SaaS Business Model Examples & Features: What You Need To Know For Success

By: Swati Sharma Time: 10 Min Read Updated: June 15, 2023

What Is SaaS Business Model?

Software-as-a-Service (SaaS) is a cloud computing model that delivers software applications over the internet on a subscription basis. With SaaS as a business model, users access applications over any web browser or device without needing to install and maintain their own hardware and software environments – reducing complexity for businesses of all sizes. Companies looking to offer subscription-based services benefit from lower upfront investments since they pay only for what they use; this makes them attractive options compared with traditional licensed models, which require costly licensing fees upfront.

To successfully build an effective SaaS offering, companies should focus on four key areas of SaaS as a business model: pricing structure, customer onboarding processes, product development agility & scalability updates, and ongoing user support/maintenance services. Properly managing these components will ensure customers have positive experiences while using your product(s), which in turn leads to continued loyalty from those paying subscribers - driving long-term revenue growth potential for the business itself over time. Every company should understand how integral each component can play in achieving success within their specific target markets. Additionally, having comprehensive knowledge of new industry trends such as cloud computing helps inform decision-makers about best practices needed during implementation stages as well overall strategy mapping afterwards too!

In this SaaS as a business model blog, we will give SaaS business model examples along with SaaS as a business model features and Different SaaS business models. So without any further ado, let's begin.

What Are the Features of SaaS as a Business Model?

  • 1. Subscription-based pricing

    SaaS business model makes their software available to customers via monthly or yearly subscription plans.

  • 2. Cloud-based solutions

    SaaS services are provided via an internet connection, eliminating the need to store and manage software on-site.

  • 3. Scalability

    SaaS as a business model, offers flexibility to scale services up or down as needed, eliminating the need to invest in new hardware.

  • 4. Automatic updates

    SaaS businesses constantly update their services to ensure customers are using the latest version of the software.

  • 5. Customer service and support

    SaaS businesses provide technical support for clients using their services.

  • 6. Integration capabilities

    Many SaaS as business model providers offer integration options with other products and services to help businesses streamline processes.

  • 7. Data security

    SaaS businesses offer secure cloud storage of customer data, including access control mechanisms and built-in authentication, along with other safety measures.

  • 8. Analytics and reporting

    SaaS businesses enable customers to track their performance, providing useful insights for business decisions.

  • 9. Multi-tenancy architecture

    SaaS businesses provide access to multiple users from one system, creating a cost-effective solution for businesses of all sizes.

  • 10. Customization options

    SaaS businesses allow customers to configure the services to fit their specific needs, customizing features and user interfaces as desired.

What Are The Different SaaS Business Models?

  • 1. Freemium

    This model offers basic services for free and charges fees for advanced features or higher usage levels. It's designed to draw in customers, which can then be upgraded into paying contracts over time.

  • 2. Flat Pricing

    Customers pay one flat fee regardless of the number of users or features used on a platform with the SaaS business model, making it ideal for companies that require larger packages with low customization needs and predictable budgets.

  • 3. Usage-Based Pricing

    Platforms utilizing this pricing method bill based on how often—or how much—services are used by individual customers during specified billing cycles, such as minutes consumed per month or user queries processed annually by individual accounts/users subscribing to the SaaS as a business model offering.

  • 4. Tiered Pricing Model

    Companies using tiered models will offer multiple levels (tiers) of their product at different price points depending upon its feature set and size requirements needed to accommodate each customer type within those tiers who sign up / carry out transactions against them, allowing buyers flexibility while being cost-effective; usually accompanied through additional promotions albeit applicable only so long as they stay subscribed within any particular tier via reservations towards upgrades when necessary every now & again.

  • 5. Per User Licensing

    SaaS business model companies can also determine prices by charging per user/teammate who participates – it is beneficial when scalability is necessary and additional users boost their value from various integrations within the platform itself.

SaaS Business Model Examples


JioCinema as Freemium SaaS Business Model Examples

JioCinema has uniquely penetrated the Indian streaming market. By offering free high-quality Indian content, along with exclusive access to IPL 2023 – the world's second most valuable sports league worth over $10 billion, it was able to build trust and drive customer engagement quickly.

JioCinema then went one step further by launching its premium paid plan that gave viewers access to popular English content from HBO, Peacock, and more as soon as the cricket season ended. This bold move made them stand out among competitors like Disney+Hotstar — who saw an overall decrease of 4.6 million subscribers during quarter four of FY 23 due to their loss of rights for the same tournament — while building upon their already established userbase within India's burgeoning digital entertainment space.

Zoho Inventory - Tiered Pricing Model Example of SaaS Business Model

Zoho Inventory uses the tiered pricing model of SaaS as a business model, with different pricing plans, each tailored to meet the specific needs of the right type of business. The pricing plans are differentiated by the functionalities they provide, with higher-priced plans providing additional features. This particular model provides a wider array of options for potential customers, allowing them to select a plan that best suits their individual requirements. For example, Zoho Inventory offers a basic plan with free inventory management features. The standard plan includes additional features such as order management and warehouse management for $59 per month.

Microsoft Office 365 - Usage-Based Pricing SaaS Business Model Example

Microsoft 365 offers something revolutionary in the SaaS industry—a Usage-Based Pricing model. With this innovative system, customers are only charged for what they use. The flexibility of this option has made it highly desirable for businesses in various industries. It enables them to quickly adapt their plans to meet their evolving needs and budget.

For instance, companies that need basic applications can opt for the Business Basic plan, while those needing advanced security features and cyber threat protection can choose the Business Premium plan. In addition to being incredibly flexible and cost-effective, this methodology also encourages resource optimization since users are billed according to consumption.

Conclusion For SaaS As A Business Model

The SaaS as a business model has brought about a revolutionary change in how companies deliver their applications to users. Offering greater accessibility and flexibility than traditional software models, SaaS leverages the cloud's expansive infrastructure to ensure comprehensive reach. Additionally, the subscription-based pricing structure creates a mutually beneficial arrangement—additional savings for customers while maintaining predictable revenue streams for businesses. With digital transformation being an increasingly integral element of our current landscape, SaaS is emerging as an ideal solution for delivering the essential software services required by modern businesses.