CHAPTER 1
Billing Solution Innovation Facilitated By the Growth of SaaS
Consumer preferences & technological improvements driving SaaS growth
Much of the innovation in billing is a direct result of growth in SaaS offerings. Driven by several trends, SaaS business models are proliferating and, in the process, are changing how companies and consumers approach many of the services they use.
One of the biggest trends impacting SaaS growth is a shift in end-user preferences. In today’s customer-centric world, providing options and quickly responding to consumer demand is a huge advantage. For years, innovative powerhouses like Salesforce, Workday and Adobe have been deploying SaaS business models that enable corporate and individual customers to “rent” software-based products without committing to capital expense intensive contracts.
Consumers are now seeking additional options and greater flexibility in regards to billing.
As a result, companies are turning to SaaS models that can help them deliver beyond traditional subscription models and instead offer both usage-based pricing and hybrid subscription models. Spurred on by technological advancements, cloud-based monetization solutions can deliver this functionality with ease, presenting a viable, cost-efficient option for organizations.
Supporting all emerging billing models will be an essential component of the growth and innovation of the SaaS industry moving forward.
Declining ownership
A closely related trend contributing to SaaS growth is a general decline in ownership. Without having to make big up-front investments in on-premises software installed in company-leased data centers, you can now rent software products and solutions that offer the same functionality.
SaaS platforms also provide scalability and shorter procurement cycles for critical functionality. Companies no longer need to own their systems to develop and deploy products that meet the specific needs of their customers.
Additionally, SaaS providers are also offering “a la carte” features, so that customers can choose the functionality that they actually want with their SaaS solutions.
Next-gen enterprise functionality & billing
Pushed forward by shifting consumer preferences and technological advances, transferring core functions, like billing, over to cloud-based platforms is essential. Next-generation solutions can support innovation and displace outdated legacy systems.
Recurring pricing is no longer the only model for SaaS products. You need a solution that can evolve with your organization over time and support any pricing strategy that you implement along the way.
In the following chapter, we highlight the different types of pricing models that SaaS providers can deploy with next-gen billing solutions.