Customers have changed the way they want to buy software. Historically all software was sold with a perpetual licence, meaning the customer could use the software indefinitely for a one-off fee. However, over the last ten years the subscription pricing model has become more prevalent, as software as a service (SaaS) and cloud computing have become more widespread.
The pricing strategy a company chooses impacts product positioning, customer sales volumes and ultimately revenue and profitability. As a result setting the right pricing approach and levels are very important decisions for a company. Here we explore 7 areas that software companies need to weigh up when considering moving to a SaaS pricing model.
The industry trend towards SaaS creates challenges for software vendors, which fall into 3 categories:
However, there can be significant valuation benefits from moving to a subscription model. This is due to 4 key factors:
Want to read the full list of challenges and benefits, and find out how to decide whether subscription or perpetual pricing is the right option for your company? Click here to download the full two-side article as a PDF.
To find out more, contact Jonathan Davenport at firstname.lastname@example.org.< Back