Gartner Research

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

Published: 16 February 2017

ID: G00320479

Analyst(s): Stephen White , Robert Anderson

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
  • Impacts

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

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