According to IDC, the Software-as-a-Service (SaaS) market (also known as on-demand or cloud-based services) is poised to jump from $13.1 billion in global revenue in 2009 to $40.5 billion by 2014, a compound annual growth rate of 25.3 percent. The SaaS model has become mainstream leading more of the software industry to adopt subscription-based licensing models.
But this new way of doing business is not without its challenges. Leading edge companies are developing and adopting innovative strategies to stay ahead.
|Many SaaS providers have a "one size fits all" packaging which results in missed revenues. SaaS business models need to change on a dime to address a rapidly evolving market.||Package and price offerings to match what customers want to buy without involving engineering|
|SaaS providers are losing 40-60% of potential revenues to credential sharing abuse||Protect on-demand service against revenue leakage to credential sharing|
|SaaS providers have a "one size fits all" approach to licensing, blocking out potential customers and revenue||License service according to how customers want to pay for access|
While many early stage SaaS providers focus on broad market adoption, as their market matures, SaaS revenue growth slows and these business challenges become more acute. The very nature of SaaS offerings means that you have near immediate global reach, opening up a diverse variety of needs and potential abuse that must be confronted early and directly in order to achieve the desired revenue growth and market penetration.
Licensing and Subscription Management to Grow SaaS Revenues
SaaS providers must adopt licensing and SaaS subscription management software and solutions to realize their SaaS revenue growth objectives.
The right licensing solutions will:
- Augment user credentials with machine identities to formulate usage policies
- Enforce license models such as concurrent use models
The right entitlement and SaaS subscription management software solution will:
- Define service bundles based on features
- Create entitlements for service bundles
- Define license models (e.g. concurrent use, annual/expiring, trials, etc.)
- Define usage policies (e.g., one user can access the service from up to five machines)
- Provision SaaS users based on subscription entitlements
- Automate subscription management, up- and cross-sells
- Automate trial-to-paid conversion
- Provide customer insights on entitlements, usage and products
Flexera Software's FlexNet Producer Suite for Software Vendors, a proven solution used by thousands of customers, provides both the licensing and back-office entitlement and subscription management capabilities SaaS providers need to successfully create and deploy high revenue growth SaaS solutions.