What if your legacy model was billing on storage but storage has become commoditized? If you switch to subscription based on access to feature sets, how do you migrate legacy customers without losing money?
I am unclear why you need to lose money at all, especially if you have clients that are already telling you what they are willing to pay. If your clients are paying a certain amount for the service, this might be a good place to start with your pricing strategy for the next generation product, regardless of what the billable unit is behind the scenes.
The main consideration is that your clients now understand what they are paying for; storage. If you move them away from that, even if they are paying the same amount, they might not understand. This will drive some SaaS Vendors in your situation to lower their price, but in reality that is not the right thing to do. Even though they are currently “paying for storage,” what they are actually paying for is the value-added service you provide on top of the storage. Your goal is to remind them of that so that when you change the underlying billable unit, your clients are comfortable with that change. Done correctly, you could charge more for your service because you are not selling storage (a commodity) anymore, but are now selling your value-added service (the keyword there is VALUE) even though ultimately nothing has really changed.
Every situation is different and it is difficult to offer any real guidance without knowing more.
Author: Lincoln Murphy (@lincolnmurphy on Twitter)