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I'm changing my product pricing strategy from license based to software as a service "SaaS". I sell it now for500$ one-time license how much should I sell it on monthly basis.
SAS product monthly subscription should be based on the LTV (life to value). The price will depend on the following factors:
- What is the Ageing of your customers right now: If they are byuing one time, how many months/ years are they using it?
- What is the yearly / monthly opex for your SaaS delivery?
- What is the cost of upgrading and retaining the subscribers?
If these data points are known, you may create a pricing model for your Product.
As actively being involved in this field, there have been different approach to determine the cost and strategies in charging it to the clients. SaaS product is vastly distinct from that of license based. Since SaaS is the cloud-based one, it has faster deployment, greater flexibility, clients facilitated with the most current version, access system anywhere, and within the subject the lower up-front cost. This last one is such that, the clients today are indeed inclined to the SaaS products, and they need cost effective products and not one time whole-sum payment. They know capital budgeting techniques, and they will prefer to perceive the value and worth of the product with the passage of time and with paces they get familiar to the product. That is why, these products are provided as free- trial for some days. Likewise, the SaaS are to be managed by the vendor for the life time for it's web-hosting and rented cloud space. These costs are subsequently charged termed as "Maintenance Contract" (frequency of time interval) or Annual Maintenance Contract (AMC- yearly). These cost are such that, they are variable and are apportioned to the life of the product they will use as per the contract and not all the cost are one-time payment right at the up-front. Taking these factors in mind, dear sir, you can refer this web managed by a friend of mine, where you will certainly benefit from: https://blog.kissmetrics.com/saasy-pricing-strategies/
Thank You!