Welcome!

Industrial IoT Authors: Elizabeth White, Stackify Blog, Yeshim Deniz, SmartBear Blog, Liz McMillan

Related Topics: @CloudExpo, Java IoT, Industrial IoT, Microservices Expo, Agile Computing

@CloudExpo: Article

How to Cannibalize Your Own Products Without Getting Eaten Alive

ISV billing, SaaS billing, recurring billing, subscription billing

The scenario is fairly typical. You launch your SaaS application for $14.99 per month. A few months later, a competitor launches a competing service for $10 per month. How do you respond with a competitive offer without cannibalizing your existing customers? We asked three software executives for their thoughts on the topic and have summarized their responses below:

Paddy Srinivasan, CEO, Opstera (www.opstera.com)
In the above scenario, you are introducing a new tier in the Free->Premium continuum. The inherent risk is that existing customers might want to downgrade to the new level to save albeit with a constrained set of features. While you cannot stop this, one way to have your customers think about this decision is to make the distinction between the SKUs extremely clear in the new tier vs. the premium SKUs. For example, at the low-end customers might be able to only perform 50 transactions a month (or an equivalent measure that makes sense in your business). While this might be okay for someone who is getting on board just to try the service, existing customers must think twice about downgrading for the ever-present fear of "what if I grow?" Usage-based price tiering lets your customers experience the product with little risk then upgrade to customize features to their unique needs.

Dominique Levin, CMO, Totango (www.totango.com)
If you do things right and build a strong relationship with the customer, they won't care about product transitions. As you address your customer's needs and requirements as they evolve over time, you can often generate more revenues from existing customers (as compared to prospective customers); and, the revenues you generate come at a much lower investment cost (so you enjoy much more profitable revenues). To build a strong relationship, the most important thing you can do is communicate with your customers regularly about the value you are generating on their behalf. This form of communication not only acts as a testament to your company's and product's ongoing improvement, it also expresses your dedication to continually deliver value to your customers. The next step is upselling. Upselling works best when you offer additional products that speak to your customer's needs and usage. You can learn a lot about your clients, based on which product they have purchased and how long they have been paying customers. Rallying in your customers and generating a customer base is more than half the battle. Once they're in your domain, optimize revenue potential by engaging customers as their relationship with your product builds over time. Start with the basics of value communication and build up your programs to product and usage-based initiatives. Your customers will feel that you're catering to their needs, and your business will reap the rewards.

Chris Couch, COO, Transverse, LLC. (www.tractbilling.com)
Reducing your price to attract more users but limiting their activities is always an option. But it is important to remember that customers paying $14.99 for unlimited access will have a different value equation then those paying a lower price for limited access. Customers that don't see value in paying a set amount for unlimited access to a good or service may become interested if offered a chance to pay a nominal price in exchange for options. For those subscribers, the value comes in the flexibility to consume the good or service at will. In a SaaS subscription, for those not willing to pay for a $14.99/month for unlimited access may be willing to pay a $9/month if they can access core functionality but not advanced functionality. To take the scenario one step further, the customer who does not see value in paying $14.99 for unlimited access may become interested when he can pay $1/month for each extra user, extra features or even extra minutes. At $1 extra per use, the customer has a low barrier to trying out the new features, and the business succeeds in making money on features that previously would not be monetized. But the real value for the business is the opportunity to convert the customer to different subscriptions over time, as the subscriber's situation and interests evolve.

More Stories By Ben Bradley

Known for wearing plaid and sweater vests before they were popular, Ben Bradley is managing director of Macon Raine, Inc. (www.maconraine.com) - a management consulting, marketing and demand generation firm for technology organizations. He is a graduate of the University of Iowa and was a member of the undergraduate Iowa Writer’s Workshop. His interests include the intersection of technology and marketing. Because he was never very good at sports and doesn’t have many hobbies, his primary interests include the role of marketing on internal technology adoption, micro-finance, military uses of technology and media, self-organizing networks, network and physical security, collaboration and groupware. He frequently lectures his children on a variety of topics. Bradley was raised in Wheaton, Illinois and currently resides in Glen Ellyn, Illinois with his wife, two children and a purebred Latvian Goathound named Stella.

IoT & Smart Cities Stories
The challenges of aggregating data from consumer-oriented devices, such as wearable technologies and smart thermostats, are fairly well-understood. However, there are a new set of challenges for IoT devices that generate megabytes or gigabytes of data per second. Certainly, the infrastructure will have to change, as those volumes of data will likely overwhelm the available bandwidth for aggregating the data into a central repository. Ochandarena discusses a whole new way to think about your next...
DXWorldEXPO LLC announced today that Big Data Federation to Exhibit at the 22nd International CloudEXPO, colocated with DevOpsSUMMIT and DXWorldEXPO, November 12-13, 2018 in New York City. Big Data Federation, Inc. develops and applies artificial intelligence to predict financial and economic events that matter. The company uncovers patterns and precise drivers of performance and outcomes with the aid of machine-learning algorithms, big data, and fundamental analysis. Their products are deployed...
Dynatrace is an application performance management software company with products for the information technology departments and digital business owners of medium and large businesses. Building the Future of Monitoring with Artificial Intelligence. Today we can collect lots and lots of performance data. We build beautiful dashboards and even have fancy query languages to access and transform the data. Still performance data is a secret language only a couple of people understand. The more busine...
All in Mobile is a place where we continually maximize their impact by fostering understanding, empathy, insights, creativity and joy. They believe that a truly useful and desirable mobile app doesn't need the brightest idea or the most advanced technology. A great product begins with understanding people. It's easy to think that customers will love your app, but can you justify it? They make sure your final app is something that users truly want and need. The only way to do this is by ...
CloudEXPO | DevOpsSUMMIT | DXWorldEXPO are the world's most influential, independent events where Cloud Computing was coined and where technology buyers and vendors meet to experience and discuss the big picture of Digital Transformation and all of the strategies, tactics, and tools they need to realize their goals. Sponsors of DXWorldEXPO | CloudEXPO benefit from unmatched branding, profile building and lead generation opportunities.
Digital Transformation and Disruption, Amazon Style - What You Can Learn. Chris Kocher is a co-founder of Grey Heron, a management and strategic marketing consulting firm. He has 25+ years in both strategic and hands-on operating experience helping executives and investors build revenues and shareholder value. He has consulted with over 130 companies on innovating with new business models, product strategies and monetization. Chris has held management positions at HP and Symantec in addition to ...
Cell networks have the advantage of long-range communications, reaching an estimated 90% of the world. But cell networks such as 2G, 3G and LTE consume lots of power and were designed for connecting people. They are not optimized for low- or battery-powered devices or for IoT applications with infrequently transmitted data. Cell IoT modules that support narrow-band IoT and 4G cell networks will enable cell connectivity, device management, and app enablement for low-power wide-area network IoT. B...
The hierarchical architecture that distributes "compute" within the network specially at the edge can enable new services by harnessing emerging technologies. But Edge-Compute comes at increased cost that needs to be managed and potentially augmented by creative architecture solutions as there will always a catching-up with the capacity demands. Processing power in smartphones has enhanced YoY and there is increasingly spare compute capacity that can be potentially pooled. Uber has successfully ...
SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...