The topic of paying per user for a billing or management platforms comes up every so often. I was able to sit down and talk with several vendors at WISPAPALOOZA this year about the value of their customers paying a per-user fee.
The most prevalent thought is about innovation and new features. SaaS allows the billing vendor to invest development and testing time in rolling out new features to support new equipment, and other software. LTE platforms are the hot thing in billing integration. New additions to software take people power and hours of testing and tweaking. Without monthly recurring revenue to drive such things billing vendors would have to develop this and then charge to the early adopters as an add-on. This can be a double-edged sword. The early adopters have to pay a premium in order to get a partial solution because the vendor has to really prioritize how their development resources are used. The Vendor is always chasing the next big thing, which means other additions or fixes tend to get pushed back. They have to finish add-ons they think more folks will want to buy first.
The next thing is plain old hosting. Hosting a software application, whether in the cloud or on your own hardware costs money. Co-location, software patches on the OS, hardware lifecycles, etc. This cuts down on the end-user maintenance side of the hardware but pushes it back to the vendor. The peace of mind of knowing the thing that collects your money is running is backed up, and is available as part of the monthly fee you pay.
SaaS also allows for quicker releases of bugs and new features. Vendors have more resources dedicated to development and changes. This allows for new add-ons to become available quicker. Take the traditional model where you get bug fixes, but major feature add-ons are either a full point upgrade or major version upgrade. This usually costs money and is a slower process. Not only does the vendor have to spend resources advertising, but they have to deal with support and other issues. With billing vendors who charge a monthly fee fixes from companies such as Paypal or Authorize.net are almost always rolled out very quickly at no additional charge to the end user ISP.
Some companies such as Basecamp, which is not a billing platform, have taken a hybrid approach to SaaS. Every major revision that comes out is an upgrade. You can choose to upgrade or stay where you are and pay the same amount. This can leave customers behind but still allows them to use what they are paying for. They just don’t get new features or bug fixes.
So the next time you are figuring out why you should pay for a billing platform on a monthly, customer, or subscription basis take all of this into account.
For those looking for xISP billing, and mainly WISP billing, here is a partial list:
If you have more please add them in the comments.