AI is quietly dismantling the pricing model that made SaaS so valuable. The businesses that act now will be in a far stronger position than those that wait to be forced.
For two decades, seat-based licensing was the engine of SaaS economics. Add users, pass breakeven, watch margins expand. That logic is now under serious strain.
When one AI-powered seat can do the work of five, charging per user stops making sense. And unlike traditional SaaS, AI-native products carry costs that grow with every new customer. The margins that made software attractive to investors begin to look considerably more ordinary.
The businesses best placed to navigate this are those already transitioning to consumption or value-based pricing on their own terms, before the market forces their hand.
ServiceNow and others are already moving. The ones that hold on longest will face a harder transition and less favourable terms. For PE-backed SaaS firms, the exposure is real and in many cases poorly understood.
The question is not whether this model changes. It is who controls the timing.
Read Carrie Osman’s full article in Finance Derivative: https://www.financederivative.com/why-enterprise-saas-must-ditch-seat-based-pricing-before-ai-does-it-for-them/
