Customized pricing strategy for software-as-a-service

Pricing process is significant for the development of SaaS industry, which has not largely researched yet. Aiming at exploring a ripe pricing strategy system for SaaS, we mainly consider cost, the choice of pricing model, and customization as the key elements influencing the price, especially customization (on-demand service). To help decision makers set a sensible pricing strategy, we build our Optimal Pricing Model on providers´ profit and market analysis. After that, we illustrate the effect of the uncertainty of customization of SaaS on the strategy. Then, we propose to calculate the optimal scale of customization. It presents that, with different quality levels of customization, the prices react variably to the expansion of the customization´s scale. It also suggests an optimal customization scale for providers supplying both standardized and customized services.