Pricing in the SaaS world still reflects more like an on-premise version. SaaS applications are still sold as Standard, Professional and Enterprise version at different price.
Lets look at what email as a service providers do, take for an instance yahoo, it provides basic email services free of cost to the users, now for most of us who use yahoo for our personal emails , the basic feature set is more than sufficient. Yahoo generates revenue for this basic service through their ad program.
Now, for people who don't want to be disturbed by the ads and who want premium service levels, higher storage, POP access, it charges such customers. Now is there a lesson here for , SaaS providers? of course yes !
SaaS applications can be adopted by individuals to make their work more effective, on other other end of the spectrum it is adopted by enterprise to automate a specific business function, now why should we charge in a similar way to both, the individual might not require the SLA's like an enterprise, they might not access the services through webservices, they don't have any huge integration requirements and of course will not have problem if you serve them ads, so give them the service free and charge the enterprise, differentiate using the service levels and feature.
Technorati tags: SaaS, Software as a Service, Web 2.0, Pricing
4 comments:
"now why should we charge in a similar way to both"
where? We do charge them in varying scale!(Std, Pro, Enterprise!). Which means Standard = Free or cheap. You say Standard = Free + ads? Is that we have a problem with the naming?
Hi Prasanna,
See the existing pricing options are mainly targeted towards enterprises and not towards individual users, what i am saying is that, we need to treat individual users differently as their needs might not be as complex as an enterprise. The current pricing schemes are used against specific bundles of services and not to satisfy individual users. I dont have any problem with how these service bundles are called.
Thanks for the reply, Madhav.
I am still confused as why you call "Pricing in the SaaS world still reflects more like an on-premise version."
don't we have On-premise software, targeting individual users? I ask out of Ignorance :).
p.s.
Kindly turn on track backs in your blog and check for typos ;)
Enterprise Apps were traditionally targetted only for enterprises and they were having lot of features / complex for any individual person to procure, maintain. Now in the world of SaaS, services are very granularized and the trouble of maintaining application is also outsourced. This will motivate lot of individuals / managers to use some of these services to be more productive / effective in their day to day job. They need not make these purchases / usage as a part of their enterprise IT strategy as it solves their day to day problem (replacement for XL sheets).
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