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Research Report

The Role of Market Segmentation in XaaS

B2B technology providers must actively and effectively counter the three trends of technology commoditization, consumption economics, and unprofitable subscription business models. 

Designing successful products and services, creating solutions, and pricing those solutions requires a deep understanding of customer use cases, their operating environment, what they value, their behavioral characteristics, and their role in achieving a desired outcome, i.e., "the problem space." Designing with this deep problem space understanding is more likely to result in optimal offer-market fit.

To achieve optimal offer-market fit, technology providers must conduct effective market segmentation. TSIA  has identified a strong correlation between solutions targeted at specific vertical market segments and profitability. 

This paper offers an introduction to the role of market segmentation in XaaS strategies and offers rationale for segmentation as part of effective XaaS offer development.

Authored By:

Laura Fay

Vice President, XaaS Product Management, TSIA

Publish Date: May 17, 2023

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Peg Rodarmel, SVP, Subscription Services, Infor

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