Quick Tips: Do you own more or less of SaaS Application you pay for?

Have you ever realized, how much do you really pay for a SaaS Application? The general answer would be to look into your invoice and find the number. But, have you realized that the quantity of Technical Services you own or paying for may not be optimally utilized in your organization. There are SaaS where your invoice is specifically calculated based on your usage, but not all SaaS is based on that pricing model. I would even say that only selected few calculate invoice at granular level of details. e.g. AWS. I have got bills ranging from low as $0.57 cents to $50+ based on usage. But, most of the B2B SaaS applications are contractually bound for few number of years with a bucketed types of services. Generally, in many situation, no one goes back and checks whether those services are being utilized or not. Also, it will rarely happen that you own less and your usage is more.

If you see the contractual document, you might find following, but not limited to, criteria based on which you get your invoice.

1. Amount of storage
2. Number of requests/response
3. Number of API called
4. Number of current user or number of user account
5. Number of other types of Technical Service provided
6. Timeline or duration of the current service
7. ingress/egress
8. Compute Resources used

All of the above characteristics also falls under the domain of non-functional requirement. It is always good idea to keep track above characteristics for all production environment. Traditionally many of these are tracked through monitoring services, but only for fallout scenarios. In other words, monitoring services never trigger any alarm or sends out a usage pattern.

You could save little more money on doing proper analysis of your Cloud environment. It would not be as easy compared to On-Premise Software, but nothing like, you can't do that. The above criteria can provide a starting point to collect the data and re-negotiate the deal. This also gives an opportunity to study your Application Portfolio.

In general for On-Premise Software license is based on number of users (limited or unlimited). Counting the usage pattern is difficult but not as difficult in SaaS Application, where number of users is just one factor of licensing.

Of course there are other types of complex licensing especially in Mainframe or other complex technology area, which is beyond scope of this discussion.