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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Introduction
In today's digital-first business environment, Software-Defined Wide Area Network (SD-WAN) and Secure Access Service Edge (SASE) solutions have evolved from niche offerings to essential infrastructure components. As the market matures and competition intensifies, executing an effective pricing and packaging strategy has become a critical differentiator for service providers in this space. According to Gartner, the global SD-WAN market is expected to reach $8.4 billion by 2025, growing at a CAGR of 34.5%, making it one of the fastest-growing segments in enterprise networking.
For SaaS executives navigating this landscape, developing a pricing and packaging approach that aligns with customer value perception while optimizing revenue potential requires strategic finesse. This guide outlines a comprehensive framework for executing a pricing and packaging strategy project for SD-WAN/SASE services that drives both customer adoption and sustainable growth.
Phase 1: Market and Customer Research
Competitive Landscape Analysis
Begin by thoroughly mapping the competitive landscape. According to IDC, the SD-WAN market includes over 40 significant vendors with varying approaches to pricing. Document how market leaders and disruptors structure their offerings:
- Analyze tiered pricing models (e.g., Cisco Meraki's approach with Essential, Advanced, and Premium tiers)
- Examine consumption-based versus subscription-based approaches
- Review bundling strategies for security features versus core SD-WAN capabilities
- Document price points across different market segments
Customer Value Research
Understanding what customers truly value in SD-WAN/SASE solutions is fundamental to effective pricing. Research by Futuriom indicates that while reduced costs remain important, 78% of enterprises now cite security integration and improved application performance as primary adoption drivers.
Conduct structured research through:
- In-depth interviews with existing customers across segments
- Win/loss analysis of recent deals with particular attention to pricing objections
- Surveys targeting prospective customers' willingness to pay for specific features
- Focus groups to test pricing concepts with IT decision-makers
The goal is to identify clear value metrics—measurable outcomes that customers associate with your solution's value (e.g., time to deployment, reduction in security incidents, network reliability improvements).
Phase 2: Value-Based Feature Segmentation
Feature Value Mapping
Not all features deliver equal value to customers. Create a comprehensive feature inventory and map each feature to:
- Customer willingness to pay (high/medium/low)
- Competitive differentiation potential
- Implementation/support costs
- Strategic importance to your roadmap
According to research by Simon-Kucher & Partners, B2B SaaS companies that effectively tier their features based on customer value perception achieve 30% higher ARPU than those using cost-plus pricing approaches.
Packaging Architecture Development
Based on your feature value mapping, design a packaging architecture that:
- Creates clear differentiation between tiers
- Places high-value features in appropriate tiers to drive upsells
- Maintains compelling entry-level offerings to facilitate adoption
- Considers both horizontal tiers (good/better/best) and vertical packages (industry-specific bundles)
For SD-WAN/SASE specifically, consider how to structure the relationship between networking and security components. Omdia research indicates that 65% of enterprises prefer integrated solutions, but want flexibility in how they adopt the complete stack.
Phase 3: Pricing Model Selection
Pricing Structure Options
Each pricing model sends different signals to the market and creates different customer behaviors:
User-Based Pricing:
- Common for security components of SASE
- Aligns with how many security tools are purchased
- Challenge: Definition of "user" in complex network environments
Bandwidth-Based Pricing:
- Traditional for networking services
- Directly ties to consumption patterns
- Risk: May discourage usage and limit adoption
Site-Based Pricing:
- Common in SD-WAN
- Reflects deployment scope
- Predictable for customers with stable location counts
Value-Metric Hybrid:
- Combining elements (e.g., base fee + bandwidth tiers)
- Provides predictability while capturing expansion value
- Increasing in popularity according to OpenView Partners' pricing studies
For SD-WAN/SASE services, research by TechTarget indicates that 56% of customers prefer predictable subscription models with clear capacity parameters rather than purely consumption-based approaches.
Price Setting Methodology
Once the structure is determined, setting actual price points requires both art and science:
- Value-Based Anchoring: Calculate the measurable ROI your solution delivers in terms of reduced circuit costs, security incident prevention, and operational efficiency
- Competitive Positioning: Determine where you want to position relative to competitors (premium, value, or specific segment focus)
- Price Sensitivity Testing: Use techniques like Van Westendorp Price Sensitivity Meter to identify optimal price points
- Scenario Modeling: Model various pricing scenarios against your customer base to forecast revenue impacts
Phase 4: Go-to-Market Strategy Development
Internal Alignment
Price changes affect every part of your organization. Before finalizing:
- Conduct revenue impact analysis with finance
- Develop sales enablement materials and objection handling guides
- Prepare customer success for explaining value of new packaging
- Align marketing on positioning of different tiers
Customer Migration Planning
For existing customers, develop a thoughtful migration strategy:
- Grandfather existing customers for a defined period
- Create incentives for voluntary migration to new plans
- Develop clear communication plans highlighting added value
- Train account managers on migration conversations
According to Gainsight research, SaaS companies that effectively communicate pricing changes maintain an average of 92% customer retention through price increases, versus 79% for those with poor communication strategies.
Launch Execution
A successful pricing launch requires coordinated execution:
- Phased rollout, starting with new customers
- Clear internal and external communication materials
- Sales incentives aligned with strategic packaging goals
- Monitoring mechanisms to track market response
Phase 5: Continuous Optimization
Success Metrics
Establish clear metrics to evaluate your pricing strategy:
- Conversion rates by package
- Average revenue per customer
- Upsell/cross-sell success rates
- Customer acquisition cost by package
- Expansion revenue percentage
Feedback Loops
Implement structured feedback collection:
- Regular sales team input sessions
- Ongoing competitive pricing tracking
- Customer feedback surveys focused on value perception
- Win/loss analysis with pricing focus
Iterative Refinement
The market for SD-WAN/SASE is evolving rapidly. Plan for regular review cycles:
- Quarterly pricing committee reviews
- Annual comprehensive pricing strategy reassessment
- Continuous A/B testing of packaging presentation
- Ongoing feature value assessment as new capabilities launch
Conclusion
Developing an effective pricing and packaging strategy for SD-WAN/SASE services is a multifaceted challenge requiring deep customer understanding, competitive awareness, and internal alignment. By following a structured approach that starts with value identification and builds toward optimized packaging, SaaS executives can create pricing models that both resonate with customers and drive sustainable growth.
The most successful SD-WAN/SASE providers will be those who view pricing not as a one-time project but as an ongoing strategic capability that evolves with the market, technology, and customer needs. In a space where the technical offerings are increasingly sophisticated, how you package and price your solution may ultimately become your most powerful differentiator.