The pitfalls of hidden costs in SaaS

And why predictable pricing matters

The convenience and many benefits of software-as-a-service (SaaS) solutions are clear, such as increased productivity, collaboration, and flexibility. However, there are a few pitfalls in their adoption that can really sour a buying experience. Perhaps topping this list is the frustration of having to buy software and figure out exactly what’s included — and what isn’t. 

Since pricing is often a key factor that frustrates software buyers, let’s explore common SaaS pricing issues and how Keepit addresses them with a transparent buying process through predictable pricing.

The current reality of buying SaaS solutions 

Buying SaaS solutions is often marketed as easy and straightforward, but in practice, it can be more complex than it initially seems, particularly when it comes to understanding the full cost and the features included in a package.

The reality is that for many SaaS solutions, figuring out their pricing seems to be as complex as the software itself (or maybe even more complicated). These pricing challenges can be a significant barrier for businesses trying to make informed decisions about the software they need and how to budget for it. There’s a number of variables making pricing difficult, such as hidden costs, scalability, and feature tiers which often exclude key features you need.

But why is it that complicated pricing is something those buying software deal with so often? Perhaps it’s partly because some companies, eager to capitalize on the growing demand for cloud-based solutions, offer pricing models that seem appealing at first look to get the buyer hooked on their service due to a low sticker price, only to later learn about the true cost of the solution.

However, once buyers adopt a solution, start using it, and then dig deeper, they often encounter hidden fees, unpredictable runaway costs (particularly relevant on services that bill based on data storage and transfer), or missing features from what was sold to them in the sales process and now doesn’t fulfill their needs without significant add-ons. What this amounts to is frustration, mistrust, and dissatisfaction.

And, once a buyer is already in the ecosystem and “hooked,” the sunk-cost fallacy may kick in — whereby a person becomes reluctant to change or replace a service because they have invested heavily in it, even when it’s clear that replacing it would be more beneficial than sticking with it.

Predictable pricing emerges as a welcomed respite to these issues by offering transparency and stability in an otherwise convoluted market, ensuring buyers get exactly what they need, expect, and pay for. But first, let’s look into some of the common issues of SaaS pricing and why it has become a prevalent problem.

Common challenges in SaaS pricing 

Confusing offerings

One of the most significant challenges buyers face is deciphering what’s actually included in the software packages they purchase. SaaS providers often bundle features in ways that can be difficult to understand, leaving customers unsure of whether they’re getting the solution they truly need.

This confusion can lead to situations where buyers think they’re buying a comprehensive solution, only to discover later that essential features are either missing or require additional purchases. This not only wastes time and resources but also erodes trust between the buyer and the provider.

For many data protection solutions, they typically add rehydration fees for different tiers of data storage that lead to extra fees in a recovery scenario, as well as the time needed to rehydrate said data. This makes recoveries expensive and affects performance.

Hidden fees and extra costs 

Hidden fees are another major pain point in SaaS pricing. Companies often present a base price that seems reasonable, only to tack on extra costs as customers start using the software. A common scenario involves adding users or accessing additional data storage (for gigabit-based storage models), which can suddenly and unpredictably inflate costs far beyond what was initially budgeted.

For example, rehydration fees — charges for accessing archived data — are often not clearly communicated upfront. Similarly, different tiers of data storage can lead to unexpected fees during recovery scenarios, where the need for quick data retrieval makes these costs unavoidable. These surprise expenses not only strain budgets but also impact the overall performance and reliability of the software.

Unpredictable pricing models 

Consumption-based pricing models, like those used by AWS, introduce a different kind of challenge. While they offer flexibility, they also create significant uncertainty. Predicting consumption can be incredibly difficult, especially as business needs shift. This unpredictability often results in companies either overestimating their needs and overspending or underestimating and facing unexpected additional costs. The lack of a clear, fixed cost structure makes it hard for businesses to budget effectively, leading to frustration and possibly budget instability.

SaaS buying fatigue 

Compounding the problem of dealing with hidden costs and unclear pricing practices in SaaS is the sheer number of applications organizations are utilizing in their portfolios. Peaking at an average of 130 SaaS apps in 2022, organizations are increasingly powered by SaaS tech stacks.

This rapid expansion not only complicates cost management but also exacerbates the issue of unpredictable pricing models, as organizations struggle to accurately forecast expenses and ensure they are getting the full value from each application within such a vast and diverse ecosystem. Buyers may end up asking themselves: Did I buy what fit my needs?

To help alleviate SaaS fatigue (Read: pricing frustrations), we make it easy and predictable to buy our service. Let’s look into how we do things differently at Keepit to make sure our service is always as simple as possible. 

How Keepit stands out with predictable pricing 

Straightforward seat-based pricing 

Keepit recognizes the challenges prevalent in SaaS, and therefore we offer a straightforward solution with a simple, predictable seat-based pricing model. Unlike other SaaS providers that complicate pricing with various add-ons and hidden fees, Keepit’s model is simple and transparent: Customers pay based on the number of seats (users) they need, with all essential features included in that price. You pay one flat fee per user which includes everything.

This approach eliminates the guesswork and ensures that there are no surprises down the road and no consumption calculations to make that are common with data-based pricing schemes. There’s no need to calculate costs or approximate data usage; what you see is what you get.

Easy scaling 

As businesses grow, their software needs evolve. Keepit makes scaling easy by allowing customers to add seats without worrying about additional hidden costs. There’s no need to estimate increased consumption, adjust for egress or ingress fees, or worry about restore costs.

This simplicity means businesses can focus on growth without being bogged down by complex pricing structures or unpleasantly surprised by budget-breaking hidden fees or data rehydration or transfer fees. When we sell X number of seats, it’s always this price.  

Better value with all features “unlocked” 

One of the key differentiators for Keepit is that all features are “unlocked” from the start. Customers don’t need to worry about missing out on critical functionalities: Keepit’s packages include unlimited data storage with no extra fees for storage or retention, unlimited free egress and ingress, unlimited point-in-time restores, and included data encryption — both in transit and at rest.

For example, in SaaS data backup and recovery, the difference between a restore with Keepit versus a restore with a competitor is that with Keepit, you get to skip the most time-consuming part — rehydrating data. All data protected with Keepit is stored as hot tier, with full redundancy through dual data centers, so there are never any transfer fees or rehydrating fees.

There’s also no added cost for unlimited retention and departed-user data is retained without additional charges. This comprehensive approach ensures that CISOs and CIOs have full control over their data without the burden of unexpected costs or compromises in data protection.

No buyer’s remorse 

With Keepit’s clear and transparent pricing, customers can buy with confidence, knowing exactly what they’re getting. There’s no risk of buyer’s remorse because the pricing structure is straightforward and all-inclusive. Buyers receive the coverage and capabilities they need, without the fear of hidden fees or surprises. This transparency builds trust and ensures long-term satisfaction with our customers who know very well what’s out there in terms of pricing practices.

Conclusion: Scale confidently with predictable pricing

As businesses continue to expand their reliance on SaaS solutions, transparent and predictable pricing is not just a nice-to-have — it’s essential. Don’t let hidden costs and complicated pricing models drain your budget and trust. Discover how Keepit’s straightforward, all-inclusive pricing can provide the simplicity and confidence you need to scale your operations without fear of surprise fees.

By focusing on simplicity and transparency, Keepit helps businesses future proof their operations, allowing them to scale confidently without the fear of unexpected costs or the frustration of hidden fees, ultimately fostering a more positive and trustworthy software buying experience.