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When buying bandwidth from a CDN (like Akamai) it's common to negotiate a price that's in the approximate range for a base-level commitment with negotiated burst/overage charges. There are additionally several contract terms that can be added - such as "no penalty to increase commit level during the term" and "annual average and true-up" - that can smooth the costs for variable-usage businesses.

SaaS ERP and CRM products at first glance might seem to have stable usage over the contract (you don't have wild shifts in your sales or accounting staff in normal times), but even these core systems are used by roles that tend to have more episodic project-based work. Marketing, for example, doesn't run and monitor campaigns every day and have all their staff on board. Campaigns are often discrete events timed for a product launch or major tradeshow. You might need many more (contractor) seats for 2-3 months, then 2-3 months of limited use, then another burst of work.

In general, any time there is a role that is episodic like this (where customers are tempted to share a single login and cycle it through multiple people) you have an opportunity to embed the product deeper via license terms that allow the customer to give every project employee a seat for that part of the year they're needed.

Why? When everyone can be expected to use the SaaS product and has his/her own account, then the customer will start to see it as part of the "load factor" (like payroll taxes and benefits and overhead) for all employees. When the SaaS product is just there (like air) the customer can bake it into their stqndard operating processes and employees will tend to use it more.

Of course, SaaS vendors have to figure out their internal and VAR commission models so "overage" and "mid-contract commit level upgrades" are shared between their hunters and farmers.

I think this is the real reason SaaS companies tend to oversell blocks of licenses - to continue using traditional commission plans that the sales force understands!
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