Pay-Per-Use Software (SaaS)

Software pay per use is one of the contemporary trends to enter the market with the advent of cloud computing & SaaS (Software as a Service). The concept of cloud network implies the offerings of a range of services by a third-party provider using the internet. The services offered includes SaaS, wherein the virtual server provides the usage of the software through the cloud. Combining these two notions results in the offering of pay per use SaaS (Software as a Service), which essentially entails paying a small subscription fee on per usage basis every time the software is being used.

Introduction of Software Pay Per Use

The idea has emerged to counter the rampant software piracy, while capturing the marginal and heterogeneous users who have been often found to use pirated software, as the acquisition costs for perpetual usage are too high. Software piracy has always been a concern for developers as it leads to revenue leakage through unauthorized product usage. For the average users, the pirated versions are often problematic and counterproductive to their work. However, the marginal usage does not justify the huge capital investment of perpetual license, thereby leading to software piracy.

Benefits of SaaS Pay Per Use for Enterprises

The Pay Per Use SaaS model is primarily dependent upon certain market conditions, like higher potential for piracy, lower inconvenience costs, majority of marginal users, and strong cloud network presence. Whereas perpetual licensing is important for heavy users, a market having the above-mentioned conditions will always benefit the SaaS pay per use model. So while the developer finds advantages of increased authorized user network, lower costs of marketing, enhanced customer reliability, and lesser impact of piracy; the rewards for users are even greater as they get to use the licensed full & updated versions for a small fee, even for minor everyday usage without incurring the huge expenditure on acquisition.

The higher profit yields to the vendor is amply supported by the welfare-enhancement capacity, thereby leading to increased economic productivity. Everything put together, software pay per use model is a likely winner for all concerned provided the basic infrastructure for a strong network is in place.

You May Also Like: Driving Revenue and Savings by Turning Apps into SaaS