entire company is truly
best business cases, but unless committed to making SaaS an important part of their business, it probably will not work. You
the entire company is truly need to foster the gatherer mentality within the organization. Making sure you live up to your
committed to making SaaS an
commitments. Helping customers feel so overjoyed that they want to continue to pay over time.
important part of their business,
Everyone, from the CEO on down, has to be committed to orienting the business around this
it probably will not work.
subscription culture, and the sales culture must be re-oriented around harvesting that
money over time.
The cultural factor is something that is difficult to define but it is extremely important. It is the
very reason so many software-as-a-service efforts within large traditional software companies
have not been as successful as they could be.
Conclusion
There are there many ways that technology can help mitigate the simplicity and flexibility
challenges faced when pricing for the SaaS customer base. From a technology standpoint, the
balance between simplicity and flexibility is an important one. To be successful with the SaaS
experience you need the following components to effectively deliver on that balance of
simplicity with flexibility.
A successful SaaS experience requires the ability to comply with service agreements, versatility
in packaging, the agility to quickly address new opportunities with sophisticated licensing
models, the ability to gather business intelligence to support usage-based billing, and strong
back-office support to deliver an integrated on premise and SaaS offering.
Best Practice Pricing and Packaging Strategies for SaaS Applications Whitepaper 10