Pricing Strategies for E-Sourcing SaaS

There has been a recent, quick growth in the market for e-sourcing and e- procurement Software-as-a-Service (SaaS). However, the software products are not yet commoditized which opens up for different ways of pricing the services. This prompts us to ask the questions: how does technological development within an industry affect the price and what are the aspects of pricing that makes it sustainable and competitive for the future? To find out, an extensive literature study was conducted together with interviews, both with the case company Trade Extensions, as well as SaaS consumers, other SaaS vendors and experts in the field. SaaS consumers did regard security as important but they were confident that the tools they used were secure. We found that competitive and sustainable price models are flexible, have lock-in effects, produce predictable revenues and costs, are easy to communicate and invite to first-time usage. While trying to achieve this, a software provider also should take into account whether they are a price maker or price taker, and also allow their price model to change with customer needs and technology. Upcoming technologies that are likely to have an impact on the SaaS industry are artificial intelligence, Internet of things, cognitive and mobile analytics. When choosing price models companies should be aware of what aspects of price that are important to their customers. They must evolve their price model with the technology and be ever vigilant to upcoming security issues and growing technological trends. There might be reasons to create more flexibility for customers by providing options for type of price model or different versions of their product.