New revenue models for tech products in 2024 and beyond

I've seen more and more discourse about pricing of SaaS/digital products over the past few weeks and months. I see this largely as a byproduct of the significant improvements we've seen in artificial intelligence over the last few years. Namely, for a few reasons:

  1. Decreased costs of development: if products are becoming cheaper and easier to build (due to increased technical abstractions, open source libraries and frameworks and artificial intelligence being used within the development process), then it will affect how much people are willing to pay for them. That won't happen overnight, but will gradually become a factor as new and cheaper products come to the market
  2. Decreased costs of hosting: For example, if I wanted to build a product years ago that required realtime functionality, I would either have to setup my own web socket server to handle these interactions, or I would have had to rely on a platform that manages this, for considerable cost. Nowadays, it comes as part of Supabase, for $25 per month (which also includes a back-end server, a database and more!)
  3. New units of value: most SaaS has had relatively low costs of running the product, regardless of usage, due to low cloud computing costs. That isn't so much the case anymore, where power users of AI-driven platforms can easily consume more in resources than they're paying for. For that reason, we're seeing a shift towards AI platforms adopting a usage-based pricing model, much like products such as Zapier have done for many years.

Here are some examples I'm seeing:

The return of one-time licenses

For those who don't want to pay large amounts for Slack (which become significant as a company scales), the team at 37Signals recently released an alternative where you pay a flat fee and host it yourself. This is much more akin to the old model of software, sold on CD-ROMs.

Introducing ONCE
Once upon a time you owned what you paid for, you controlled what you depended on, and your privacy and security were your own business. We think it’s that time again.

Usage-based pricing

As mentioned above, platforms are more and more using usage-based pricing. Here are some examples:

Plans & Pricing | Zapier
Whether you need simple integrations or complex workflows, Zapier offers secure and reliable automation as you scale. View our pricing plans today.

Intercom charging a price per resolution for AI answers:

Fin resolutions | Help Center
What Fin resolutions are and how they will be measured and charged.
AirOps | Pricing
Deploy task specific AI where you need it most with AirOps Apps. Install and configure in minutes, scalable and available everywhere.

I'll be experimenting with different pricing models for my own products under Positive Sum, and will be writing about the findings/learnings

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