Do you have any insights into pricing models for SaaS products?

In our business, most of our larger customers have not wanted to deal with the complexity and variable nature of the “pay as you go” / “pay only for what you use” model typical of SaaS products. So far, we have always been required to provide proposals with fixed-cost, multi-year agreements, followed by an MSA or SOW process.

Also, the customer ROI is highly variable because of the nature of our business. In some cases, the ROI is huge because the lack of our solution has resulted in quantifiable penalties that our prospects have had to pay. (Those are the easier sales.) In other cases, the prospect knows that a penalty is possible, but is unwilling to spend money to protect against the possibility.

I’d love to discuss ideas with you one day if you are ever in San Diego.

– Lu

I think It’s worth to differentiate a traditional Software adapted to the Online Service model, against a Web 2.0 business.

For example, about Xignite, you provide Web Services about market data, a new business enabled by Internet. So there’s no software provided as a service. Also, It was not possible to have a Web Service without Internet.

So a “pure” SaaS is related to the existence of offline software in the same subject.

In the your e-book terms, you have the broad SaaS definition, as all provided online. At the end, as all business are going to be enabled online, all business are going to be SaaS.