For over two decades, the Software-as-a-Service (SaaS) model has dominated the tech industry, including Sales and Marketing Technology. Businesses of all sizes have become accustomed to paying monthly or annual subscriptions for cloud-based software, making predictable revenue streams the holy grail for investors and entrepreneurs alike.
But this model, which once revolutionized software delivery, is now under serious threat.
AI is changing everything. And one of the biggest disruptions is coming to pricing.
The Shift from Subscription to Usage-Based Pricing
The traditional SaaS model relies on flat, recurring fees. Companies like Salesforce, HubSpot, and Zoom have built empires by charging customers a fixed rate, often per seat, regardless of how much value each user derives.
But AI-powered software doesn’t fit neatly into this mold. AI applications—whether for sales, marketing, customer support, or data analytics—consume significant computational resources. They scale dynamically, and their value fluctuates based on how much they’re used.
Instead of asking users to pay $50 per month for a seat, AI-driven platforms are moving towards a consumption-based model, where customers pay for what they actually use—whether it’s API calls, data processing, or AI-generated outputs. Companies like OpenAI, Amazon Bedrock, and other AI-first platforms already price their services this way.
This shift isn’t just a preference—it’s an inevitability.
Why AI Kills the SaaS Pricing Model
Cost Alignment with Value
AI-powered services often provide fluctuating levels of value to different users. A salesperson who uses AI to summarize one email per day doesn’t generate the same value as another who has AI analyzing hundreds of leads. Usage-based pricing ensures customers only pay for the value they extract, making software adoption more appealing.
Elimination of SaaS Bloat
Today, companies waste billions on unused SaaS subscriptions. CFOs are scrutinizing software budgets like never before, and AI-driven tools make it easier to track underutilized seats. With AI pricing models, companies no longer have to lock themselves into rigid contracts—they pay for exactly what they use, eliminating SaaS waste.
AI Requires More Compute, Not More Seats
Traditional SaaS pricing is built around human users—seats, logins, and enterprise licenses. But AI doesn’t scale that way. AI workloads scale based on computing power, processing time, and API usage. This requires a completely different pricing structure, one that aligns with usage instead of headcount.
Market Demand for Flexibility
Companies are tired of long-term contracts with escalating seat-based fees. AI-first businesses like Jasper AI and Runway ML are embracing pay-as-you-go models, providing customers with the flexibility to use and pay for software as they need it. This approach not only reduces churn but also expands the total addressable market by allowing smaller businesses to afford powerful AI capabilities.
The SaaS Apocalypse?
This doesn’t mean SaaS companies will disappear overnight, but the old model is dying. The smartest SaaS companies are already adjusting. Some are shifting toward hybrid pricing—mixing subscriptions with metered usage. Others are rethinking how they package their offerings. Those that resist this change may find themselves in the same boat as on-premise software providers in the early 2000s: outdated and outpaced.
The era of predictable, locked-in SaaS revenue is coming to an end. AI is rewriting the rules, and the companies that don’t adapt will be left behind. I call this the era of Unpredictable Revenue.
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