Regressive Complexity in SaaS Pricing

Props to Jason for coining a very cool new term – regressive complexity. He is absolutely correct, SaaS pricing is getting too complex which means the title of his post could easily have been “the more things change, the more they stay the same”. SaaS’ early popularity was a function of 1) it’s dramatically lower barrier to entry, and 2) pricing simplification. That’s right, you pay for 5 users and that’s what you got, 5 user ids, but lately it seems that SaaS vendors have grown nostalgic for the days when there was the price you thought you were paying and then what you were actually on the hook when all the extras are added in.

This pricing issue is going to get a lot more uncomfortable for users when they start getting 18 different bills for the variety of services they subscribe to. It would be analogous to cell phones where when I signed up for my Blackberry service I got one bill from T-Mobile and a completely different one from Blackberry even though T-Mobile carries my service. Billing aggregation is a great opportunity for some enterprising young startup to pursue… oh wait a minute… never mind.

What’s Wrong with SaaS?:
Today, that SaaS pricing model is under threat of regressive complexity (I’m coining a new term). Here are two recent examples of that pricing complexity (the respective vendor names have been concealed to protect the innocent).

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OpenID, Get it from Yahoo! & Avoid Phishing

This is some cool news on OpenID, the open source identity technology. I first became aware of this through Zooomr and thought it was a very consumer friendly approach to identity management that got beyond the dreaded “what is my username again?” moment we often have.

There are many password vault solutions on the market today and Sxipper is at least as good as the better of them but the fact that it supports OpenID makes it a little better IMO. These are exactly the kinds of solutions that are making the consumer side of the internet more interesting than the enterprise, which still relies on complicated key mechanisms and certificates. BTW, Sxipper’s first time use wizard is a great example of good usability designed in from the beginning.

O’Reilly Radar > OpenID, Get it from Yahoo! & Avoid Phishing:

OpenID, the lightweight, decentralized identity system (Radar post) had an interesting weekend. There is now a method for using your Yahoo ID with OpenID (unofficial, but sanctioned) and there are new measures designed to reduce the risk of phishing.

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