Top SaaS Business Models: What’s Working (and Why)

Introduction 

According to BillingPlatform, the global software-as-a-service (SaaS) market is expected to reach $720.44 billion by 2028. However, growth doesn’t guarantee profitability, as not all SaaS businesses can scale sustainably.   

The real differentiator? The business model. 

For founders, operators, and product teams, choosing the right SaaS business model is more than a pricing choice. It defines how customers experience your product, how revenue scales, and how sticky your solution becomes.  

In this guide, we’ll break down the most successful SaaS business models, from usage-based to freemium, platform plays, vertical SaaS, and everything in between. We’ll look at what they are, why they work, and where each one fits depending on product type, market, and usage. Whether you’re pre-product or post-IPO, understanding these models can help you refine your pricing, GTM strategy, and product roadmap. 

Core SaaS Business Models are as discussed. 

Top SaaS Business Models That Work 

These business models have proven their effectiveness in driving sustainable growth, maximizing customer value, and adapting to evolving market needs. Understanding their key features can help SaaS founders and product teams choose the right strategy to scale revenue and increase customer retention. They represent a foundation of strategic pricing and delivery methods that consistently deliver results in diverse SaaS markets. 

Subscription-Based Model: The Evergreen Classic 

The subscription-based SaaS model remains the most common for a good reason. Customers pay a recurring fee (monthly, quarterly, or annually) to access your platform. 

Why it works: 

• Predictable recurring revenue (MRR) 

• Strong customer retention with long-term contracts 

• Simple pricing tiers make onboarding easy 

Common examples: 

• Netflix (entertainment) 

• Adobe Creative Cloud (design tools) 

• Salesforce (CRM)  

But here’s the catch: in a saturated market, subscription fatigue is real. SaaS founders are increasingly combining subscriptions with other models for more flexibility. 

2. Freemium Model: Win First, Monetize Later 

The freemium model offers a basic version of the product for free while charging for advanced features or enterprise use. 

Why it works: 

• Attracts a large user base quickly 

• Let users experience value before they buy 

• Ideal for virality and product-led growth (PLG) 

But watch out: 

• Conversion rates from free to paid often hover around 2–5% 

• Needs a clear upgrade path and compelling premium features 

Examples: 

• Slack 

• Grammarly 

• Zoom 

3. Usage-Based (Pay-As-You-Go): The Flexible Favourite 

Instead of flat fees, users are billed based on actual usage, whether it’s API calls, data processed, or minutes consumed. 

Why it’s trending: 

• Scales with customer success 

• Appeals to startups wary of large upfront costs 

• Reduces churn when value aligns with spend 

Examples: 

• Snowflake (data warehousing) 

• Twilio (communications APIs) 

Usage-based pricing is particularly powerful in developer-focused and API-driven SaaS products. 

4. Tiered Pricing Model: One Size Doesn’t Fit All 

Tiered pricing offers multiple packages (Basic, Pro, Enterprise), each with different features, limits, or support levels. 

Why it works: 

• Serves different personas and budgets 

• Drives upsells as customers grow 

• Encourages value-based differentiation 

Most SaaS companies today adopt some form of tiered pricing, even when combining it with freemium or usage-based models. 

Examples: 

• Mailchimp 

• HubSpot 

5. Per-User Pricing: Best for Team-Based Tools 

Users are charged based on the number of seats or licenses. 

Why it works: 

• Easy to forecast revenue 

• Aligns with company size and usage 

• Encourages team adoption 

Caveats: 

• Companies might share logins to cut costs. 

• Doesn’t scale well with AI-based or usage-heavy tools 

Examples: 

• Canva 

• HubSpot 

• Atlassian 

6. AI SaaS Business Models: The Future of Smart Software Delivery 

AI is no longer a bonus; it’s at the heart of many SaaS products. From customer support copilots to intelligent automation, AI SaaS business models are unlocking new ways to create and capture value. 

Here’s how AI is reshaping SaaS business strategy: 

• Personalized pricing: AI tailors pricing recommendations in real time based on usage patterns and user behaviour. 

• Value-based billing: Platforms charge based on business outcomes (e.g., leads generated or tasks automated), not just features. 

• AI-as-a-service: Modular AI engines (e.g., recommendation systems or fraud detection) are sold as components inside a broader SaaS offering. 

Emerging trend: 

As AI adoption increases, expect to see hybrid pricing usage-based models with AI-specific surcharges or performance-driven tiers. 

Examples: 

• Jasper (AI copywriting) 

• Fireflies (AI meeting assistant) 

• Gong (AI-powered sales insights) 

AI SaaS business models are not just buzz; they’re redefining what customers are willing to pay for and how platforms prove their ROI. 

7. Transaction-Based Pricing: When You Drive Revenue for Others 

In this model, the SaaS platform earns a cut every time a user conducts a transaction, like selling a product or processing a payment. 

Great for: 

• Marketplaces 

• Fintech platforms 

• E-commerce SaaS 

Examples: 

• Shopify 

• Etsy 

• Toast 

This model works well when your platform directly enables business transactions or monetizes user activity. 

8. Hybrid Models: Built for Modern SaaS 

2025 is the year of hybrid SaaS models. The most successful SaaS companies are blending multiple pricing strategies to serve diverse audiences. 

Example combo models: 

• Freemium + Usage-Based (e.g., Zapier) 

• Subscription + AI-Based Surcharges (e.g., Gong) 

• Tiered + Per-User (e.g., ClickUp) 

The key? Align pricing with perceived value and the growth stage of the customer. 

Choosing the Right SaaS Model to Maximize Growth 

There’s no one-size-fits-all answer. 

Ask yourself: 

• Is your product usage-heavy or outcome-driven? 

• Are you selling to SMBs, enterprises, or both? 

• How do your users define “value”? 

If you’re building or scaling a SaaS product, especially with AI in the mix, your business model is not just a pricing tool; it’s a growth lever. 

Turning Strategy into Results with Fortunesoft 

Choosing the right SaaS business model is only half the battle. From designing subscription frameworks to implementing AI-driven pricing or hybrid models, execution is what drives growth. Fortunesoft, a leading SaaS development company, helps founders and product leaders not just pick a model, but scale it for revenue, retention, and long-term profitability. Whether you’re pre-product, post-launch, or expanding globally, Fortunesoft turns SaaS strategy into measurable results.  

Final Takeaway: Adapt or Get Left Behind 

The SaaS business model landscape is more dynamic than ever. Subscription may still rule, but AI-driven monetization, outcome-based billing, and hybrid models are changing the game. 

• Align your pricing with value 

• Use AI to enhance personalization and automation 

• Stay agile, your business model should evolve with your customers 

Want expert help to build or scale your SaaS platform? 

Let’s Talk SaaS Strategy