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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3 thoughts on Regressive Complexity in SaaS Pricing

  1. This is what happens when companies like Salesforce start hiring hundreds of employees from the ‘traditonal’ software companies- the people bring the DNA with them. And start looking to apply old tricks to the new game. This bodes well for the ‘traditional’ vendors as they can co-opt, acquire and integrate over time.

  2. Jeff,

    the school of mess-up-with-your-competitors by nailing-your-clients-to-a-board first developed “monopolies”.
    Then when that got sorted by the governments “oligopolies” was the thing until the governments again got the whiff of it.
    Now, thanks to Dilbert (and Scott Adams of course) for coining the term, we see the “confusopolies”!
    After calculating and sweating for two weeks to compare phone company or insurance offers I find they changed the offer, duh, so I give up, nailed to the board as it is.

    Heh, so now the SaaS chaps are catching up… OK, let’s agree to keep our respective paths clean, simple it’ll stay!

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