Материал: Transformation of business: shift to the subscription economy

Subscription business model is a model where a customer gets an access to a product or service after paying a subscription price. That means that rather than selling individual products, companies are turning towards to delivering services repeatedly. This changes financial relationships completely and requiring a new management system.basis of the traditional product world is the distribution-centric revenue management with the one-time transaction business model where sales are straightforward (shipping a product and sending an invoice to a customer to pay it). Additionally, traditional product-centric approach is tightly connected with implementation of such tools as customer relationship management (CRM) and enterprise resource planning (ERP) systems “which support sales automation, customer service, inventory management, supply chains, and accounting” (Tzuo, The subscription economy: a business transformation, 2015). The problem is that these systems were not designed for subscription based businesses, and companies who want to turn their customers into subscribers should adopt new technologies and management approach to facilitate their transformation.new management approach in the subscription model is based on the recurring revenue management (RRM) system: invoices are generated daily, monthly, quarterly or annually (Warrillow J., 2014). Thanks to this system, companies get an opportunity to manage the entire subscriber lifecycle and measure recurring revenue and subscription metrics.is focused on the individual experience which makes customer fulfillment variable: customers can request anytime changes in the service adding new users, more services, changing pricing plans, or simply canceling service. Flexibility of price and packaging is the main feature of subscription employed to satisfy any kind of users. Flexibility allows customers to receive a standard subscription agreement but use the product differently depending on their needs. Thereby, customer demand in the subscription business model is measured not only by purchase data but by usage data and purchase data together. Moreover, in the subscription economy, there are no limits in product availability: a customer can receive a product or service in that extent which is preferable for him. Thus, “differentiated value and revenue opportunities have to be created by providing differentiated product packaging (e.g., different combinations of minutes, text, and data in a cellular plan)” (Shanahan, n.d.). As a result, inventory management is replaced with the rate plan management to optimize revenue.scenario goes beyond the systems designed for one-time transaction models. That is why revenue management system should be replaced with the recurring revenue management system which can better handle the complexities and growing needs of the subscription based businesses.

Chapter 2. Subscription Models applied in SaaS businesses

.1 SaaS Subscription model: key features, market drivers and deterrents

this paper we will not cover technical details which differentiate SaaS concept from other cloud computing services such as IaaS and PaaS (the basic structure of the clod computing is given the Application 1). The focus of this paper is to explore common features which attract customers to understand how SaaS changes users’ life. This clear idea will help us consequently find advantages of SaaS subscription model and, as a result, frame particular strategies of attracting customers and turning them into subscribers. But before that, the first step should be researching SaaS as a subscription model.as-a-service (SaaS) phenomenon appeared in late 1990’s when companies started offering traditional enterprise solutions such as customer relationship management (CRM), sales force automation (SFA), and Web content management through a SaaS model. But the idea of shared resource environment and cloud computing was already formulated in 1960’s by a renowned computer scientist John McCarthy who won the Turing award for his work in Artificial Intelligence. In 1961, in his speech to MIT students he claimed that “computation may some day be organized as a public utility.” Yet this model was first implemented more than fifteen years ago, it has become a part of the business vernacular just over the past few years when “SaaS companies have proven they are able to grow their revenue and customer base through a subscription licensing model” (Singleton, 2011).common definition of Software as a Service (SaaS) is “a way of distributing software in which vendors or service providers, instead of selling it to companies, make it available to customers over the internet, using cloud-computing technology” (Singleton, 2011). It represents a software distribution model which, in contrast to an On-Premise deployment model, democratizes the access to software. The crucial characteristic of SaaS is hosting applications on provider’s service instead of storing data on users’ machines which gives an access to software from any computer connected to the internet.to allowing remote access to the software applications and data via the web, SaaS also varies from On-Premise software in its pricing model. Typically, On-Premise software is available by purchasing a perpetual license and also requires additional fees (15%- 20% per year) to maintain and support it. Any update versions also cost high additional fees. In SaaS subscription model, users do not need to buy license to use the application, install its whole complex infrastructure and then pay ongoing operating and maintenance to support it and keep it updated. As an alternative, SaaS vendors offer to “rent” a software for a period of time and get a complex support and automatic updates included in their rental price (Patterson, 2010), in other words, buyers pay an annual or monthly subscription fee which is comfortably spread over time. For more detailed comparison of the economics of SaaS versus Licensed Software revenue models it can be interesting to look through the article SaaS Revenue Models Win in the Long Run (Key, 2013).are two types of SaaS which are business software and consumer software. The most popular SaaS examples are solutions for improving workflow with greater efficiency: these are various project management systems, task organizers, collaboration tools, document management platforms. They help organize individuals’ and teams’ shared and personal projects and tasks, give them a space for collective distant activity. Besides, such platforms are supposed to help planning time and resources for multiple projects and users. The target audience of these solutions is very diverse; they attract all kind of people with big work routine. This can be freelancers, representatives of all size businesses including startups, public administrations, student project groups.pull of SaaS platforms consists of more specified solutions for particular industries and related activities. Here can be named applications for such spheres as finance and accounting, CRM, business information and analytics, human resources, marketing, operations, sales, communication and others.features which make impact on both business and personal customer performance are based on the general advantages of cloud services. They are the following positive attributes:

. Simplicity of adoptionsolutions offer powerful fast integration of all necessary services within one modern platform that leverages secure, reliable and high performance database and middleware technologies which reduce technology difficulty of installation full in-house solution. The main mission of SaaS solutions is to make it easier to accomplish tasks and help optimize business processes. SaaS products mainly have drag-and-drop functions, intuitive interface and simple visuals. They do not require as necessity coding knowledge (it can be an additional option for advanced users) and IT-background (Patterson, 2010).

. Pricepopularity of SaaS solutions is also boosted by its implementation cost. Buying a fully functional in-house system is not always affordable for companies, especially, for small and medium businesses and private users. SaaS subscription model with differentiated packages makes it more cost-effective to acquire the application. Besides, “reduced total cost of ownership is the primary and most attractive benefit driving SaaS adoption. SaaS vendors have long touted the benefits of multitenancy, a software architecture that allows many users to share a single application instance while retaining their own separate information. Multitenancy cuts costs by allowing vendors to patch and update the software for many users simultaneously and allowing many users to share the underlying infrastructure” (Kari, 2014).

. Backupplatforms reduce the possibility of losing data in case of sudden emergencies such as ordinary computer system crash or less common nature disaster and civil disorder. Computer itself does not mean much as all data are backed up by the provider whose server plays a role of buffer in any unpredictable situation. That is an important issue proved by different researches: “According to research by KPMG, 70 percent of organizations have suffered at least one project failure in the prior 12 months, and 50 percent of respondents indicated that their project failed to consistently achieve what they set out to achieve” (Oracle, 2013).

. Access to latest featurescloud services open the door for latest functionality and improved security, usability, patches and bug fixes. Continues updates are sent as soon as they are ready to consumers and it’s all done in the background, transparent to the users in your organization. These upgrades add value to consumer experience as they develop application ecosystem and give users new ways to collaborate and share information.

. Flexible customization, an integral part of being competitive in business is to be able to deal with changes easily. This flexibility requires new features and functionality for applications, for instance, adding new users to an application dashboard, upgrading original deployment with additional modules or components, or adopting entirely a new application. In SaaS platforms it is easy to manage such particular changes without concerns about changing whole infrastructure.

. Multi-tenancymodel allows the cloud services providers (CSPs) to locate a single application instance to one tenant (to one client, despite of its size) with retaining own separate information of each user rather than putting out single instances to every individual user. “Multitenancy cuts costs by allowing vendors to patch and update the software for many users simultaneously and allowing many users to share the underlying infrastructure” (Kari, 2014), which is attractive to companies with limited financial resources.

. SaaS Help Desk Solutions, most of the SaaS subscriptions include customer support which means getting immediate help of the professional team in any problem situation. Customer Support service tracks and responds to all the customer inquiries from multiple-channels like online community forums, phone, email online consultancy, webinars, tutorials, and social media. The advanced features of SaaS Help Desk Solutions are opportunity to find answers without anybody’s help at Self-service or knowledge base portal and integration with other applications (like Google Analytic or social media) (Jadhav, 2016).

. Mobile accesspopularity of mobile devices made vendors expanded beyond desktop-only access and began providing mobile SaaS apps that could be accessed from smartphones, tablets or any other device with a browser. All data in both desktop and mobile systems is typically auto-synced, which helps run business from any place and any device with the internet access (Viswanathan, 2015).conclude, SaaS solutions priced on a subscription basis demonstrates a number of strong advantages over traditional, On-Premise software deployments. For both business and personal purposes, SaaS applications deliver modern functionality and up-to-date capabilities that can satisfy any budget. Attractive affordability and the familiarity of the web browser-like user interface (UI) offered by SaaS solutions makes it more convenient for costumers to run their businesses., there also exist strong deterrents for distribution of cloud services and SaaS particularly. The major challenge which SaaS developers face today is identity management and access control for enterprise applications. Another point under contradictory debates among users is the information security. Many companies who have never worked with clouds are afraid to store their projects and client bases on the outsource servers because of fear of violating private data. In their view, their own IT departments which protect bases are more reliable than any other sided provider.indeed, the security and privacy of data is a more developed point that ordinary consumers think. This moment is not technical but psychological. There exist various technologies to expand the role-based access to the cloud, for example through a single access (single sign-on, SSO) technology. Nowadays, the leading SaaS solutions provide multi-tiered security clearance which makes keeping sensitive data completely safe (Singleton, 2011)., each of the big players in the SaaS market tends to create its own technology of relationship with the client to assure them in safety of data storage. For instance, Google has a Secure Data Connector which creates an encrypted connection between customer data and Google business applications and allows a client to control which employees can access to Google Apps resources and which cannot. CRM Salesforce provides similar functionality based on its own technology.exists a comprehensive standard ISO 27001 which describes many aspects of information security which can be confusing for customers. There is also another standard ISO 27002 which can be interesting for service providers and customers which describes the practical information security management. This standard can be used in constructing the SaaS cloud, but in any case it is necessary to develop specific standards for cloud computing.drawback of storing data in the SaaS platform is its just online availability. It makes users depended on the Internet and, in case of loss of access to the Internet, they lose access to their data in SaaS applications.more problem that SaaS vendors face is that there are users who are not ready to pay for software if they know how to get this software illegally for free. But experts say that if the price corresponds to the "painless" level, then users will probably not use illegal tools like registration code generator or wares (note: wares are software programs distributed illegally with copyright violation). But SaaS subscription model in contrast to On-Premise reduce possibility to get a software illegally as an access to personal online account can be received just after paying subscription fee., taking into account all the concerns related to SaaS solutions, that consumers have, SaaS developers should strive for a high level of transparency of their services. They should give users a feeling of totally safe and reliable storage of their data. The ideal model would be giving options of aptitude install or export of all infrastructure and repository of data created with this software. Moreover, the price should be set at the reasonable level as the main concern for most of users when they choose SaaS platform is to get more for a less price.

.2 SaaS in Russia: trends, problems and opportunities

the overview Cloud services in 2015 (CNews Analytics, 2015) a detailed investigation of the recent trends on Russian IT market is conducted. In the current part of our research we will use this overview as a reference to study trends and problems which SaaS phenomenon face in Russia nowadays. This will help us evaluate the potential significance and opportunities of SaaS solutions for the Russian customers.first big Russian cloud computing projects were launched in 2009. During 2011-2012, the development of the SaaS solutions by Russian companies was targeted mainly on small and medium business. In 2013, there were about 25 SaaS solutions prepared by Russian providers, and the main part of them were projects adapted to the SaaS subscription model from the traditional software model (PMR, 2015).recently, the situation on the SaaS market in Russian has started improving a lot. Experts from Paralleles estimate that during the last few years the share of SaaS in the cloud solutions sales in Russia reached about 70% and in the segment of small and medium businesses almost 90%. According to the experts from Russian Cloud Computing Professional Association, the Russian SaaS market consists of nearly 200 high-quality complex services for business users, whereas less than 30 young and ambitious IT companies set trends in this sphere. Most of them are not even placed among top-100 of the largest domestic IT companies but they successfully compete with the world's leading producers of IT solutions (CNews Analytic, 2015).

Another analysis provided by iKS-Consulting estimates the pace of growth of SaaS market to be around 25% in 2015-2018. The SaaS market is growing despite the fact that the Russian IT industry is generally stagnating. According to CNews100 rating (2014), the total revenue of 100 largest Russian IT companies increased slightly (+ 1%) in RUB, but decreased by 15% in dollar terms. The figures published by iKS-Consulting demonstrate also the proceeds from the cloud technologies in Russia increased by 35% in 2014 comparing to the previous year. The biggest part of this cloud revenue belongs to SaaS and makes up to 89% (the IaaS share is 9%, PaaS - 2%) (Lebedev, 2015).

Speaking about economic situation in Russia, Olivier Caisson, commercial director of Orange Business Services in Russia and CIS explains in his interview to CNews why crisis provokes the increase of cloud solutions such as SaaS (as well as PaaS, IaaS and others). In the crises time characterized by uncertainty, businesses need maximum flexibility which can be achieved by using cloud infrastructures. Another cloud trend on the Russian market announced by Caisson is improving law regulation for personal data storage which stimulates the development of local cloud market. Moreover, the Russian market has enormous growth opportunities since for many customers cloud applications are not yet an obvious solution. Comparing to Western Europe, the level of outsourced managed services is still lower in Russia. But, referring to his words, the situation is changing, and the number of companies that are interested in transferring their resources to the cloud and shifting to the outsourcing model is growing. Nevertheless, this process is still not wide-spread and this approach to market strategy planning is not common (CNews, 2015).

Ilya Bublik, Head of Corporate Business Automatization Department at SKB Kontur, thinks that combinations of software and services will be widely discussed and popular: “Cloud services are expanding and will go further. Exponential or close to it growth was shown by MoeDelo, MoiSklad, bitrix24, amoCRM, Kontur.Bughalteria, Kontur.Elba, Kontur.Diadok etc. I want to specify that this growth is not directly due to the current environment: rub’s depreciation and import phase-out. Cloud solutions are more convenient for small business in comparison with desktop solutions, as they provide an access to the app from any spot in the world and from any platforms - smartphone, tablet or stationary PC. Besides, cloud solutions provide a lot of other, “unseen” for client, necessary things: data safety, output capacity etc. In fact, the only thing that prevents the distribution of the cloud - some kind of inertia of thinking” (Consulting, J’son & Partners, 2015).

Another expert, a representative of Mango Telecom Alexey Bessarabsky also admits the fact of migration companies to SaaS as it allows them optimize costs, which is of high significance in crisis. "In crisis due the weakness of the national currency, sanctions and other difficulties it is less available to buy complex IT solutions which also stimulates the transition to the cloud-based solutions. Thus, the crisis encourages companies to move to SaaS-model” (Lebedev, 2015).is a strong opinion that SaaS applications are more suitable for small and medium businesses and private users. But some experts assure that large companies are willing even more to update their business processes with “fashionable” solutions as they understand what benefits are obtained when working with automation systems. That is why SaaS systems which give the opportunity to add extra functionality to the existing infrastructure look attractive for them. The problem is that big business is used to work with large suppliers, but both of categories - big clients and big suppliers - frequently are hostages of old corporate infrastructures and run bulky technologies which are heavily invested and, thus, difficult to replace. While big companies still utilize “heavy”, expensive traditional infrastructures, the global trend of module infrastructure becomes more obvious for the “young” part of Russian IT community. In opinion of Sergey Sobin, a head of the Workaud project, "the paradigm of IT-technologies is changing". Rodion Repin, Managing Partner of Million Agents agrees that “time of 'ponderous' decision-making has passed; the world is moving towards more specific and easier solutions". Turnkey SaaS solutions attract consumers with its in-depth knowledge of business processes. Acquaintance with variety of services that developers offer can become a source of business optimization ideas for a potential customer (CNews Analytic, 2015)., young and creative SaaS developers who offer easy turnkey solutions based on deep understanding of modern business processes get more competitive advantages in winning big companies attention. Besides, young companies who chose SaaS technology as a prime service from the very beginning do not carry “burden of the past” and so do not need to rebuild their business models. They spend more time to learn and develop their best solutions.the same time, big IT companies who are turning now to SaaS subscription model have another advantage: they use their well-established reputation and client base to shift their software solutions from the On-Premise model to the subscription one. Commercial Director of "IT Grad" Stanislav Mril, whose company is rated among TOP 25 largest SaaS providers in Russia in 2015 points out that the most profitable strategy is to sell SaaS-products from well-known brands, which have already proven their efficiency as On-Premise software solutions: "A truly explosive growth in SaaS deals comes from selling services which are highly demanded as the "box" versions of the software products of leading players in the business market (Microsoft, 1C, CommVault, ServiceNow, etc.)" (Lebedev, 2015).to the ranking of the largest SaaS providers in Russia in 2015 conducted by CNews Analytics (Application 2), due to the peculiarities of Russian legislation one of the most demanded segments in SaaS is Tax Accounting Services (SKB Kontur took the first place with the reported revenue of 5.5 billion RUB). Among the leaders of SaaS solutions there are also services of electronic trading, which do not have their foreign counterparts (B2B company Center, which is engaged in the development of the electronic trading service, won the third place in ranking with 1,16 billion RUB revenue). The rest of the structure of SaaS the Russian market follows the trends of the global market, where the greatest demand is demonstrated for the customer relationships management systems (CRM). Among CRM products in the ranking there are presented Western leading systems by such brands as Oracle, SAP, Microsoft, as well as the solutions of the domestic companies (1C, Megaplan, amoCRM). Another popular segment in the domestic SaaS market are communication and collaboration platforms, particularly, the Cloud Private Branch Exchange (PBX). There are two vendors in CNews SaaS ranking working in this field: they are Mango Telecom with revenue of 1.35 billion RUB (2^nd place) and Telphin (318 million RUB, 7^th place). "Now, a significant share of SaaS solutions belongs to the Tax Accounting Services. But experts also predict fast development of cloud-based solutions for remote collaboration and communication. The main factors contributing to this growth are the dynamic implementation of mobile devices, new formats of business with increasing amount of distant working employees, the need to take quick decisions and, as a result, real-time access to information from anywhere in the world”, says CEO of Telphin Marina Turina (Lebedev, 2015). The ranked members showed different dynamics of revenue. The turnover of the five participants has increased more than twice: amoCRM (+ 193%), Cloud4Y (+ 124%), "IT Grad" (+ 114%), "Business Projects" (+ 109%), "CIT Region" (+ 105%).leader of Qsoft (amoCRM) Mikhail Tokovkin connects revenue growth with successful positioning in the rapidly growing niche: "Although CRM systems have already been around for a long time, many companies realize the value of working with leads and customer base just now. amoCRM is very precisely focused on this need and offers a simple and convenient solution".specialist of Cloud4y company Eugene Bessonov links the success of his company with a crisis and with the ability to adjust to the demands of the market at the right moment: "The reasons of the interest can be, firstly, the reduction of IT budgets, which cloud services are able to manage with, and, secondly, the desire to reduce the risks of "idle" equipment. In addition, the expansion of our business proposal up to 20 cloud services helped attract new customers and increase an average invoice of old clients".about small and medium business that often does not have capacity to deploy their own infrastructure, it seems logical that SaaS is the best solution for them. But SaaS developers note that small and medium business is a difficult audience. On the one hand, the current economic situation is challenging for small and medium companies. "In a crisis, entrepreneurs are not confident in the future, the ability to manage without great investments in IT infrastructure is especially attractive", says Sergey Maksimenko, CEO of GC "System Technology". The limited budgets and the need for fast and powerful solutions make SaaS technology a natural remedy for those who look for speed and flexibility. SaaS applications are available at a price, they can be quickly installed and connected, and they address specific business problems and give immediate tangible results. Consumers may not have their own IT professionals, and, actually, they do not need it. All expenses are included into subscription price. But on the other hand, there is still not enough knowledge, a basic understanding how to use the solution, how simple and accessible it is., over the past few years, small and medium business has made a big step forward. In the research Global and Russian SaaS-Solutions Markets in B2B Segment (Consulting, J’son & Partners, 2015) there was made a forecast that “Russian SaaS market in the small business segment will reach 28 bln RUB by 2016. Currently, the growth rates of SaaS market overstep the global rates, according to the estimations of different analytical agencies” (Application 3).are changing their attitudes and suppliers, in their turn, are trying to optimize their proposals for small companies’ needs. Thus, for instance, amoCRM company offers CRM package for small businesses for about 5000 RUB per month; for single users, it is possible “to get a place in the cloud” in the accounting application for 500 RUB per month. The increased activity of small businesses helps develop the technology. "Small and medium business is more demanding: the service as well as the interface is very carefully evaluated, and the feedback comes back quickly", Sergey Maksimenko says. Developers have to prepare high-quality, understandable solutions so that all kind of unexperienced users could implement them in their business processes., Russian SaaS providers sometimes still offer two different options of payment for their software products. One of them is a traditional single payment for On-Premise deployment with perpetual rights over software and another one is a subscription model requiring recurring payments. This tendency demonstrates the fact that not all the consumers yet are ready to use subscription as the only way of acquiring software (excluding solutions which were designed as subscriptions from the very beginning). In contrast, foreign SaaS providers commonly employ just only the subscription model, even if their product was delivered On-Premise in the past (like it was with Adobe, Microsoft Office, SAP, Autodesk). Adobe can be the brightest example of a company who made this shift not without difficulties connected with changing consumers thinking about subscriptions. In 2011 the company announced its intention to shift from being a company that sells software to one that rents it out. For the next three years, the reaction of their clients was more than furious: from $833 million in revenue in 2011 the company dropped down to $268 million in 2014. Even while they were continuing to fall in their earnings, in 2013 Adobe announced that there would be no newer releases of its perpetual Creative Suite. But over the few next years their income finally has started growing again, and to end 2015 they expected to come with $3 billion in annual recurring revenue and with approximately 5.9 million subscribers. But the point of success of this story was value nurturing - giving consumers not the same product but under different payment model but bringing value to their new experience: “The key was not just transforming the price and how people paid us. We needed a product that was materially different, a whole new product”, admitted Mark Garrett, Adobe’s CFO (McCann, 2015).example shows that subscription is not always the customer’s preferred model. For many customers the traditional license model is still relevant, and in spite of the increasing popularity of the subscription approaches it will continue to be so especially when speaking about such developing markets as the Russian one.up, it is possible to claim that SaaS market is the largest segment on the cloud services market in general, and the interest to use such type of cloud solutions is constantly increasing in Russia due to the opportunity to reduce the capital costs by replacing them on operational. One of the central factor that can deter the choice of SaaS is mistrust to information security of stored data connected with inertia of thinking rather than with real situation.

.3 Predicted impact of SaaS subscription model on the Russian business landscape

digital solutions expansion over the globe is a fast developing trend and SaaS is believed to be a driving force behind this digitalization. We use SaaS far more often than we think. SaaS solutions are all around persistently convincing us in their convenience, simplicity and efficiency. As SaaS Addict writer Omri Erel says, “SaaS will be everything and everywhere, in a way that allows us to share information, intelligence, insights and opinions at all times.” (Harvey, 2016)intimacy between SaaS companies and their customers has increased after the fast rise of the subscription economy. The subscription economy turns relationships of companies with customers into more direct, responsive, complex and multi-channel. Customers become certainly a key part of this relationships and companies rather than spotlighting product itself or transaction as a central point of their business, should live with the idea how bring value to customers. The main focus in the formula for growth should be on monetizing long-term relationships instead of shipping products.all above as a fundamental base of the SaaS subscription model, we can consider the impact of SaaS on Russian business landscape from two perspectives: this can be impact on companies who are clients of SaaS providers, and on SaaS providers as they are representatives of business landscape as well., the predictable consequences of wide use of SaaS solutions can lead to a scenario where companies become more focused on their own business specialization and so the efficiency of their work increases as more time is dedicated to specific business tasks. This common productivity grow will healthfully influence Russian economy in general bringing more professional services in all kind of industries., SMB companies which do not have enough industrial resources and finances to complete different tasks not predominant for their business, putting a part of their responsibility on SaaS providers, finally, get equal opportunities on the market to become competitively attractive in their niche as they use help of professionals with huge experience when working on their projects.from a SaaS companies’ perspective, the possible impact of implementing the SaaS subscription model into their business is vastly big. First of all, as it was reported in the various researches used in our paper, the pace of growth of Russian SaaS market is increasing and estimated to be around 25% in 2015-2018 despite the fact that Russian IT industry is suffering from crises. That means that SaaS solutions will only grow in their attractiveness gaining the biggest share among cloud services and becoming highly popular than ever before. One of the reason of this rapid grow can be “fast” channels of communication which are indispensable part of the subscription model. Being so close to clients feedback motivates providers to develop and update their software quicker, better and further in order to keep their customers satisfied and renewing their subscriptions. This positive influence of new communication standards which force providers improve their services encourages high-speed progress of Russian SaaS market in general., SaaS companies worldwide, and particularly in Russia, are gaining reputation of an expert community: their experience is based on countless cases of improving business efficiency, they conduct diverse researches and collect extensive library of analytic data which help them provide better solutions for businesses of any industry. Moreover, they use these analytics not just to develop their own solutions, but also to share their wide experience with their audience in their blogs, forums, webinars. Some SaaS companies offer educational courses prepared by their experts, arrange presentations and workshops for partner universities and business organizations. Partly, it is a result of the value nurturing approach which suggests that clients do not want just to get a product, they want to get some value when they acquire this product, and new knowledge is a kind of universal value which SaaS companies bring to society (Janzer, 2015). Thus, SaaS companies can be considered as a source of highly useful information with their reliable data and practical tips.possible negative consequence of the universal penetration of SaaS subscription applications to solve business tasks is about reaching the saturation point when there will be too many online subscriptions which will be hard to manage. But in Russia the trend of applying SaaS solutions into business workflow is just rising and it is too early to anticipate this downturn.

Chapter 3. Real scenarios of SaaS infrastructures and applications

.1 SaaS Subscription businesses: comparison of foreign and Russian cases

, since the basic principles and key features of the SaaS subscription models are explored, and strong and weak sides of this phenomenon in the contest of the Russian business landscape are found out, the empirical study of the real SaaS infrastructures and applications scenarios should be conducted to approbate the theoretical theses of this research.the empirical part of the paper we use the case study method to provide a three-stage research. This method is applied to reconstruct the cases of implementation the SaaS subscription model in Russian and foreign software companies by collecting detailed descriptive data qualitative in nature.

The flow of the case studystage. Preparation

In the first part of the research, we made a choice of 16 SaaS applications based on the following restrictions:

)   The selection includes 8 Russian SaaS applications with the subscription business model;

2)      The selection includes 8 foreign SaaS applications with the subscription business model;

)        The selection is random and includes applications by companies of different size, degree of popularity, and market share;

)        The selection is restricted with the applications with corporate clients which employ these solutions for business purposes (B2B segmentation);

)        The chosen applications have 3 and more reviews each published in the leading business software review platforms.

For this purpose, we used the next leading business software review platforms:

)   G2Growd - “the world’s leading business software review platform, leveraging its 70,000+ user reviews read by nearly 600,000 software buyers” (G2Growd);

2)      GetApp - “the leading premium business app discovery platform on the web. The site focuses on profiling established business apps - mostly software as a service (SaaS) - targeting an audience of small and medium-sized businesses and business buyers from enterprise departments” (Nubera);

)        StartPack - “Comparison system for cloud services performance and reviews, which helps find cloud integrators with specified criteria” (StartPack).

As a result, we pointed out the next companies for our case study:

next step of the research was to define characteristics relying on which we could collect qualitative data and describe the chosen solutions within unified systematic approach. With this aim, we have compiled a set of features that illustrated the applications from the communication perspective: these features represented how applications involve clients into communication processes, how they support relations, which channels of communication they take advantage of and others. These set of features was based on the deep analysis of the reviews left by clients on the G2Growd, GetApp and StartPack review platforms. We observed a vast range of both positive and negative feedback (Application 5) and selected the points of view related to the issue and of the highest concern for clients. Consequently, there was designed the following original worksheet:

1) SaaS Solution;

2)      Category;

)        Business model;

)        Key idea;

)        Landing Page (Official Site):

·  Simplicity;

·        Usability;

·        Utility;

6) Call to action button;

7)      Service Features;

)        Promotions;

)        Compliance with law;