We’ve previously explored the foundational concept of User-Based SaaS pricing – the more individual users you have accessing the platform, the more you pay. It’s a straightforward model, but its real-world application is diverse. Today, let’s pull back the curtain and look at some well-known companies that have embraced this “pay-per-head” approach.
Think about the software you and your team use daily. Chances are, several of them fall into the user-based category. Here are a few prominent examples:
- Adobe Creative Cloud: For creative professionals, access to industry-standard tools like Photoshop, Illustrator, and Premiere Pro often comes down to a per-user subscription. Each designer, video editor, or marketer on the team typically needs their own license.
- Atlassian (Jira, Confluence, Trello): Teams relying on project management and collaboration tools like Jira, Confluence for documentation, or even Trello (in its business tiers) usually operate on a per-user pricing structure. As your team grows, so does your Atlassian bill.
- JetBrains (IntelliJ IDEA, PyCharm): Developers widely use JetBrains’ suite of Integrated Development Environments (IDEs). These are typically licensed on a per-developer basis, acknowledging that each coder needs their own dedicated workspace.
- Microsoft Office 365: This ubiquitous suite of productivity tools, including Word, Excel, PowerPoint, and Outlook, is a prime example of user-based pricing. Businesses pay a subscription fee for each employee who needs access to these applications.
- Salesforce: As a leading Customer Relationship Management (CRM) platform, Salesforce’s pricing is heavily user-based. Different tiers offer varying features, but the core cost is often determined by the number of sales representatives, marketers, or support agents who will be using the system.
- ServiceNow: For IT service management and workflow automation, ServiceNow also employs a user-based model. The cost scales with the number of IT professionals or other employees utilizing the platform for incident management, service requests, and more.
- Slack: This popular communication and collaboration platform charges based on the number of active members within a workspace. As your team communication needs grow, so does your Slack subscription cost.
Why User-Based Works (for Them):
For these companies, the user-based model often aligns well with their core value proposition: providing individual access and capabilities to specific users within an organization. It offers a relatively predictable revenue stream based on the size of their customer’s teams.
The User Perspective: Considerations:
As a consumer of these services, understanding the user-based model is crucial for budgeting and cost management. Key considerations include:
- Active vs. Inactive Users: Regularly auditing user accounts to identify and remove inactive licenses can lead to significant cost savings.
- Role-Based Access: Carefully consider which team members truly need access and at what level. Sometimes, not every employee requires a full license.
- Scalability Costs: Be mindful of how your software expenses will scale as your team grows. Factor in potential new hires when forecasting budgets.
The prevalence of user-based pricing highlights its simplicity and direct correlation to team size. While it can be straightforward to understand, effective management and regular audits are essential to avoid unnecessary costs associated with unused licenses. Keep this in mind as you navigate the SaaS landscape!
