Want to understand how some SaaS companies drive high-profit margins, capture markets, and drive investments?
Just look at one of the Enterprise SaaS solutions out there.
If you already have a great time working with SMBs, the enterprise SaaS business model can be the right move for your business to get high-ticket customers and maximize revenue. You can also effectively reduce churn by adopting the right strategy.
As a link-building and full-service SaaS SEO agency, we put together our years of experience and hours of research to break down everything about enterprise SaaS and how you can adopt some of these models for your business.
What we’ll cover:
What is Enterprise SaaS?
The term enterprise SaaS brings forth the best of both worlds for enterprises. Let’s look at how enterprise software and SaaS combined over the last few years to bring a radically different solution in the form of enterprise SaaS.
What is an enterprise?
The term enterprise is used for large organizations with thousands of employees, billions in revenue, and possibly working in locations worldwide. This calls for a dynamic technology that can handle this large workforce and complex workflows.
This led to a rise in enterprise software that organizations would buy and install on-premise. This software was designed to meet the unique needs of enterprises and thus demanded a significant investment.
What is SaaS?
SaaS or Software as a Service model offers cloud-based products accessible on any device through the internet. What makes this model unique is that all the data is stored on the cloud, which makes it easy to maintain and push updates quickly and effectively.
The growth and rising popularity of SaaS tools led to the creation of enterprise SaaS. A growing number of SaaS vendors, such as Salesforce and Asana started offering enterprise SaaS offerings. This meant a revolution in the software market. Enterprises no longer needed to install the software on-premise. They could quickly start using it with an Internet connection, thus improving productivity and reducing costs.
What is enterprise B2B SaaS?
Enterprise B2B SaaS means companies selling software tools to different businesses. Here are some enterprise B2B SaaS examples.
Let’s take an example to understand this. Slack promotes its enterprise SaaS solution on its website. They offer many unique features in this plan for organizations having hundreds to thousands of employees.
What is the difference between enterprise and SaaS?
Many businesses get confused between enterprise and SaaS. While these two models have many commonalities, like they are developed keeping the business’s best interest in mind, there are some significant differences between them. Here are four of them.
Ease of implementation
The initial setup and implementation of enterprise software can sometimes take months. The reason is that the software will have to be installed on the client’s premises, requiring a lot of involvement from their IT teams and resolving hardware problems, if any.
When it comes to SaaS, the software can be deployed in a few minutes.
The training and onboarding process of enterprise software is also very time-consuming compared to SaaS, as users need to learn the in-and-out of how to operate the software.
On the other hand, SaaS tools are built to encourage users to quickly learn the tool and make it a part of their daily work lives.
Enterprise pricing involves software maintenance, licensing, and customization costs. The result is a significant upfront price which may deter many organizations.
Contrarily, SaaS usually operates with monthly and yearly subscription packages meaning customers only pay for what they use. They also do not have to fork out capital for hardware or maintenance, making SaaS a lucrative option for enterprises if the solution offers all the functionality they would get in enterprise software.
Another advantage is that SaaS reduces the need for additional IT staff to check up regularly on maintenance and attend to software housekeeping tasks. With SaaS, the customer can instead employ that IT staff in more demanding projects and save costs.
Reporting & Querying
Most enterprise solutions carry out the querying & reporting tasks through third-party tools, or they pull datasets and reformat them in a data warehouse. When it comes to SaaS, very few tools provide this option, and if they do, they are limited.
So, if you’re planning to venture into enterprise SaaS, you need to provide built-in tools or integrations through which customers can access the data they need and use that for querying & reporting.
Customization & Improvements
It used to be the case that traditional enterprise software provided more customizations than SaaS. But in recent years, that trend has changed. As SaaS software is built using low-cost tools and open web-based architecture, software vendors can quickly and easily update, modify, create, and test new features and customizations.
The client can even configure these features according to their requirements. SaaS again wins the game when it comes to new feature additions and improvements. SaaS tools constantly roll out new features which can easily be deployed as opposed to enterprise software that may need a team going to the client premise to make improvements and modifications.
All of these differences make SaaS a cost-effective and better option for enterprises.
Is B2B the same as an enterprise SaaS?
While the target audience for B2B and enterprise can be the same, there are some differences between the two.
Most enterprise-level software charge a premium fee and thus needs to deliver a high-value solution. While the goals for both enterprise and B2B fall within the same scope of improving productivity, increasing efficiency, saving costs, or optimizing marketing or sales, enterprise solutions often sell a tailored version to meet specific customer requirements.
Enterprise SaaS is creating solutions for massive corporations, while B2B SaaS can target any-size business.
For example, there may be two solutions: enterprise and B2B for marketing automation. While there may be common features, the enterprise one may offer additional customization options and features and have an account executive that provides top-notch customer support. You can also say that enterprise solutions aim to create a premium and personalized experience for their clients.
How to price enterprise SaaS?
Enterprise SaaS pricing should be set in such a way that it signifies the package you’re offering is exclusive and thus demands a high price. This exclusivity could be in the form of additional features, more options, or more users.
Most SaaS companies choose the gold standard of “Contact us for prices” when it comes to enterprise solutions. Here’s how Hootsuite shows the different features an organization can expect in its enterprise plan.
Many SaaS companies make the mistake of charging too less for their enterprise plan. While an enterprise plan should roughly be 10X the price of your normal plans, you could tinker with the numbers that suit your target market and industry the best.
Ensure the pricing reflects that your enterprise plan has all the features and functionality to demand a premium price.
How to sell SaaS to enterprises?
Closing an enterprise deal takes anywhere between 6 to 18 months. The reasons behind such an extended closing time are: having to deal with multiple stakeholders, a long and convoluted legal process, getting permissions from multiple executives, and integrating your product with many systems and processes.
Here are some ways to reduce this period and sell SaaS to enterprises:
- Reach the right people within the enterprise
- Enterprise clients are wary about data security. If they think you don’t understand their data security needs, it could be a dealbreaker for them.
- Understand the buying process of enterprises. Research and make strategies for the same.
- They might ask for multiple demos. Your demos for enterprise customers should be way different than regular demos.
- They might need to prove the value of your product to decision-makers in their organization. They’ll ask you for some way to monitor the effectiveness during the trial. Be prepared with relevant stats for the same.
Important metrics for enterprise SaaS
Launching an enterprise SaaS is no easy task. You need to constantly track things to see if your pricing strategy is right, your conversion rate is good, and if you’re getting a good ROI. Here are 4 such metrics you should keep track of:
- Customer Acquisition Cost (CAC): You can calculate this by dividing the amount spent on marketing and sales by the number of customers acquired. You can check your budget and profitability through this metric.
- Customer Lifetime Value (CLTV): It shows the projected revenue you’ll receive throughout a customer’s lifetime. This shows future profitability and helps you calculate how much you should spend on each customer.
- Churn rate: How many enterprise customers are you losing? Depending on this rate, you can find out why you’re losing customers and how to prevent that.
- Monthly Recurring Revenue (MRR): How much are your enterprise customers paying you monthly? Is it enough, or do you think you should modify your pricing?
Here’s a detailed article on SaaS metrics, how to calculate them, and what each of them means for your business.
8 examples of enterprise SaaS companies
More and more SaaS companies are now offering enterprise plans and making the field of enterprise even more competitive. Here are 8 examples of enterprise SaaS companies.
One of the oldest SaaS companies, Salesforce offers its clients a range of tools for marketing, sales, service, analytics, and ecommerce. They also offer its enterprise plan for a free trial so clients can try the product before committing to it. As of October 2022, Salesforce had a market capitalization of $145.20 billion.
ServiceNow is one of the largest platforms that offers its enterprise clients various tools like order management, customer service management, and supplier lifecycle management and automation engine. As of October 2022, ServiceNow had a market capitalization of $74.56 billion.
If you’re in the SaaS industry, you must have heard of Atlassian. Two of the most popular software that Atlassian offers are Trello and Jira. It also offers other tools in analytics, automation, collaboration, and connection. For almost all the tools, they offer enterprise plans, and the pricing varies depending on the number of users. As of October 2022, Atlassian had a market capitalization of $50.55 billion.
One of the most powerful customer support and customer service solutions, Zendesk offers various features and functionalities for enterprise plans. It has over 5450 employees and over 160,000 paid accounts, making it one of the most popular enterprise SaaS companies worldwide. As of October 2022, it had a market capitalization of $9.43 billion.
One of the most popular project management software, Asana was one of the first SaaS companies to revolutionize project management with its simple yet effective tool. It promotes its enterprise plan exclusively on the website with clear benefits and statistics to encourage action. As of October 2022, Asana’s market capitalization was $4.44 billion.
If you regularly follow the field of marketing and automation, you must have come across the name HubSpot. In a few years, it has become one of the leading companies in its niche. The pricing of their enterprise plans depends on the number of users. As of October 2022, its market capitalization was $13.35 billion.
With over 700 million users, Dropbox lets you store and manage files and share them with your team. They provide use cases for IT, sales, marketing, HR, and creative teams. Their enterprise plans provide advanced features and additional capabilities. As of October 2022, Dropbox’s market capitalization was $7.46 billion.
After moving its office suite to the cloud, Microsoft 365 also offers on-demand SharePoint collaboration, dynamics CRM, and SQL server databases. Their team also heavily invests in creating great customer experiences, making it a strong enterprise SaaS company. As of October 2022, Microsoft’s market capitalization was $1.7 trillion.
Creating a stellar enterprise software product may take time. But thorough customer research, tried-and-tested pricing strategies, and inculcating user feedback can set you on the right track. To take it one step further, communicate the value of your enterprise product to your target audience.
After all, enterprise SaaS solutions can cost an organization hundreds of dollars, and you need to demonstrate that your product is worth that investment.
One way to do that is through SEO and SaaS marketing. If you need expert help with that, get in touch with MADX team.