XaaS Value Propositions
Designing for Renewability
In XaaS business models, almost all of the revenue acquired in the first sales is recurring revenue and, therefore, is at risk at the time of renewal. This lies in contrast to the revenue renewal risk for traditional on-premise models.
For many years, technology companies have been shifting from products built for on-premise deployment and acquired through capital acquisition, to XaaS products built for cloud consumption purchased as subscriptions or paid for as consumed. This industry shift is having dramatic impact on how solutions are designed and packaged, how value propositions are articulated to customers, and how customers engage in realizing that value proposition. It is this actual realization of the value proposition that is the strongest indicator of the customers’ likelihood of renewal when that time comes around.
TSIA researched the relationship between the product and offer attributes and those of a successful renewal process, and impactful practices were identified that positively influence the rate of renewal.
This paper provides a detailed review of the value proposition attributes contributing to strong renewal results.
Laura M Fay
Vice President and Managing Director, Offers Research and Advisory, TSIA
Vice President, Service Revenue Generation Research, TSIA
Publish Date: August 12, 2020
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