Business softwares companies are moving to the cloud space to reduce infrastructure costs and ease accessibility to the users in the long run. Such softwares are coined as SaaS products that can be accessed from anywhere under the sun. Such softwares have become a trend and follow a subscription model to keep the business running. Because of the industry explosion, it is important to understand the strategies used by such companies to attract loyal customers as every SaaS product has an equivalent competition. This study talks about the freemium strategy adopted by the companies and the factors that make customers move from the free version to the paid version. This study demonstrates service encounters with and without incidents that is considered as a subset of relationship marketing. Research has been done using qualitative and quantitative methods that highlights a general customer tendency towards a service like this and the service provider to understand their lookout while designing and selling such a service.