.png)
Estd 4.22.2023
Introduction
In today's digital landscape, Structured Data Archiving (SDA) and Application Retirement solutions have become critical investments for enterprises looking to manage legacy systems, control costs, and maintain regulatory compliance. However, for SaaS providers in this space, determining the right pricing and packaging strategy remains one of the most challenging aspects of go-to-market planning. An effective strategy not only drives revenue growth but also communicates your solution's value proposition and differentiates you from competitors.
This guide walks through a systematic approach to developing a pricing and packaging strategy specifically for SDA and Application Retirement SaaS solutions that resonates with enterprise buyers while maximizing your company's growth potential.
Understanding the SDA and Application Retirement Market Dynamics
Before diving into pricing models, it's essential to understand the market context in which your solution operates.
Market Drivers and Value Propositions
According to Gartner, organizations can reduce application portfolio costs by more than 50% by actively retiring legacy applications and archiving their data. The primary value drivers for customers include:
- Cost reduction - Eliminating maintenance costs of legacy systems
- Compliance adherence - Meeting data retention requirements across industries
- IT modernization support - Facilitating cloud migration and digital transformation
- Performance optimization - Improving core system performance by offloading historical data
- Risk mitigation - Reducing security vulnerabilities in outdated systems
Research by Forrester indicates that enterprises are increasingly willing to invest in these solutions, with the market growing at approximately 15% annually as digital transformation initiatives accelerate.
Phase 1: Market Research and Value Assessment
The foundation of your pricing strategy begins with thorough research.
Competitor Analysis
Map out your competitive landscape across these dimensions:
- Direct competitors - Other dedicated SDA and Application Retirement solutions
- Pricing models - Subscription tiers, usage-based, value-based approaches
- Packaging structures - Feature sets, service levels, add-ons
- Target segments - Enterprise, mid-market, industry specialization
Document pricing information where publicly available and through customer/prospect interviews. According to a recent survey by TSIA (Technology Services Industry Association), 78% of enterprise software providers now employ some form of value-based pricing rather than purely cost-plus approaches.
Customer Value Measurement
Quantify the value your solution delivers through:
- Total Cost of Ownership (TCO) analysis - Calculate legacy system maintenance costs vs. your solution
- Compliance risk reduction - Quantify potential regulatory fines avoided
- Infrastructure savings - Document storage costs eliminated
- Labor efficiency - IT staff hours reallocated to strategic initiatives
Research by Deloitte suggests that enterprises can achieve ROI exceeding 300% over three years with properly implemented application retirement initiatives.
Phase 2: Segmentation Strategy
SDA solutions need targeted packaging for different customer segments.
Segmentation Variables
Develop packages based on:
- Data volume - Storage capacity or number of records
- Application complexity - Simple to highly customized legacy systems
- Industry requirements - Healthcare (HIPAA), Financial (GDPR, FINRA), etc.
- Integration needs - Connections to active systems
- Retention requirements - Short-term vs. long-term archiving policies
Segmentation Example
|Segment|Primary Needs|Willingness to Pay|
|-------|-------------|------------------|
|Healthcare|Ultra-secure storage, HIPAA compliance, patient record access|High|
|Financial Services|Complex transaction history, audit trails, regulatory reporting|Very High|
|Manufacturing|Historical inventory, production, quality data with limited access needs|Medium|
|Government|Long retention periods, FOIA response capabilities|Medium-High|
Phase 3: Pricing Model Selection
Choose the right approach based on your solution's value drivers.
Common Pricing Models for SDA Solutions
- Tiered Subscription
- Monthly/annual fee based on predefined service tiers
- Example: Basic, Professional, Enterprise packages with increasing capabilities
- Best for: Solutions with clear feature differentiation across segments
- Consumption-Based
- Pricing tied to data volume archived or active users
- Example: Per-TB stored or per-application retired
- Best for: Variable-sized implementations with predictable scaling
- Value-Based
- Pricing tied to measurable business outcomes
- Example: Percentage of legacy system costs eliminated
- Best for: Solutions with clearly demonstrable ROI
- Hybrid Models
- Base subscription plus consumption components
- Example: Platform fee plus per-TB charges
- Best for: Balancing predictability with growth potential
According to OpenView's SaaS Pricing Strategy Survey, 45% of enterprise SaaS companies now employ hybrid pricing models to maximize revenue while maintaining customer alignment.
Phase 4: Package Design and Optimization
Structure your packages to guide customers to the right solution tier.
Package Construction Principles
- Value Ladder Approach
- Create clear progression of value across tiers
- Ensure 3-4 options with distinct use cases
- Position mid-tier option as most attractive for target segment
- Feature Differentiation
- Core features: Available across all tiers (basic archiving, standard retention)
- Value features: Mid-tier differentiation (advanced search, API access)
- Premium features: Enterprise-only capabilities (custom retention policies, advanced analytics)
- Example SDA Package Structure
Essentials
- Up to 5TB archived data
- Standard retention policies
- Basic search capabilities
- Email support
- Standard SLA (99.5% uptime)
- $X per month
Professional
- Up to 25TB archived data
- Custom retention rules
- Advanced search and discovery
- Phone and email support
- Enhanced SLA (99.9% uptime)
- $Y per month
Enterprise
- Unlimited archived data
- Industry compliance packages
- Advanced analytics
- Dedicated account manager
- Premium SLA (99.99% uptime)
- Custom pricing
Phase 5: Pricing Strategy Testing and Validation
Before full market rollout, validate your approach.
Testing Methodologies
- Customer Advisory Boards
- Present packaging options to select customers
- Gather feedback on value perception and tier boundaries
- Adjust based on response patterns
- Prospect Testing
- A/B test different pricing pages with site visitors
- Track conversion rates across package options
- Document common questions and objections
- Win/Loss Analysis
- Review pricing discussions in won/lost deals
- Identify price sensitivity thresholds
- Flag competitive pressure points
According to ProfitWell research, companies that test pricing at least quarterly grow 2-4x faster than those that test less frequently.
Phase 6: Implementation and Rollout
Once validated, prepare for market introduction.
Implementation Checklist
- Internal preparation
- Sales enablement and training
- Pricing tools and calculators
- ROI models and value demonstration materials
- Customer communication
- Transition plan for existing customers
- Grandfathering strategy (if applicable)
- Announcement timeline and messaging
- Technology readiness
- Billing system configuration
- Usage tracking and reporting
- Customer dashboard updates
Phase 7: Continuous Optimization
Pricing is never "set and forget" - establish ongoing monitoring.
Optimization Framework
- Key Metrics to Track
- Average Revenue Per User (ARPU)
- Customer Acquisition Cost (CAC)
- Customer Lifetime Value (CLV)
- Feature adoption rates by tier
- Upgrade/downgrade patterns
- Adjustment Triggers
- Significant market changes
- New competitive entrants
- Feature cost structure changes
- Customer feedback patterns
- Win rate changes by segment
Conclusion
Developing an effective pricing and packaging strategy for Structured Data Archiving and Application Retirement solutions requires balancing market dynamics, customer value perception, and internal business goals. By following this structured approach and maintaining a value-based mindset, SaaS providers can create pricing models that resonate with enterprise buyers while driving sustainable growth.
The most successful strategies align closely with how customers measure ROI from these solutions—through cost reduction, compliance improvement, and operational efficiency. As the market continues to evolve, regular reassessment and optimization of your pricing approach will ensure continued competitiveness and value delivery.
For SaaS executives looking to enhance their pricing strategy, the investment in this structured process typically yields 5-15% revenue growth without additional product development, making it one of the highest-ROI activities your organization can undertake.