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October 20, 2009

SaaS Billing and the 'Freemium' Model: A Case Study

By TMCnet Special Guest
Scott Waldrum, Product Management, IP Applications


The benefits and applications of SaaS (News - Alert) billing are plentiful, but during the process of going live with one of our newest customers, Untangle, we realized a new and unique benefit. With SaaS billing platforms companies finally have the freedom to organize themselves in a way that works best for them, rather than according to the confines of software systems and reporting tools.

The Untangle case study is a great example of the challenges faced by companies managing multiple pricing structures and models, how SaaS billing applies and flexibility granted through on-demand billing.

Untangle, a California based company, is a proven leader in simplifying IT, providing protection, management and control of over one million computers in 20,000 organizations. The Untangle Gateway (News - Alert), the world’s first commercial-grade open source solution for blocking spam, spyware, viruses, adware and unwanted content on the network, provides a free and better alternative to costly, inflexible proprietary appliances.

Challenges and Goals

Untangle managed it's free, annual and monthly subscription customers using different systems and processes when they initially approached IPA. The company operates a "Freemium" business model whereby some of their products are free while others are premium products and are chargeable based on subscriptions. This in and of itself introduces a complexity around managing subscribers. Additionally, Untangle has a well established sales channel where a number of resellers and managed service providers (MSPs) sell the Untangle solutions and ultimately manage them for the customer.

The Untangle executive team was finding it difficult to get a consolidated view of the health of their subscription business. Real-time views of subscribers and revenue were a priority. Rolling out new subscription offerings was out of the question as too much effort was required to simply manage the current business volume.

“Some of our products are free; others are chargeable on subscription, either monthly or annually. We wanted a system that would enable us to easily manage a subscription-centric business and simplify our processes,” said Mark Floisand, chief operating officer at Untangle.

The Solution

Untangle implemented IPA's Enterprise plan allowing them unlimited pricing plans and support for tracking their channel sales. They went live with the solution in under one month, including complete integration of IPA's solution into Untangle's storefront, service and business processes as well as the migration of their existing customers to IPA. Untangle configured all of their premium subscription services in IPA's product catalog, centralizing all of their subscription offerings. IPA is integrated into their storefront for online sales and their finance systems for revenue recognition.

“Untangle has customers that subscribe directly with us, and others that rely on our resellers to manage their Untangle system. In choosing a subscription and billing vendor, it was critical for us to find a partner who’s system could accommodate our multi-channel business model. We didn’t want to change our entire business to fit into the requirements of the billing engine. IPA’s flexibility and robust application programming interface (API) allowed us to integrate quickly and effectively."-- Mark Floisand, Chief Operating Officer at Untangle.

Results

The executive team now has access to a comprehensive, real time view of their subscription business. Untangle immediately saved hours each week by automating all billing operations with SaaS subscription billing. Untangle is now able to quickly and easily roll-out new subscription offerings to their customers. The company’s subscription billing plans and channel sales model are now also supported without any changes to regular business processes.

"We now have the ability to easily roll out new subscription offerings to our customers that we just couldn’t before. Equally importantly, we’re able to measure and manage our subscription business in real time,” Floisand said.
 

TMCnet publishes expert commentary on various telecommunications, IT, call center, CRM and other technology-related topics. Are you an expert in one of these fields, and interested in having your perspective published on a site that gets several million unique visitors each month? Get in touch.

Edited by Patrick Barnard


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