It's not that unusual actually. Think of all the Saas apps that charge you by tier based on some arbitrary limits.
Sure, in those cases you consume more resources, but those are probably negligible compared to the increase in price. The reality is that they charge you more because you make more money from the service, hence you are willing to pay.
It's not precisely the same, obviously. For one, you can chose the services you want, while you must go through Apple's App Store. And since they don't charge a percentage of revenue but charge for resources, you don't see the correlation.
But the final effect is the same. The more money you make, the more you pay.
No, in most SaaS environments bigger customers are more expensive to maintain. They are harder to shard or migrate when you need to keep their data accessible, linked, etc... That's why there are limits in the first place and the don't really have to be arbitrary.
I don’t know about most. Value based pricing is common concept in SaaS and it explicitly doesn’t price based on the cost of delivering the service.
That said, a lot of higher tier offerings in SaaS differentiate themselves by SLAs, Support, assigned CSM, consulting time, etc. Those are cheap-iah to deliver when everything goes well but can cost a lot when there are problems.
Comments
It's not that unusual actually. Think of all the Saas apps that charge you by tier based on some arbitrary limits.
Sure, in those cases you consume more resources, but those are probably negligible compared to the increase in price. The reality is that they charge you more because you make more money from the service, hence you are willing to pay.
It's not precisely the same, obviously. For one, you can chose the services you want, while you must go through Apple's App Store. And since they don't charge a percentage of revenue but charge for resources, you don't see the correlation.
But the final effect is the same. The more money you make, the more you pay.
No, in most SaaS environments bigger customers are more expensive to maintain. They are harder to shard or migrate when you need to keep their data accessible, linked, etc... That's why there are limits in the first place and the don't really have to be arbitrary.
I don’t know about most. Value based pricing is common concept in SaaS and it explicitly doesn’t price based on the cost of delivering the service.
That said, a lot of higher tier offerings in SaaS differentiate themselves by SLAs, Support, assigned CSM, consulting time, etc. Those are cheap-iah to deliver when everything goes well but can cost a lot when there are problems.