Redefining Enterprise Software Pricing for Strategic Impact
Ashish Nayyar is a strategic leader in Product Pricing and Commercial Excellence with extensive global experience in enterprise software and SaaS. Renowned for pioneering value-based and deal pricing, he drives revenue growth, market competitiveness, and customer value by aligning pricing strategies with measurable business impact across global operations.
In this article, Ashish Nayyar shares his innovative philosophy and value-based strategies that have redefined enterprise software pricing models.
In the world of enterprise software, pricing has long been seen as a support function, largely focused on setting rates, approving discounts, and ensuring financial compliance. However, seasoned value-based pricing leaders in the enterprise software space are challenging this traditional view. Across leadership roles in major organizations, pricing has been transformed into a critical business enabler, directly impacting top-line growth, bottom-line profitability, and customer success.
By shifting pricing conversations from cost structures to measurable business impact, pricing is increasingly positioned as a strategic lever not just for revenue optimization but for market leadership and long-term success. Modern approaches focus on quantifying the business outcomes software delivers, ensuring that pricing reflects its role as a driver of operational efficiency, risk reduction, and revenue expansion for customers. Pioneering work in value-based pricing has helped organizations monetize their products more effectively while reshaping how software companies think about customer value and competitive advantage.
In enterprise software, the right pricing model isn’t just about setting a number; it’s about ensuring customers perceive, realize, and pay for the value they receive.
The Traditional View of Pricing and Why It’s No Longer Enough
Historically, enterprise software pricing has relied on one of two models: cost-plus pricing, where a standard markup is added to development costs, or competitor-based pricing, where software is priced based on industry norms. While both methods provide structure, they fail to capture the true economic value software delivers.
A value-driven pricing approach ensures that pricing reflects the tangible business impact customers experience, whether through increased efficiency, reduced risk, or higher profitability. When pricing is aligned with value, companies can enhance customer trust, improve revenue predictability, and drive sustainable business growth.
Transforming Pricing into a Growth Function
One notable transformation occurred in the restructuring of Annual Maintenance Contract (AMC) pricing. Traditionally, AMCs were priced as a flat percentage of license fees, without considering the evolving value software delivered over time. A multi-dimensional pricing engine was introduced to restructure AMCs based on factors like usage, business impact, and cost savings generated for customers. The result was a 66% revenue increase and a 368% profit growth over two fiscal years.
Customers, rather than resisting higher fees, appreciated the clarity in how pricing mapped to the value received.
Enterprise connectivity pricing was also transformed from a one-size-fits-all structure to a differentiated pricing model based on business segment, value-added services, and competitive positioning. This approach protected margins in a price-sensitive market while enhancing customer adoption and retention.
Key Learnings for Enterprise Software Leaders
Four critical lessons have emerged for software companies looking to elevate pricing from a support function to a strategic business driver:
Adopt a Pricing Mindset That Captures Customer Value: A successful pricing model goes beyond cost and competitive benchmarks and must be tied to the real business advantage the software delivers to customers. By designing pricing that reflects clear business advantages, software companies can move away from transactional pricing and focus on pricing as a reflection of customer success.
Move Pricing Discussions from Cost to ROI: Pricing should be framed around the return on investment (ROI) it delivers. If a software solution reduces operational time or increases efficiency, pricing discussions should focus on the financial and operational benefits gained rather than just licensing costs. ROI-driven pricing transforms customer perception, making software a strategic investment rather than an expense.
Ashish Nayyar, says, “ROI-driven pricing isn’t just a sales tactic, it’s a fundamental shift in how customers perceive software purchases. When customers see a clear path to measurable returns, pricing becomes a strategic investment rather than a cost”.
Build Internal Business Cases for Pricing Innovation: Internal alignment is critical when transitioning to value-based pricing. Data-backed business cases demonstrate how pricing strategies impact revenue, customer lifetime value, and competitive positioning. Ensuring that sales, product, and finance teams understand pricing as a growth function is essential for successful implementation.
Differentiate Pricing Through Competitive Positioning: Pricing should define the product’s unique value proposition, avoiding commoditization. Instead of discounting to match competitors, companies should highlight premium features, higher uptime, or better support models to justify higher price points. Effective pricing strategies protect margins and reinforce product superiority.
“The best pricing strategies don’t just protect margins they actively reinforce why your product is better than the competition”, Nayyar notes.
Navigating Pricing amid Global Economic Uncertainty
Global economic developments, such as increased tariffs on key imports, have amplified the need for agile, value-centric pricing strategies. Enterprise software companies operating across markets must consider how macroeconomic shifts affect customer cost structures, procurement behavior, and perceived value.
In such volatile environments, pricing acts not just as a revenue lever but also as a stabilizing force that reflects market realities while reinforcing customer value. Well-structured, value-based pricing models demonstrate ROI clearly, helping software vendors remain relevant and resilient in uncertain times.
The Future of Enterprise Software Pricing
AI-driven pricing models and predictive analytics are expected to play a larger role in dynamic, customer-centric pricing. AI can analyze historical usage data, customer behavior, and competitive benchmarks to recommend real-time pricing adjustments.
However, technology alone cannot transform pricing. The core principle remains unchanged: pricing must reflect value. While AI increases precision and agility, the foundation of great pricing still rests on understanding customer impact.
Also Read: How Digital Exams Make Lost Answer Sheets a Thing of the Past
Final Thoughts: The Pricing Function as a CEO-Level Priority
For enterprise software companies, pricing is no longer just an operational function; it has become a CEO-level imperative. Companies that embrace value-based pricing unlock higher revenues, stronger customer relationships, better product innovation, and long-term business resilience.
By integrating pricing into strategic decision-making, software firms can move beyond revenue management and turn pricing into a powerful driver of growth, differentiation, and customer success. The focus is no longer on whether pricing should be strategic but on how quickly companies adopt it.
The question is no longer whether pricing should be strategic but how soon companies will act on it.
