The Transition from Perpetual Licensing to Application Service Providers

After requests for another pricing episode, CJ sits down with returning guest Jason Kap, the founder and CEO of Blue Rocket, a long-tenured Microsoft leader, and an expert in pricing and packaging. Together, they take a deep dive into the evolution of software pricing, tracing its journey from the early days of buying hardware and software together to buying software separately, and all the way through the eras to the emergence of SaaS and today’s usage-based and hybrid models. Jason provides a detailed look at the shifts in the industry, including the rise of application service providers and outsourced infrastructure. As they discuss the current landscape, they highlight the importance of transparency and value abstraction. Then they look to the future with advice on how CFOs can navigate pricing in the new era of AI. Packed with practical insights, this episode offers a comprehensive guide for anyone looking to understand the past, present, and future of software pricing and packaging.

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Planful is a financial performance management platform designed to streamline financial tasks for businesses. It helps with budgeting, closing the books, and financial reporting, all on a cloud-based platform. By improving the efficiency and accuracy of these processes, Planful allows businesses to make better financial decisions. Find out more at www.planful.com/metrics.

Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.

Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.

NetSuite provides financial software for all your business needs. More than 38,000 thousand companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅ NetSuite: https://netsuite.com/metrics and get a customized KPI checklist. 

Maxio is the only billing and financial operations platform that was purpose built for B2B SaaS. They're helping SaaS finance teams automate billing and revenue recognition, manage collections and payments, and put together investor grade reporting packages. 🚀 Request a demo at www.maxio.com/runthenumbers for 10% off your first year.

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TIMESTAMPS:(00:00) Preview and Intro(02:26) Sponsor - Planful | Mercury(04:51) Hardware and Software Sold Together(08:11) Software Sold for Hardware(11:48) The Origins of the Enterprise Agreement(15:44) Sponsor - NetSuite | Maxio | Leapfin(18:42) Application Service Providers(23:00) The Evolution of AWS, Google, and Salesforce(27:06) Outsourced Infrastructure and SaaS(33:54) Adobe as the Prime Example of Moving to SaaS(36:32) The Financial Implications of Transitioning to SaaS(38:46) Shelfware in the Next Wave(41:01) Usage-based Pricing(44:25) The Hybrid Model(48:29) Tips for Billing and Overages(52:14) Predictions for the Next Wave: How to Price AI(54:18) Wrap