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Unlocking the Complexity of Billing in SaaS

One of the core tenets of SaaS is to be able to meter tenant usage and then bill your customers. However, there are a lot of challenges in handling that.

Challenges in Building SaaS Billing

By far the most consistent area of focus I’ve had in my career is monitoring and observability. Way back in 2005 while at Orbitz, I had the opportunity to learn from and work alongside Chris Davis, the original author of Graphite. It was an enormous success both at Orbitz and within the industry as a whole, and it’s been an honor and privilege to essentially ride that initial wave of monitoring innovation my whole career.

6 years later, another adjacent area emerged as my second-most common area of focus, and that is the collection of specific metrics used to quantify end-user usage, which are typically used to generate the bills for SaaS companies which have any sort of pay-per-use cost dimensions. Even including Omnistrate, I’ve now had direct involvement with the design and development of the metrics systems and/or billing integrations for the past 5 companies I’ve worked at over the past decade, and it’s incredible to me how similar the problems and solutions have been even when the industry or design of each business’ technical architecture has been so different from each other.

In today’s post I’d like to explore the internal complexities of SaaS billing systems and what challenges and design patterns for addressing them keep showing up. Hopefully by the end of this you’ll have a better understanding of how SaaS billing works and a blueprint for how to go about implementing it yourself if you need to.