Exploring a business to business recurring revenue framework for the delivery of software as a service through a cloud computing channel

Cloud Computing (CC) is creating a new paradigm for the distribution of computer software applications. Within this context CC enabled Software as a Service (SaaS) fundamentally changes the revenue expectations and business model for the application software industry. This study considers the revenue expectation of the CC industry and its dependency on renewal subscriptions, while the study focuses on SaaS in the Business-to-Business (B2B) domain, delivered through the CC channel. In this new world securing the SaaS subscription renewal is critical to the survival and prosperity of the Cloud SaaS business. Of note is that any significant attrition, i.e. cancellation or reduction of the service, can have a significant impact on the financial viability of any business based on this model. The primary research seeks to examine the drivers behind the B2B SaaS subscription renewal decision and, in doing so, to explore the recurring revenue framework for the Cloud SaaS business. The research question is: What is the B2B recurring revenue framework for the delivery of SaaS through a Cloud Computing channel? The research includes an examination of the existing software distribution and revenue models and assesses their applicability to the Cloud SaaS provider. The study focuses on the revenue attrition risks inherent in the B2B SaaS business model and proposes a revenue renewal framework where the Cloud SaaS subscription renewal risks are identified such that any patterns or trends in the data will allow the Cloud SaaS service provider to build awareness, and commercial exploitation, of these trends into their business model and planning strategy.