Making a move to a SaaS Usage-Based Model

Saas based usage model

Moving from on-premise to SaaS is becoming a necessity today. It is clear that software development is the field of tomorrow. However, subscriptions are taking over current on-premise software like wildfire. People prefer SaaS usage-based models as compared to the traditional alternatives. 

SaaS based model

What is SaaS? 

SaaS, short for software-as-a-service, is a distribution model in the software development world where companies host their applications on the cloud. And hence, made available to the people over the internet. Usually, a company buys a cloud subscription from a third-party vendor to host its application and software solutions. Then, the customers can access them remotely as well. 

Growth trend 

Over the last few years, SaaS-based platforms have been increasing exponentially. According to a McKinsey & Company report, they expect the market for SaaS to reach a whopping $200 billion by 2024. As subscriptions become common, on-premise activities like license renewal are projected to go down. In fact, according to IDC, software subscription revenues are to grow by 16.6% by 2024. On the other hand, on-premise license revenues are predicted to shrink by 6.1%. 

As evident from the above statistics, SaaS-based user models are the future. However, making the shift is not easy. From sales to operations and marketing, the shift will affect every aspect and department of your business. Therefore, it is crucial that all your employees and business processes work together to make the switch more seamless and time-efficient. 

Following are some things you should prioritize while shifting to a SaaS usage-based model from an on-premise one: 

Proper pricing and marketing strategies 

Generally, many companies do not have any idea about strategies and techniques they should implement while switching from an on-premise to a SaaS model. Therefore, the shift may be more difficult than anticipated. It is essential to have your policies, particularly money-related, be well thought out. Hence, reducing the risks of losses and failures during the transition. 

In addition, a portion of your clients might be content with the manner in which they use your services. That is, they might prefer on-premise models as compared to the internet-based alternatives. Therefore, you should have some incentives in mind to get them on board with the shift. These incentives might include lower costs, better support, and faster access. 

It is also important that you are capable of differentiating between product-based and value-based pricing. That is, you should carefully analyze which technique can be beneficial in different settings. Hence, helping you apply your strategies in a way that can prove the most profitable. You should particularly look into your customer behavior to better understand the market dynamics. 

Revamping the sales organization 

While making the shift, you also need to ensure that your salesforce and third-party vendors are equipped with the resources to feed to the new infrastructure. Enterprises should think of ways to incentivize their employees for better adaptability. Further, it would help if you also considered arranging training sessions for people to get accustomed to the new SaaS-based model. 

You should also try to move away from the “sell things” mentality to prioritize long-term relationships instead. Investing in a customer success department can be a good idea. It can help in analyzing and following customers through their transition. Hence, also allowing you to improve the experience for them. 

Changing the operational strategies 

You need to ensure your company is ready to make a shift to the SaaS model. Sometimes, embarking on the journey unprepared can have dire consequences for the company and its future. Therefore, it is critical to be prepared before making the change. You should have an integrated system set up that is capable of supporting all your services and offerings. Your platform should be able to handle everything from customer care and billing to sales and revenue. 

Further, your operational strategies should also feed to your third-party vendors and partners. Your shift will also impact them. Therefore, it is important to have them on board with your strategies as well. Failing to feed to these implications can lead to serious issues in the future. Further, you should also look out for blind spots. Well-developed solutions can feed to all edge cases, ensuring a smooth and seamless transition for every party involved. 


SaaS-based usage models are gaining popularity with every passing day. As the world shifts online, people prefer doing chores from the comfort of their homes rather than physically going somewhere. Subscriptions are eating up software. They make licensing easy and hassle-free. Hence, making the shift is becoming an unavoidable necessity. Whether it is now or later, you will eventually have to make the shift. 

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