I agree with your assessment Phil. Using a "gas tank" licensing model where you buy more on an as-needed basis is a key innovation.
More broadly, the issue is most SaaS vendors think in terms of the pricing details (price levels and discounts) and ignore the other elements of pricing.
While these two elements of the pricing "mix" are important, the structural elements are far more important -- metric (what you charge for), packaging (how product is "chunked" up) and licensing (payment stream and rights to use).
RightNow is a great example of how tweaking the payment stream and packaging will likely increase sales and maintain margin. The frequently-used alternative (tweaking price levels) may also increase sales but will decrease margin.
I suspect all sorts of good things will happen to these guys -- and they deserve it.
Jim Geisman
Discussion on:
Message 4 of 1
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