Pricing as a Service: A New Trend to Watch in 2014
Wrapping up a calendar year is always exciting. We look back at the past year to analyze performance, and we look forward to what's in store in the coming year. This time of year, trend reports and analyses are published for technologies, markets, businesses, and domains.
As we wrap up 2013 and get ready for 2014, early views into such reports are all indicating a continued and stronger presence for cloud computing in the technology sector. Existing cloud providers are working on strengthening their offerings, newer start-ups and businesses on the cloud are entering the market, and end users are continuing to leverage the cloud in all manifestations available.
Despite predictions a few years back that anything and everything would become a service, cloud manifestations still largely focus on just three core areas: software as a service, infrastructure as a service, and platform as a service. But a recent report that focuses on the top cloud trends for 2014 talks about the increasing presence of a newer manifestation—pricing as a service (PraaS).
Product and service pricing is a complex area, and with the introduction of the cloud, subscription-based pricing models have become very popular. The need to determine the right pricing for the product, especially with value-add pricing mechanisms that end users expect, has forced organizations to bring in newer pricing strategies to succeed in the marketplace.
The success of a pricing strategy does not end with determining the varied pricing models. It continues into a post-product launch period as well, where organizations take on varied surveys and carefully refrain from a few tests to determine if their pricing strategies have been well received by the end users.
Though we already understand the complexity of pricing in the services market, pricing as a service will add a newer dimension to this whole mix. It will make room for pricing customizations for end users, bring in internal rigor operationally, and add agility in the world of cloud computing.
Today, pricing is more of an external-facing phenomenon. Through PraaS pricing will become more internal-facing and help bring more objectivity in a team’s operations—from a salesman’s remuneration on the seller’s side to more flexible and recurring budgets on the buyer’s side.
PraaS is still in its very nascent stages in the industry, but it is expected to be a differentiator in an organization’s services portfolio in the coming years. While we wait to see how this shapes up, it will greatly help if we start looking at our current pricing models to drive them not just externally, but internally, too. This will be our first baby step to move into the world of PraaS.