Revenue Models and Pricing Strategies in the B2B SaaS Market
A revenue model describes the revenue flow in a business and the firm’s underlying framework for generating sales. Customers in the Business-Business (B2B) Software as a Service (SaaS) relationship subscribe to a specific level of service, normally for a defined period of time wherein the ‘per user’ fee paid will typically be a fraction of the traditional perpetual per user licence fee. This chapter details various commercial service market revenue models and the means through which alternative SaaS pricing strategies can be applied in a B2B setting. The chapter goes on to detail total cost of ownership before presenting a means through which SaaS providers can move from strategy to price in this market.
- Adelstrand, C., & Brostedt, E. (2016). Creating competitive advantage by rethinking B2B software pricing (Master of Science Thesis). Industrial Engineering and Management, Sweden.Google Scholar
- Baur, A., Genova, A., Buhler, J., & Bick, M. (2014). Customer is king? A framework to shift from cost-to value-based pricing in software as a service: The case of business intelligence software. In Digital services and information intelligence, Sanya (AICT, Vol. 445, pp. 1–13).Google Scholar
- Bertini, M., & Gourville, J. (2012). Pricing to create shared value. Harvard Business Review, 90(6), 96–104.Google Scholar
- Bozkurt, M. (2016). The price is right? Evaluating revenue models for software component in identity and access management (Master of Science in Business Administration, unpublished dissertation). University of Twente, the Netherlands.Google Scholar
- Brumec, S., & Vrcek, N. (2013). Cost effectiveness of commercial computing Clouds. Information Systems, 38, 495–508.Google Scholar
- Buttell, A. E. (2009). Scenario planning for your business. Journal of Financial Planning, (Nov/Dec), 10–11.Google Scholar
- Buxmann, P., & Lehmann, S. (2009, December). Pricing strategies of software vendors. Business and Information Systems Engineering, 1, 452–462.Google Scholar
- Clohessy, T., Acton, T., Morgan, L., & Conboy, K. (2016). The times they are a-changin for ICT service provision: A Cloud Computing business model perspective. 24th European Conference on Information Systems (ECIS), research paper, Istanbul.Google Scholar
- Diachenko, B. (2017, May 16). Another BIG reason to change your passwords immediately! MacKeeper Security Research Centre [Internet]. Available at: https://mackeepersecurity.com/post/mother-of-all-leaks. Accessed June 2017.
- Dubey, A., & Wagle, D. (2007, May). Delivering software as a service. The McKinsey Quarterly, Web exclusive, 1–24.Google Scholar
- Duhon, B. (2007). Software as a service: Why buy when you can rent? AIIM E-doc, 21(5), 10.Google Scholar
- Ehrenberg, D. (2013). 7 steps to developing your revenue model [Internet]. Available at: https://www.accelo.com/resources/blog/7-steps-to-developing-your-revenue-model/. Accessed Apr 2017.
- Fowley, F., & Pahl, C. (2016). Cloud migration architecture and pricing – Mapping a licensing business model for software vendors to a SaaS business model. European Conference on Service-Oriented and Cloud Computing ESOCC – CloudWays’ 2016 Workshop.Google Scholar
- Grant, E. (2004). Defining a revenue model for your business. Business.com [Internet]. Available at: https://www.business.com/articles/defining-a-revenue-model-for-your-business/. Accessed May 2017.
- Harmon, R., Demirkan, H., Hefley, B., & Auseklis, N. (2009). Pricing strategies for information technology services: A value-based approach. Proceedings of the 42nd Hawaii International Conference on System Sciences, USA.Google Scholar
- Hinterhuber, A., & Liozu, S. (2012). Is it time to rethink your pricing strategy? MIT Sloan Review, 53(4), 69.Google Scholar
- Hunt, P., & Saunders, J. (2013). World class pricing. Indianapolis: Universe Inc..Google Scholar
- Kittlaus, H. B., & Clough, P. N. (2008). Software product management and pricing: Key success factors for software organizations. Berlin: Springer Science & Business Media.Google Scholar
- Laniado, E. (2013). Revenue model types: The quick guide [Internet]. Available at: http://www.bmnow.com/revenue-models-quick-guide/. Accessed May 2017.
- Lewin, K. (1951). Field theory in social science. New York: Harper & Brothers.Google Scholar
- Luoma, E., Ronkko, M., & Tyrvainen, P. (2012). Current Software-as-a-Service Business Models: Evidence from Finland. In M. A. Cusumano, B. Iyer, & N. Venkatraman (Eds.), International Conference of Software Business (ICSOB 2012), (Lecture Notes in Business Information Processing (LNBIP), Vol. 114, pp. 181–194). Berlin/Heidelberg: Springer.Google Scholar
- Mohr, J., Sengupta, S., & Slater, S. (2010). Marketing of high-technology products and innovations. New Jersey: Prentice Hall.Google Scholar
- Motley, R. (2004, March). How fast software becomes shelfware. American Shipper: International Trade and Logistics, (March), 1–3.Google Scholar
- Murphy, L. (2011). Reality of freemium in SaaS. Sixteen ventures [Internet]. Available at: http://pdf.edocr.com/d0406d707a354e842138dfa0383141331 b8edb3e.pdf. Accessed Sept 2016.
- Niculescu, M. F., & Wu, D. J. (2011). When should software firms commercialize new products via freemium business models. [Internet] Available at: https://www.misrc.umn.edu/workshops/2011/fall/MariusFlorinNiculescu_2.pdf. Accessed Sep 2016.
- Osterwalder, A. (2004). The business model ontology: A proposition in a design science approach (Unpublished thesis). Universite de Lausanne.Google Scholar
- Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. New Jersey: Wiley.Google Scholar
- Priem, R. L. (2007). A consumer perspective on value creation. Academy of Management, 32(1), 219–235.Google Scholar
- Riehle, D. (2009). The commercial open source business model. Value creation in e-business management (pp. 18–30). Berlin/Heidelberg: Springer.Google Scholar
- Schoemaker, P. J. H. (1995). Scenario planning: A tool for strategic thinking. Sloan Management Review, 36(2), 25–40.Google Scholar
- Schwartz, P. (1996). The Art of the long view: Planning for the future in an uncertain world. New York: Currency Doubleday.Google Scholar
- Wilson, F. (2006). The freemium business model. A VC Blog, March 23.Google Scholar