Is seat-based pricing dead?

Seat-based pricing isn&#x27;t dead, but it&#x27;s on life support, though it has nothing to do with AI now or realistically in the future.<p>Consumption based pricing is becoming&#x2F;already the norm for 2 reasons. As a SaaS operator, my storage&#x2F;compute&#x2F;etc costs tend to go up with your usage. If I can bill by the metrics that affect my cost, then:<p>1. It feels more fair to the buyer (pay for what you use) and<p>2. Investors and finance folks like it because I can build a pricing model with consistent gross margins<p>This whole thing is hinged on the multitenant SaaS model generally though, and it being so prominent. For example, if I ship self-managed software, I no longer genefally incur hardware usage costs (except my support costs probably go up roughly linearly to usage).<p>AI doesn&#x27;t affect any of this reasoning.

Sometimes your product&#x27;s value is derived from how much time each user saves using your tool. In that case, charging per-seat aligns incentives for both parties.<p>If Zendesk charged per-message or per-issue, then the incentive for the customer is to use the product less, creating less value for both parties. They would be eaten by a product that charges per-seat and optimizes for efficiency.<p>AI pushes the equation toward a local maximum, but it&#x27;s a fallacy to assume it will reduce the number of seats for which you can charge.

This is just some drivel from yet another VC touting AI will change everything. Fuck off already.