Sixteen Ventures web site has a presentation titled SaaS Revenue Modeling: Details of the 7 Revenue Streams. The authors classify revenue streams into two:
Scalable Revenue Streams
These revenue streams can scale significantly with the growth of the SaaS venture. Four such streams are identified:
- Recurring: This type of revenue comes from site subscriptions.
- Ecosystem: The SaaS vendor realizes revenue by providing APIs to other players providing complementary offerings
- Ancillary: Revenue coming for ancillary fees such as setup fee
- Network: Anonymized and aggregated data from SaaS users is provided to those who will pay for it. This leverages the multi-tenancy of SaaS ventures.
Non-Scalable Revenue Streams
These are useful revenue streams but harder and sometimes impossible to scale. Three such streams are identified:
- Products: Units that are shipped to users of SaaS - these could be devices and gadgets of sorts
- Services: Setup, configuration, content development, software development, training
- Advertising: Monetizes site by displaying advertisements alongside SaaS user interface
The presentation can be found on Sixteen Ventures site.
There might be other fees such as Platform fees - companies like Salesforce.com charge other vendors for developing and using their platform to build applications on top. Of course, not every SaaS company can do this - However companies that could do this will act as a hub for selling other products - examples are NetSuite, WebEx
ReplyDeletePlatform fees -yes, when a SaaS company positions explicitly as a PaaS (platform as a service)vendor. This is the case with Salesforce, where their CRM and other SaaS offerings are augmented by the Force.com PaaS offering. I would imagine this to be a highly scalable revenue stream as well.
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