Imagine being able to predict your revenue for the next month or even the entire year with a high degree of accuracy. Not only would this provide you with a considerable sense of relief and stability, but it would also enable you to make strategic investments and take calculated risks that could propel your business growth forward. Enter monthly recurring revenue (MRR), an essential financial metric for any subscription-based business. By effectively managing and growing your MRR, you can unlock greater potential in your company’s future. In this comprehensive guide, we’ll explore what MRR is, its significance in modern industries, how to calculate it correctly, and strategies to enhance MRR while avoiding common pitfalls.
What is Monthly Recurring Revenue (MRR)? #
Monthly recurring revenue represents the monthly predictable income generated from customers who are subscribed to a company’s products or services continuously. Typically associated with subscription-based businesses like Software-as-a-Service (SaaS) providers, streaming platforms, fitness memberships, and online publications—these establishments often rely heavily on their MRR value as an accurate indicator of business health in real time.
Crucial for business evaluation and planning purposes—your company’s ability to estimate near-future earnings enables more informed decision-making regarding customer acquisition costs, sales performance goals, and marketing expense allocations, among other aspects—all aimed at nurturing organizational expansion over time.
Additionally, monthly recurring revenue is significant in determining key metrics such as customer lifetime value (CLTV), unit economics data points, and cash flow projections—acting as foundations for well-formulated growth strategies.
How to Calculate MRR? #
Calculating Monthly Recurring Revenue (MRR) is an essential process for businesses using a subscription-based model, as it helps to gauge your company’s financial performance and growth. Understanding MRR calculation techniques can offer valuable insights into the stability and potential of revenue streams. In this section, we will explore different methods to calculate MRR.
Manual Calculation #
A simple way to determine your MRR is by manually calculating it, especially for small businesses with limited customers or subscription plans. Follow these steps:
- List all active subscriptions and their respective prices.
- Multiply each customer’s billing amount by the number of customers subscribed at that price point.
- Sum up the amounts obtained in step two.
This method might be time-consuming and subject to human errors for businesses with numerous subscription tiers and vast customer bases.
Using the MRR Formula #
For a more systematic approach when dealing with larger datasets, you can rely on the basic MRR formula:
MRR = Total number of customers * Average Revenue Per Customer (ARPC)
Here’s how you can derive ARPC:
- Add the total revenue generated from all paying customers during a specific month.
- Divide this sum by the total number of paying customers.
The result will help you accurately compute your business’s monthly recurring revenue.
Accounting for Complexities #
To better represent variations in subscriptions like upgrades, downgrades, churns, reactivations, or discounts, consider these sub-formulas under the Net New MRR formula:
- Expansion MRR: Additional earnings from existing clients through upselling or cross-selling
- Churned MRR: Loss due to canceled or paused subscriptions
- Reactivation MRR: Resumed or renewed customer payments after prior cancellation
- Net New MRR: Captures overall changes within one month
Combine these sub-categories using this equation:
Net New MRR = (Expansion MRR) – (Churned MRR) + (Reactivation MRR)
Remember that some businesses might have other complexities or unique circumstances that require slight adaptations to these formulas.
Leveraging Tools and Software #
Numerous SaaS platforms offer built-in tools for tracking and calculating your monthly recurring revenue. These technologies seamlessly integrate with payment processes, accurately monitoring sales records while minimizing errors from manual calculations. When utilizing such systems, ensure your chosen platform aligns with your unique business requirements to provide accurate insights into MRR fluctuations.
In conclusion, understanding how to calculate Monthly Recurring Revenue is vital to unlocking your business’s growth potential. By using manual calculation techniques or leveraging sophisticated tools and software solutions, you can attain valuable insights into performance metrics and make informed decisions for future expansion strategies.
MRR Formula #
Understanding the Monthly Recurring Revenue (MRR) formula is crucial to calculating your total MRR and unlocking the potential growth of your business. It provides a clear picture of your company’s predictable revenue stream, vital in making informed decisions for future growth. The essential components involved in the calculation include new MRR, churned MRR, expansion MRR, and contraction MRR. Breaking down each component will help you appreciate their significance in determining your business’s financial health.
New MRR #
New MRR refers to new customers’ monthly recurring revenue within a given period. To calculate it, multiply the new customers by their respective subscription prices. Remember to use only customers who signed up during the specified period.
Churned MRR #
Churned MRR represents the lost monthly recurring revenue due to customer cancellations or downgrades. To compute this figure, subtract the sum of all canceled subscriptions’ pricing from that month’s initial MRR.
Expansion MRR #
Expansion MRR comes from existing customers who have upgraded plans or purchased additional services during a specific month. This type of revenue shows how well you are taking advantage of upselling opportunities and retaining current clientele. Calculating expansion requires adding up the net increase in MRR gained from those upgrades and purchases.
Contraction MRR #
Contraction occurs when existing clients decrease spending with your company—either by switching to lower-tier subscriptions or canceling add-on services. Calculate contraction by tallying the net decrease in revenue arising from these modifications during a given month.
Once you have determined each component value, apply them to the following equation:
Total Monthly Recurring Revenue = (New + Expansion) – (Churned + Contraction)
By incorporating this formula into your regular business evaluation processes, you hone an essential tool for measuring performance and ensuring sustainable success in the competitive SaaS market. Remember to utilize relevant keywords, like “calculate MRR” and “MRR metric,” as they will help your audience easily locate this informative content.
Net New MRR Formula #
Net New Monthly Recurring Revenue (MRR) is a crucial metric in understanding the growth of your business. It provides insights into how much additional, sustainable revenue you generate each month after accounting for expansion, churn, and contraction. In simpler terms, Net New MRR showcases the net effect of new customers, upgrades, downgrades, and lost customers on your monthly revenue.
To calculate Net New MRR from your existing customer base and subscription data, follow this formula:
Net New MRR = (New MRR + Expansion MRR) – (Churned MRR + Contraction MRR)
Let’s break down these components:
- New MRR: This represents the monthly recurring revenue generated by newly acquired customers during a specific period.
- Expansion MRR: Refers to any increase in monthly recurring revenue due to upsells or cross-sells to your existing customer base.
- Churned MRR: The loss of monthly recurring revenue resulting from customers who cancel their subscriptions or cease using your product/service during a given month.
- Contraction MRR: The decline in monthly recurring revenue caused by existing customers downgrading their plans or deactivating add-ons.
Including all four factors in the Net New MRR calculation gives you an accurate picture of gains and losses impacting your monthly recurring revenue over time.
For example:
- If you have $5,000 in New MRR
- An additional $2,000 was generated through the Expansion
- A loss of $1,500 due to Churn
- And another $500 from Contraction
Your final Net New Monthly Recurring Revenue would be:
($5,000 + $2,000) – ($1,500 + $500) = $5,000
A positive value indicates that a business is growing its subscriber base and effectively using upselling and cross-selling tactics. On the other hand, a negative Net New MRR can signify issues with customer retention or inadequate product pricing.
Tracking your Net New MRR allows you to identify trends and strategically decide on marketing spend, sales efforts, and churn prevention. Moreover, it helps set realistic revenue projections and achieve sustainable business growth.
Types of MRR #
Monthly recurring revenue (MRR) can be broken down into several subcategories, each representing a vital aspect of your business’s financial health. When analyzing MRR, it’s essential to consider the different types and how they contribute to your company’s overall growth. Here, we will discuss five main types of MRR: New MRR, Expansion MRR, Contraction MRR, Churned MRR, and Reactivation MRR.
New MRR #
New Monthly Recurring Revenue comes from newly acquired customers who have started paying for your product or service during a specific time frame. This type of MRR is an essential factor in determining the success of your customer acquisition strategy. It is directly related to your marketing and sales efforts. A steady increase in new MRR indicates you successfully attract new clients.
Expansion M- R -R #
Expansion Monthly Recurring Revenue refers to the additional revenue generated from existing customers over time through upgrades, add-ons, or increased usage. The expansion indicates that your current customers see great value in your offerings and are willing to invest more—ensuring higher customer satisfaction levels and organic growth.
Contraction M-R-R #
Contraction Monthly Recurring Revenue results from a loss in revenue due to customer downgrades or reduced usage of your services within a reporting period. Often seen as a warning sign, contraction means that some customers might not find enough value in certain aspects of your product or service—a valuable insight when optimizing offerings toward customer satisfaction.
Churned-M-R-R #
Churned Monthly Recurring Revenue represents the lost revenue from customers who cancel their subscriptions within a given period. High churn rates may indicate issues with the product or its pricing strategy. Keeping this type of MRR low is crucial for long-term business growth.
Reactivation-M-R-R #
Finally, Reactivation Monthly Recurring Revenue comes from returning customers who previously canceled their subscriptions but later resubscribed. Monitoring Reactivation MRR allows you to assess the effectiveness of your re-engagement and customer win-back strategies.
Understanding and tracking these types of MRR will equip you with essential insights for making data-driven decisions when adjusting your pricing, upselling efforts, or customer success initiatives. Monitor trends across multiple MRR types to unlock your business’s true growth potential and maintain a solid foundation in the competitive market.
Plans as a Percentage of Total MRR #
When analyzing your monthly recurring revenue (MRR), it’s essential to consider the contribution of each plan type to your overall earnings. By calculating the percentage distribution of revenues across various plans, you gain valuable insights into which plans are most successful and how they influence your company’s growth trajectory. In this section, I will discuss why breaking down MRR by the plan is crucial and outline a method for determining the percentage contribution of each plan.
Why It Matters #
Evaluating each plan as a percentage of total MRR can reveal vital information about the performance and profitability of your subscription-based business model. Some benefits of understanding this distribution include the following:
- Identifying the most popular plans: Gaining insight into which pricing tiers or offerings bring in the highest percentage of revenue helps you focus on optimizing those that yield better results.
- Allocating resources efficiently: Knowing which plans contribute more to monthly revenue allows you to allocate marketing or customer support efforts accordingly, yielding better ROI.
- Detecting issues with underperforming plans: Comparing percentages across different tiers may highlight discrepancies or inefficiencies that merit further investigation and rectification.
Calculating Plan Percentages #
To determine individual plan contributions, follow these steps:
- Calculate MRR for each plan: Utilize the primary MRR formula – multiplying monthly subscribers by their respective subscription fees for every tier offered.
- Sum up all individual MRRs: Combine calculated values from step 1 to reach your total monthly recurring revenue figure.
- Divide each plan’s MRR by the total MRR: Perform this calculation for every tier to find its percent share within overall earnings.
For instance, your business offers three subscription models- Basic, Pro, and Enterprise- with distinct monthly subscriber numbers and costs per user. After reaching their individual MRR figures and adding them together for a comprehensive total, you can quickly determine the percent contribution of each plan toward overall MRR.
Remember that regular evaluations of plan contributions to total MRR facilitate data-driven decision-making and ongoing business growth. Regularly analyzing and acting upon such information bolsters your ability to adapt pricing strategies, improve customer acquisition efforts, and optimize resource allocation for maximum impact. Ultimately, understanding plans as a percentage of total MRR lends significant insight into unlocking your company’s potential for revenue expansion and long-term success.
Trends in MRR #
In today’s competitive business landscape, keeping a close eye on the latest monthly recurring revenue (MRR) trends is crucial for unlocking sustainable growth. You can make informed decisions to drive your company forward by consistently observing and analyzing these patterns. This section will explore some of the most prominent MRR trends within various industries, particularly SaaS companies, which heavily rely on this metric.
Shift Towards Subscription-Based Business Models #
The steady rise in subscription-based businesses has led to an increased focus on MRR as one of the key performance indicators (KPIs). More companies are monetizing using recurring revenue models to create predictable cash flows and better customer retention rates. As a result, staying updated on how these evolving models impact, MRR has become vital.
Emergence of Usage-Based Pricing Models #
Although traditional tiered pricing plans have merits, many businesses are adopting usage-based pricing strategies. By aligning value delivery with consumer needs, usage-based models enable organizations to capitalize on customers’ varying demands while maintaining control over their MRR. Therefore, understanding how such changes impact monthly revenue calculations is essential for accurate financial forecasting.
Focus on Customer Churn Management #
Minimizing customer churn plays a significant role in maintaining stable and growing MRR figures. Some top SaaS companies employ proactive measures such as:
- Segmenting customers based on risk factors.
- Leveraging data analytics for personalized interventions.
- Offering flexible payment options.
- Prioritizing customer success management initiatives.
Effectively tracking these efforts helps identify potential areas for improvement or weaknesses that could negatively influence MRR growth rates.
Growing Importance of Expansion Revenue #
Capturing expansion revenue through upsells and cross-sells has become more critical than ever to boost MRR without relying solely on new customer acquisitions. Companies are aggressively identifying opportunities within existing client bases and leveraging strategic add-ons or upgrades to unlock the untapped potential of these relationships. Monitoring MRR components related to expansion revenue can offer valuable insights into business growth trends and future opportunities for maximizing revenue.
As businesses evolve, so do the trends and factors influencing MRR. By keeping a close watch on new developments and continually aligning your company’s strategies accordingly, you’ll be better equipped to unlock sustainable business growth. Understanding any discrepancies in calculating MMR is equally important, as they can lead to inaccurate financial planning and hinder your company’s progress. Stay agile, adapt, and thrive by staying up-to-date with the ever-changing world of monthly recurring revenue.
How to Grow MRR? #
Growing your monthly recurring revenue (MRR) is essential for building a sustainable and profitable business. Increased MRR facilitates smooth operations and better decision-making and drives long-term success. To ensure that your organization can achieve its growth goals, it’s crucial to employ the right strategies tailored to suit your needs.
Here we will discuss several practical methods that can help boost your MRR:
Charge More #
One of the simplest ways to grow MRR is by increasing your prices.
- Re-evaluate your pricing structure: Your current pricing may need to adequately reflect the value you provide customers or cover operational costs.
- Invest in product development: Enhance your services’ quality, features, or other aspects so customers are willing to pay more for what you offer.
- Offer premium plans: Provide higher-tiered packages with added benefits catering to users who need advanced capabilities.
- Analyze customer segments: Determine which customer groups have higher demand elasticity and adjust prices accordingly.
Remember that charging more should always be supported by delivering enhanced value and aligning with market trends.
Upsells #
Upselling encourages existing clients to purchase additional products or upgrade their plans. It brings added value that results in increased revenue without needing new customers. To successfully upsell:
- Identify key opportunities: Leverage customer data and usage patterns for identifying potential upselling prospects.
- Focus on client lifecycle stages: Target upsell campaigns during peak engagement periods, such as after successful onboarding.
- Provide personalized recommendations: Tailor upselling offerings based on individual client needs and preferences.
- Educate customers about benefits and functionality enhancements associated with upgrading their subscriptions.
By effectively employing these tactics within an upselling strategy, businesses gain the opportunity to boost MRR meaningfully.
Get Rid of Your Free Plan #
While free plans can attract many customers initially, they often need to generate adequate MRR for your business.
- Optimize the freemium model: Limit the scope of features and usage a free plan may provide, encouraging users to upgrade.
- Offer temporary trials: Implement limited-time trial periods, which automatically convert to paid subscriptions upon expiration.
- Facilitate smooth transition: Support users with excellent resources and customer service during decision-making.
By removing or optimizing free plans and focusing more on monetized options, businesses can accelerate growth in MRR considerably.
Remove a “Maximum” Price/Unlimited #
Offering unlimited access or services at a maximum price limit often restricts potential revenue generation when customers require additional features or capabilities.
- Establish tiered pricing models: Replace “unlimited” offers with various pricing levels that cater to different needs while increasing revenue per user.
- Granularize feature offerings: Break down aspects of the product into smaller units purchasable separately (pay-as-you-go) instead of imposing one all-encompassing cost cap.
- Review high-demand functionalities: Determine segmented functionality capable of higher fees based on market value perception.
Removing the limitation of a maximum price or unlimited offering allows you increased flexibility in generating additional income streams and boosting MRR accordingly.
Common Mistakes When Calculating MRR #
As crucial as it is to track your monthly recurring revenue accurately, businesses may encounter some common pitfalls in the process. Avoiding these mistakes will ensure a more precise understanding of your company’s financial health and stability. This section will outline six errors that can occur while measuring MRR.
Incorrectly Accounting for Non-Monthly Billing Intervals #
One common error is failing to correctly align non-monthly billing periods with the calculation of monthly recurring revenue.
For example, if a customer subscribes to an annual plan, dividing their payment by 12 ensures accurate representation within your MRR calculations. Simply including the full amount for the year as part of your “Mr.” metric would lead to inaccurate and inflated data. Always prorate amounts based on subscription intervals when calculating MRR.
Including Non-Recurring Revenue #
Another mistake arises from incorporating non-recurring revenue sources into your monthly revenue formula. You should only include revenues specific to recurring subscriptions in your calculations – not one-time sales or other non-subscription transactions.
Unique purchases or incidental fees collected from customers (e.g., equipment purchases, setup costs) should be excluded from your “monthly revenue” figures to maintain accuracy.
Treating MRR as an Accounting Figure #
MRR is a valuable performance metric, assisting with goal setting and future projections. However, it should not replace standard accounting practices or protocols.
Consider treating monthly recurring revenue separately from official accounting figures such as statements of income or balance sheets. Aligning the two may yield inaccurate reports hindering potential business growth opportunities.
Including Leads and Trials #
Optimism over gaining new customers tempts you to include leads and trial users in your MRR calculations. Resist the urge; only count paying subscribers in this context. Including leads and trials in your, MRR inflates numbers upward but does not accurately reflect your stable customer base.
Ignoring MRR Components #
MRR analysis is most valuable when broken down into components such as new revenue, expansion/upgrade revenue, churned customers, and contraction/downgrade revenue. With this comprehensive view, you can better assess the dynamics of your performance and opportunities for future growth. Focusing solely on “net new MRR” without proper attention to individual components may restrict valuable insights for optimizing your business strategy.
Ignoring Coupons & Discounts #
In calculating MRR, remember to account for any promotional discounts or coupons applied. If a significant portion of your customers enjoys reduced prices, paying attention to these factors could lead to incorrect estimates of monthly recurring revenue.
For instance, if a customer receives a 50% discount during their first three months before transitioning to standard pricing, ensure that your MRR metric accurately reflects this by only including the discounted amount in those initial months’ calculations.
By keeping these common mistakes in mind during your MRR evaluation process, you will maintain precision while gaining a more holistic understanding of your business’s financial stability and potential for growth.
MRR FAQs #
In this section, we will address some frequently asked questions about monthly recurring revenue (MRR), a vital metric for businesses with subscription-based models. Understanding the concept of MRR and implementing it correctly in your business strategy can play a pivotal role in ensuring growth.
What Does MRR Stand For? #
MRR stands for Monthly Recurring Revenue, denoting the company’s predictable monthly income through subscriptions or other recurring payments. The purpose of tracking MRR lies in providing insight into customer growth trends and helping businesses forecast their future finances more accurately. This enables companies to make well-informed decisions concerning product pricing, marketing campaigns, and resource allocation.
What is an MRR Quota? #
An MRR quota refers to the specific amount of new MRR generated within a given period, often set as an objective for sales teams. Meeting or exceeding these quotas indicates progress towards achieving overall business goals, while falling short may warrant review and adjustment of strategies. By setting clear expectations through an MRR quota, sales professionals gain motivation and focus on the right activities to maximize revenue generation.
Why is Monthly Recurring Revenue Important for Our Business? #
Monthly recurring revenue is crucial for businesses because of it:
- Enables accurate forecasting: With reliable forecasts, you can plan better for expenses, hiring decisions, and business expansion.
- Improves cash flow: Predictable cash inflows are essential for sustaining operations smoothly long-term.
- Maximizes value: Stable revenue streams attract investors as they demonstrate sustainable business models.
- Highlights performance trends: Tracking changes in your M- helps identify upselling opportunities or areas needing improvement.
- Reduces churn rates: Maximizing recurring revenue promotes greater customer retention due to enhanced satisfaction levels.
How to Project Monthly Recurring Revenue? #
Projecting monthly recurring revenue involves analyzing historical data alongside ongoing trends within customer behavior patterns and market dynamics. To create accurate projections, take into account factors like:
- Existing MRR: Analyze your monthly recurring revenue levels and consider the year-over-year growth rate.
- Churn rates: Estimate the percentage of customers who cancel subscriptions in a given time period.
- Expansion revenue: Identify opportunities for upselling or additional services to existing clients.
- Customer acquisition cost (CAC): Evaluate how much it costs to secure new clients and if this can be improved through targeted marketing or sales strategies.
How to Set Monthly Recurring Revenue Goals? #
Setting appropriate MRR goals is essential for driving business growth, as too low targets lead to stagnation. In contrast, overly ambitious ones might result in burnout. Here are some steps to follow when setting achievable MRR targets:
- Begin with historical data analysis: Review past performances and trends within your industry to determine reasonable benchmarks.
- Establish short-term & long-term goals: Divide larger annual goals into manageable monthly targets that can reflect immediate action plans.
- Consider market conditions: Account for any potential changes in customer demands or competitive landscapes influencing your target audience’s needs.
- Employ SMART criteria: Ensure your objectives are Specific, Measurable, Achievable, Relevant, and Time-bound for maximum clarity and alignment across teams.
By addressing these questions on monthly recurring revenue, you can ensure a comprehensive understanding of this key metric and its importance within strategic decision-making processes for businesses employing subscription-based models.
Keep MRR Top of Mind with Baremetrics #
Baremetrics is a powerful analytics tool designed to help businesses, especially those in the SaaS industry, track their monthly recurring revenue and other key performance indicators (KPIs). By using Baremetrics, you can effectively keep your MRR in mind and make data-driven decisions for better business growth. In this section, I will delve into some features that make Baremetrics an essential resource in managing your company’s MRR.
Comprehensive Insights and Reporting #
Baremetrics provides an all-in-one dashboard that offers valuable insights into various aspects of your business, such as how much MRR you have generated over time, while simplifying the calculation process. This allows you to visualize trends better, identify growth opportunities, and address challenges. Furthermore, it assists in monitoring saas more progress—granting a more detailed analysis of customer behaviors.
Real-time Monitoring and Alerts #
One of Baremetics’ standout features is its ability to provide real-time updates on crucial metrics like MRR changes. This feature lets businesses stay current with their financial health by sending notifications when significant fluctuations occur or predefined targets are met. Consequently, keeping updated with these alerts helps in addressing potential risks promptly.
Forecasting and Goal Setting #
Understanding where your business stands today is essential, but having foresight into future performance holds equal importance. With Baremetric’s forecasting functionality at your disposal, projecting both short-term and long-term monthly revenue enables superior strategizing when setting goals for business growth.
Integration with Payment Processors #
A major challenge for many companies arises when they need to extract relevant information seamlessly from different payment platforms to calculate more accurately. Fortunately, Baremetrics addresses this concern by integrating directly with popular payment processors like Stripe or Braintree—improving efficiency through centralized tracking.
By incorporating Baremetrics into your daily operations, maintaining an accurate representation of your monthly recurring revenue becomes a manageable task. This empowers you as a decision-maker to effectively set and pursue the KPI-based goals, which ultimately contribute to scalable business growth.
What is a Good MRR Rate in the SaaS Industry? #
Understanding the acceptable MRR rate can help businesses within the Software as a Service (SaaS) industry gauge their performance and align it with industry standards. Since monthly recurring revenue is an essential metric for assessing your business’s financial health, knowing what constitutes a good MRR rate is crucial.
Benchmarks for Success #
Although there isn’t a one-size-fits-all answer to this question, various benchmarks can be used as reference points:
- Retention Rates: A satisfactory churn rate should range between 3% and 7% annually. Lower rates indicate higher customer satisfaction, which could boost your SaaS MRR.
- Growth Rates: Aim for a year-over-year growth rate of at least 20%. This ambitious target motivates constant improvements in both product offerings and marketing efforts.
- Expansion Revenue: In a healthy SaaS company, expansion revenue should account for about 30% of total MRR growth. This number successfully upsells current customers through added features or upgraded plans.
Relativity Matters #
It’s worth noting that these benchmark figures are relative to your particular situation:
- Size: Larger companies enjoy consistently high growth rates due to more substantial resources; smaller companies may achieve faster growth percentages due to fewer existing subscribers.
- Business Stage: Younger companies may witness fluctuating SaaS MRRs during the early stages of development. Consequently, comparing initial results to mature firms could skew expectations.
- Industry Niche: Different market sectors possess unique demands and client bases; therefore, direct comparisons may not provide accurate representations.
Continuous Improvement #
Rather than fixating on specific numbers, focus on continuous improvement when tracking your SaaS MRR. By monitoring and maximizing retention rates while minimizing churn levels, you will progress toward improving your overall monthly recurring revenue.
To conclude, determining a good MRR rate in the SaaS industry is influenced by numerous contributing factors that vary from one company to another. Utilize established benchmarks as guidelines, but customize your approach based on your unique business’s context and growth stage. Engage in continuous improvement strategies to ensure long-term success and stability within the competitive world of Software as a Service.