Insights on Usage-Based Billing and Flexibility with Fazal Gupta
Fynn Glover
·
05/30/2024
"The trend towards usage-based billing and customer-driven flexibility in enterprise software is revolutionizing how we think about monetization." — Fazal Gupta
Fazal Gupta, co-founder of Logik, sat down recently with Schematic to share his insights on the evolving landscape of B2B SaaS. This blog highlights key points from our conversation, focusing on his professional journey, the vision behind Logik, and lessons he's learned about monetization, pricing, and packaging.
Fazal's insights provide valuable lessons for product and engineering leaders who are working to navigate the complexities of SaaS monetization. His experience underscores the importance of flexibility, the decoupling of pricing from code, and the consumerization of B2B SaaS purchasing.
"Understanding the 'why' behind the 'what' pulled me into product management."
Fazal has operated for a number of influential tech companies. After completing his computer science degree in India and working in a small company, he moved to the US to join Big Machines. There, he transitioned from software development into product management, driven by a curiosity about the business side of technology. Following Big Machines’ acquisition by Oracle, Fazal led the Oracle CPQ Cloud product and architecture team, learning the intricacies of large-scale operations. His journey then took him to Workday, where he managed product development for Adaptive Financial Cloud, before co-founding Logik to reimagine the CPQ space.
"We are removing the idea that this is just quote-to-cash. It’s about capturing needs wherever they arise."
Logik aims to redefine the quote-to-cash process by focusing on customer needs across multiple channels. Traditional CPQ tools often fail to meet the demands of modern e-commerce and self-service buyers. Logik offers a more integrated and flexible approach, leveraging the founding team's deep expertise in the CPQ space to simplify the purchasing process for complex products.
"Customers now prefer to pay for what they use. This trend challenges SaaS companies to develop flexible and scalable solutions."
Fazal highlights 4 critical aspects of pricing, packaging, and monetization in the SaaS industry:
Usage-Based Billing: The shift towards consumption-based pricing, popularized by hyperscalers like AWS and Google Cloud, is significant. Companies must develop flexible billing models to meet customer expectations.
“Customers want to predict costs, but they are becoming comfortable with usage-based pricing models.”
Cloud-Native Solutions: Many B2B companies are still transitioning from cloud-hosted to truly cloud-native architectures. This transition is essential for delivering the composable experiences customers demand.
“Making the shift to cloud-native is crucial for meeting the consumerized expectations of B2B buyers. It's also hard to do, and customers don't want to wait.”
Flexibility in Product Offerings: Companies need to offer products in various configurations to match customer needs. This involves continuously adapting packaging strategies to stay relevant.
“Flexibility in how you package and present your offerings is key to staying competitive in the SaaS market.”
Complexity of Monetization Operations: Managing multiple systems and sources of truth can be challenging. Integrating sales, engineering, and finance systems effectively is crucial for accurate monetization strategies.
“The reality of different sources of truth across departments adds significant complexity to supporting the evolution of how the business monetizes."
"B2B companies are adopting B2C-like flexibility, driven by e-commerce trends and the impact of COVID-19." — Fazal Gupta
Fazal notes several inflections in the B2B SaaS space. The digital economy's maturity has led to a shift where B2B companies are adopting more flexible, consumer-like approaches to pricing, packaging, and selling their offerings. The demand for seamless, multi-channel purchasing experiences is growing, and there is a notable shift towards consumption-based pricing models. These trends challenge SaaS companies to iterate continuously, and in order to do so, develop scalable, flexible approaches for managing pricing, packaging, and monetization operations internally so that they can align with evolving customer expectations.
For those interested in learning more about Logik or discussing e-commerce and enterprise software trends, Fazal is on LinkedIn.