Thursday May 24, 2007
Slow progress in acquiring pricing structures to support a SaaS pricing model
I'm in the process of creating a SaaS pricing model that will be related to a per user per month per capability charge. This is becoming an interesting experience!
The traditional model is that each layer or tier in the IT architecture would potentially have a capital cost, a recurring cost and a support cost. When an organisation purchases their software (if not using free open source products) or hardware there is also normally a VAR, a distributor and a vendor involved as well. So there are a number of players, each taking a bit of the pie and it is extremely hard for an organisation to put an accurate monthly cost to an experience that a user may have with on-premise software.
My goal is to create a pricing model, such that the costs are directly proportional to each per user per month per capability charge. This will mean that costs will be linear with sales and require less capital injection to increase potential demand capability.
Coming close on a couple of fronts - Thanks to those reading this that have helped...
Time to investigate the Amazon Elastic Cloud I think!
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