Why RaaS (results-as-a-service) is the Future of SaaS
What if software pricing focused on the outcomes delivered rather than features you might never use? Results-as-a-service (RaaS) is an evolving model that shifts the emphasis from features to tangible business value (i.e. results). I first heard about RaaS from Dharmesh Shah (HubSpot’s founder & CTO). For C-level executives, RaaS represents a strategic move away from traditional subscription software to results-driven outcomes. Below we look at the potential of RaaS and its ability to reshape how businesses evaluate software investments.
Why RaaS Matters
At my previous job, I managed the deployment of an event app (EventGrid) as the primary engagement tool for a major conference. One of the main features of the app was networking and finding qualified leads at the event. Midway through the conference, an executive asked me, “What would you pay for the app if I brought you a lead that was ready to buy, had a $1M budget, and we were one of three vendors being considered?” Without hesitation, I replied, “$10k.” He smiled and said, “I’d pay over $100k for that lead.”
I was floored. The conversation underscored a massive disconnect between software costs and the actual business outcomes they enable. While paying $100k for a lead might seem outlandish, paying that much for a result, like a high-value lead, suddenly felt reasonable. This moment stuck with me and drives home why RaaS is so compelling: it’s not about the features tools have, but the results they deliver.
The Challenges of Traditional Software Pricing
Since Salesforce pioneered SaaS over two decades ago, software-as-a-service models have dominated the industry, but in the AI age, they’re showing their limitations. Subscription fatigue is becoming widespread, with companies paying for tools that don’t get adopted and remain underutilized or fail to demonstrate meaningful value. Even worse, SaaS often misaligns vendor and customer interests, as vendors get paid regardless of whether the software delivers results.
Businesses need clearer accountability and measurable outcomes, but traditional models prioritize features over results. A new approach is overdue.
What is Results-as-a-Service (RaaS)?
Taking a que from performance marketing that has long been popular in e-commerce, RaaS fundamentally changes how software is priced. Instead of paying for access, seats, or features which may never be used, customers pay based on achieved outcomes. Here’s what sets RaaS apart:
Lower Risk: Costs are tied to measurable results, such as increased leads, closed sales, or operational savings.
- Enhanced ROI: Businesses gain a transparent link between their investment and outcomes.
- Shared Accountability: Vendors are motivated to ensure client success because their earnings depend on it.
- Greater Transparency: Clear contracts and metrics eliminate ambiguity.
Consider it like hiring a marketing agency: you don’t pay for their time or tools, but for results, like conversions or qualified leads. RaaS applies this principle to software, aligning costs with the value delivered.
Examples of RaaS in Action
Several innovative companies are already embracing RaaS to great effect:
- Simple.ai: This platform charges clients based on improved customer satisfaction scores or reduced resolution times, directly linking pricing to outcomes.
- Intercom: Although primarily SaaS, Intercom has experimented with engagement-based pricing, tying costs to metrics like resolved customer queries.
- Freightify: In the logistics sector, Freightify uses RaaS to charge based on savings achieved in shipping costs or time reductions in freight management.
These early pricing structures demonstrate how RAAS can deliver measurable value across industries, from customer service to supply chain optimization, by aligning their fees with the results that their customers want.
The Future of Software Pricing with RaaS
As companies demand greater accountability and measurable impact, RaaS is set to revolutionize the software industry. Early pricing models deployed by some of these companies are seeing the benefits of this outcome-oriented approach. However, challenges such as defining measurable results and ensuring data transparency remain. Addressing these hurdles will be critical to unlocking RaaS’s full potential.
Conclusion
Results-as-a-Service is not just a pricing model; it’s a commitment to aligning software investments with business goals. For C-level executives, RaaS offers a way to minimize uncertainty and maximize ROI.
