SaaS, Consumption or Hybrid Pricing

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I recently read an article in Business Insider titled “Why software’s subscription model is ‘dying’ and usage-based pricing is the ‘next wave’ for cloud [applications and] services.” It describes how there is a shift happening from traditional SaaS (software-as-a-service) pricing based on users, for example, used by Slack to consumption-based (also known as usage-based or metered) pricing used by Twilio.

The article also describes a hybrid pricing model that bills customers a flat monthly fee including some amount of usage and then bills for overages when they exceed the included amount. Datadog is given as an example. Ubersmith itself also typically prices this way.

For approximately two decades now, Ubersmith has been automating billing for standard subscription pricing for our customers. For most of this time, we have also been automating billing for consumption pricing for many of our customers. Out of the box, we support consumption pricing for bandwidth, cloud, virtualization, power, backup, tickets and more.

To help manage our own business, Ubersmith has two pricing models: a more traditional SaaS “user-plus” model that charges for a combination of users, clients and devices and a consumption-based  “revenue share” model that charges a small percentage of what is invoiced through Ubersmith each month to our customers’ customers. Each includes a base fee, including usage.

Our vision is “subscription management for any business model, any infrastructure”, and our mission is “to help businesses advance their billing and related efforts, today and tomorrow.” As part of what we do in the world, we want to enable our customers to bill for whatever they can imagine with their teams now and at any time in the future.

To an extent, it feels like we’ve been living in the future and enabling the future for quite a long time now regarding consumption pricing and hybrid pricing. It’s great to see the industry shifting to consumption pricing while also remembering the benefits of having subscriptions for some products and services and having hybrid models where it makes sense.

What type(s) of pricing do you offer today? What type(s) of pricing are ideal for your business(es) in the future? What can we and our partners help you automate to further your business and/or infrastructure goals?

We’d love to learn more about what you’re doing and where you’re headed regardless of the model(s) – SaaS, consumption-based or hybrid.

 

Kurt Daniel, CEO

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