The subscription economy has arrived and is here to stay. One of the key components of a subscription pricing model is the ability to charge against usage or essentially a pay as you go model. In the last couple of years, there has been a clear rise in the roll out of consumption based pricing models among ISV’s and SaaS providers. However, the interesting emerging trend is the adoption by OEMs, medical devices and classical hardware manufacturers who want to monetize on the software to gain a competitive advantage.
As software vendors move to software as a service, how are they handling the challenge of adapting their pricing strategies? Recently, IDC’s Amy Konary sat down with TMC’s Erin Harrison, Executive Editor, Cloud Computing, to talk about the evolving pricing model in the software monetization market.
According to Konary, software monetization in the cloud naturally lends itself usage-based subscription models and increased transparency for tracking. Automated tracking of entitlements and license usage down to the feature level has become expected, and cloud application developers need to carefully consider how they plan to integrate tracking and reporting into their solutions.