Pay-as-You-Click vs Pay Per User. Which Software Model is Better for Your Business?

Every business owner is painfully aware of how much their mission-critical software costs them. Yet, one metric that eludes many managers and CIOs alike is just how much value they’re getting from their software. Thanks to the cloud, assigning value to software and making decisions about enterprise technology accordingly, is easier than ever before!

How It’s Always Been
In the past, understanding the true value of software has been difficult, due to the fact that business owners generally look at one thing: the number of users. For example, an organization with 50 employees may purchase 50 Microsoft Office licenses so that each employee can have a workstation equipped with a productivity suite. This traditional approach to purchasing software has served Microsoft well over the years, as well as provided office managers with a convenient way to cover all of their digital bases. However, regarding this approach, one question that certainly looms over the heads of every budget-minded business owner is this, “How much software am I paying for that’s being underutilized, or not even used at all?”

It’s a fair question. After all, take a look at your own office productivity suite. Chances are, you’ve got at least a couple applications that you use heavily, along with a couple more that you only use occasionally. It’s also quite probable that you’ve got at least a few applications that you never use. Like, not even opened once. Yet, you paid good money for access to these apps. How is this a good business model? It’s not. At least for you, anyway.

The Alternative
What if, instead of paying for software based on the number of users in your company who might use it, you pay only for software that’s actually used? A concept like this has the potential to change the paradigm of how software is sold by developers and utilized by businesses, and thanks to cloud computing, this could very well become the norm.

ITProPortal predicts how 2017 looks to be the year where such a transition will take place: “In 2017, the amount companies are willing to pay for software will be determined by levels of engagement rather than number of users. Cloud and mobile apps provide unprecedented visibility into these usage patterns, allowing companies to see more clearly how much value they get for their software. Smart companies are waking up to the reality that they should only pay for what provides demonstrable value. Slack has been on the cutting edge of this trend, and in 2017 other application providers will follow suit.”

This makes sense. After all, when a cloud provider hosts an application, they get a detailed window into how the software is being used. This includes data ranging from how often the application is opened, how long a session lasts, and, if tracking this metric is desired, a cloud provider could even track every click within the application they host.

If this is the case, then why not charge accordingly? With enterprise technology being such a highly competitive industry, it likely won’t take long before such a pay-as-you-click model becomes an option for your company’s next software purchase.

This is just one of the fascinating ways of how the cloud is improving operations for businesses of all shapes and sizes. Does learning this new way of paying for software make you reconsider your own underutilized applicabout ations? What metrics do you use in order to determine if a software is valuable or not for your business? Share with us your thoughts in the comments.