Pricing is complex in general, but for SaaS companies even more so. Enterprise SaaS companies spend a lot of resources to acquire customers. Annual billing to a large extent helps offset these costs. However a question remains:
How does a new unfunded SaaS company acquire customers, when annual billing can be a big obstacle for sign ups?
You remove as many barriers to the purchase as possible. Allow monthly credit card billing, but incentivize longer term payments. For example, PivotalTracker.com charges monthly. However, I personally paid them for an entire year to get the 2 month discount! 12 months for the price of 10 months is enough encouragement for me to pay for the entire year.
