Three things on AI pricing in software
Over the past year, we've spoken to more than 100 software providers and their customers. Three things stand out.
At CIL, our Technology practice works with software providers and their customers to understand how AI is reshaping value, cost and pricing. Over the past year, we've spoken to more than 100 software providers and their customers. Three things stand out.
Why software pricing is under pressure
AI is reshaping how software value is created, delivered and monetised. Traditional seat-based models are coming under pressure as vendors seek sustainable growth and customers demand clearer links between cost and value. The question is no longer whether pricing will evolve, but how quickly businesses can adapt without creating friction for customers or investors.
1. Build a responsive pricing capability
AI products, customer expectations and commercial models are evolving rapidly. Software providers need pricing capabilities that can adapt alongside them. Value and cost are both moving targets, making regular reassessment of pricing, packaging and value metrics increasingly important.
2. Keep pricing simple as the model gets more complex
As APIs, workflows and AI model selection become more sophisticated behind the scenes, pricing needs to remain easy for customers to understand. Many software providers are exploring hybrid pricing models that combine consumption-based and outcome-based elements while maintaining simplicity for customers.
3. Introduce monetisation in phases
Customers accustomed to predictable, seat-based pricing can be hesitant to adopt models that introduce variable costs. Many providers are therefore taking a phased approach to AI monetisation, prioritising adoption and learning before introducing more sophisticated pricing structures. This allows businesses to build customer confidence, understand usage patterns and reduce commercial risk as models evolve.
AI is pushing software pricing beyond the traditional seat-based model. Providers that can adapt quickly, while maintaining simplicity and customer trust, will be best placed to monetise effectively while keeping adoption on track.
To discuss how AI is reshaping software pricing and what it could mean for your business, please get in touch.
