What Is The Software As A Service Business Model, The Different Types Of Software As A Service Pricing Models, And The Problems With Companies Leveraging The Software As A Service Business Model

This essay sheds light on what is the software as a service business model, demystifies the different types of software as a service pricing models, and expounds upon the problems with companies leveraging the software as a service business model. Succinctly stated, the software as a service business model is a type of business model that involves a company furnishing its customers with access to its software programs on a subscription basis. The software as a service business model is the antithesis of a “one-time-cost, no-subscription model” in which a company develops software programs and sets forth non-subscription prices for their software programs. The “one-time-cost, no-subscription model” in which a company develops software programs and sets forth non-subscription prices for their software programs is eminently appealing to customers since it allows them to be able to purchase a perpetual license to access software programs without needing to incessantly acquiesce to paying a recurring subscription fee on a monthly basis to be able to maintain their access to the software programs. Paying a steep one-time payment to procure a perpetual license to access a software program bears a significantly lower cost for a customer to incur in the long haul than unremittingly paying a recurring subscription fee on a monthly basis for him to be able to maintain his access to a software program. In stark contrast to the “one-time-cost, no-subscription model”, the software as a service business model does not entails a company furnishing the members of its target market with the option to be able to purchase a perpetual license to access its software programs. Companies that leverage the software as a service business model only offer the members of their target market the option to purchase a temporary license to access their software programs. Once a customer purchases a temporary license to access a software program from a company that leverages the software as a service business model, he then will no longer have access to the software program once his subscription lapses. A temporary license to access a software program is devoid of long-term utility. This is because a temporary license to access a software program is no longer able to offer utility to the customer once its expiration date has elapsed.