SaaS Active-Usage Billing Provides Opportunity to Disrupt Software Application Markets


Archived Published: 16 February 2017 ID: G00320479

Analyst(s): |

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Summary

Consumption and active-usage billing represent opportunity and risk for SaaS providers. Leveraging pay-per-active-usage models allows technology business unit leaders of SaaS providers to disrupt application markets and drive retention by delivering enhanced value and eliminating waste.

Table of Contents

  • Analysis
  • Impacts and Recommendations
    • Pay-per-active-usage models represent an untapped opportunity for SaaS providers to deliver value and attract new clients
      • Evaluating active-usage billing versus the prevailing model of discounted suites
    • Concern associated with less-predictable revenue by providers and investors accustomed to existing models remains a significant roadblock to progress of SaaS pay-per-active-usage models considered synonymous with other cloud markets
      • What could stimulate providers to offer active-usage billing?
      • Analyzing the lifetime value of a customer
    • Suitability of pay-per-active-usage billing and opportunity to disrupt existing markets by creating value will vary by enterprise size, use case and software market
      • Impact of organization size
      • Suitability of pay-per-active-usage billing across varying software markets
  • Gartner Recommended Reading
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