Published: 07 August 2024
Various pricing models purport to be consumption-based, but not all offer the flexibility buyers demand. Sourcing, procurement and vendor management leaders can use this research to evaluate consumption-based pricing options and the associated risks when looking to optimize SaaS costs.
Most large SaaS vendors require multiyear commitments and offer little downward flexibilitymidcontract when demand declines, despite many different pricing and contractual models in the wider market.
Pay-as-you-go (PAYG) models are common in public cloud IaaS and PaaS offerings, which is forcing SaaS vendors to respond to growing customer demand for similar pricing flexibility in SaaS models. However, PAYG models are not prevalent in SaaS vendor offerings and are more difficult to achieve if not offered programmatically.
Consumption-based pricingoffers greater flexibility, which is useful for certain use cases, such as seasonality or peak usage. However, certain models, such as PAYG, will
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