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Content Introduction1. Market evolution

.1.Transformation of business: shift to the subscription economy

.2 Subscription based economy model overview: characteristics and functions2. Subscription Models applied in SaaS businesses

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

.2 SaaS in Russia: trends, problems and opportunities

.3 The impact of SaaS subscription services on the economy and the society3. Real scenarios of SaaS infrastructures and applications

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

.2 SaaS Subscription model in (ADD)

.3 Success strategies to attract and retain subscribers123456

situation on the market is constantly changing. The nowadays consumers are more attentive and look for newer, more convenient and easier ways of accessing goods and services. There is a common idea of the “right now” need, which means that a product cannot be delivered later. It should come at the right moment to satisfy a spontaneous and transitory wish. But, at the same time, as it is known that the wish is transitory, there is a need to be able to stop using this product as fast as it is not useful anymore (Hutzler, August). They do not necessarily want to buy a product that can became very quickly old-fashioned or dysfunctional. In the report prepared by The Economist Intelligence Unit in 2014, it is said that “80 percent of customers are demanding new consumption models including subscribing, sharing, and leasing - anything except actually buying a product outright” (Tzuo, The subscription economy: a business transformation, 2015), in other words, that are the models that mainly respect an idea of temporary acquisition.means that businesses need to handle customer loyalty, pricing, and selling strategies in a very different way to keep their successful relationship with their consumers alive. Since consumers are trending towards a hassle-free shopping experience, more and more companies, looking for new growth opportunities, are changing their business strategies from a pay-per-product model to a subscription based model. Indeed, this subscription model is not new - for instance magazines and newspapers have been selling subscriptions for few centuries (Warrillow J., 2014). But, more recently, new sorts of industries have adopted the idea of intensifying the subscription based model selling strategy. The year 2007 was called by experts a focal milestone in the global shift from the traditional economy to the subscription economy (Zuora). Since then, over all the industries, this change happens more evidently in the software industry with the transition from a per-pay-use license model to the SaaS subscription model (Longanecker, 2015).paper is focused on the software-as-a-service (SaaS) as its success is becoming largely noticeable around the globe. Over the past few years, commercial cloud computing (SaaS is a part of this phenomenon) has been rapidly increasing in gaining market share (Darrow, 2011), making new possibilities available for both software vendors and consumers. These changes happen with a sustained attention of the traditional perpetual software markets: without deep knowledge about cloud computing, new business and revenue models, strategies of attracting and retaining consumers, they risk to lose their weight in this new business reality. In the research Global and Russian SaaS-Solutions Markets in B2B Segment presented by J’son & Partners Consulting in July, 2015 it is said that “In accordance with IDC forecasts, 27.8% of global corporate apps will be based on SaaS model by 2018, it will generate $50.8 bln revenue in comparison with $22.6 bln and market share of 16.6% in 2013” (Consulting, J’son & Partners, 2015).subscription model is a global trend which could not stayed without attention in the Russian business landscape. Experts from Paralleles estimate that 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% over the last few years. 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 (CNews Analytic, 2015).

Problem statement

The leading players of the Russian software market express different opinions about perspectives of SaaS subscription model in Russia. While the smallest part of the software companies managed already to find and take their unique market niche and are successfully expanding their businesses now, the biggest part of suppliers demonstrates much modest growth of their SaaS services. But in this new realities, it is becoming important to understand how SaaS subscription model works and more challenging, how it is changing relationships between companies and consumers to use profits of basing a business on SaaS model.

Field of study

Subscription economy in Russia

Object of the research

SaaS subscription model

Objective

Derive particular strategies of attracting and retaining subscribers of SaaS platforms with the subscription business model.

Tasksachieve this objective, the following tasks are formulated:

. Analyze theoretical and methodological aspects of the subscription economy;

2. Define features of the SaaS subscription business model;

. Prepare and interpret a database of the cases of the Russian and foreign SaaS solutions for business with subscription business model;

. Check hypothesis of the study that the subscription model, applied in a software company suit better clients’ needs but it can distract clients if implemented carelessly.

Methodology

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