SaaS Monetization for Applications
Building a Software Monetization Approach for Today and the Future
Software companies are racing toward SaaS deployments and subscription pricing models faster than ever - driving the growth of SaaS as “the largest market segment” of public cloud services, according to Gartner, which predicts that worldwide public cloud end user spending will be $122.6 billion in 2021 and $145.4 billion by 2022. Pausing to evaluate SaaS monetization strategy is essential for business growth.
The move to SaaS deployments and subscription licensing is here to stay. As found in the Revenera Monetization Monitor: Software Monetization Models and Strategies 2021 report, 59% of survey respondents expect that their use of the SaaS deployment model will grow in the coming 12-18 months. This trend brings numerous benefits for software producers and their end customers. Producers can offer better services, update and innovate faster, and offer more agile approaches to doing business and supporting customers. Customers benefit by not having to maintain local applications, not getting stuck on old versions, and not taking on the burden of day-to-day application management themselves.
IDC predicts 18.8% CAGR for subscription SaaS and PaaS offerings through 2025, but it also predicts 15.9% for subscription on-premise solutions. While the growth of SaaS is clear, so, too is the long-tail of on-premise software. Software suppliers need a central monetization strategy and systems across their product lines – regardless of deployment model – to reduce the complexity and operational overhead of managing products in silos. Revenera’s SaaS monetization solution enables suppliers to:
- Leverage existing investments in entitlement management and centralize back-office operations
- Maximize visibility into customer adoption of SaaS offerings
- Streamline processes for provisioning and fulfilment across product offerings and deployment models
Growth and Flexibility Through Market-Leading Entitlement Management
Software suppliers using a homegrown entitlement management solution for their initial SaaS offerings often face challenges that limit their flexibility in meeting changing customer needs. Suppliers should try to predict how many changes they expect in their monetization model once the product is launched. Simple models, often suited to low-cost products, are straightforward; changes to the price points, but not the underlying strategy, are to be expected. Business software monetization, however, often requires more iterations, change of metrics, and even customer-specific pricing. Revenera’s market-leading entitlement management enables suppliers to:
- Adopt and implement new packaging and pricing models without the complexity when entitlement management is hard coded into the SaaS application
- Reduce reliance on engineering resources to develop and maintain entitlement management functionality and enable a focus on core competencies and the delivery of new functionality and the reduction of support cases
- Provide deployment-agnostic access to applications with the same entitlement use rights giving customers the flexibility they demand
Building on Success for the Future
On-premise software suppliers achieving success with Revenera’s entitlement management solutions are well-positioned to transition to a SaaS strategy by leveraging their existing investment.
- Centralized entitlement management offers greater flexibility for customers and reduces friction in the transition from on-premise to SaaS solutions
- Insights into product usage and adoption inform pricing and packaging strategy and decisions
- Existing integrations with ERP, CRM, billing and analytics solutions provide proven processes to orchestrate the customer lifecycle
What Technology CFOs Should Know When Adopting SaaS and Subscription
Revenera’s Principal, Product Marketing, Michael Goff is joined by Flexera’s, Chief Financial Officer, David Zwick for insights into transitioning to SaaS and subscription models, and take away best practices and valuable lessons on this journey.
Plotting Your Course to SaaS: Technical Considerations for Product Packaging and Customer Entitlements
Join Revenera experts in this one hour webinar for part 2 of the Saas Monetization series. This time around the focus will be on technical considerations for product packaging and customer entitlements.