SaaS Maturity, AI Hype, and Pricing Models with Ryan Morris and Seth Robinson

Business of Tech: Daily 10-Minute IT Services Insights

Dave Sobel is joined by analysts Ryan Morris and Seth Robinson to discuss the current state of the SaaS industry, the challenges with pricing models, and the impact of AI on the market. The analysts delve into the maturing nature of SaaS, highlighting the importance of demonstrating value to customers and the need for a shift towards outcome-based pricing models. They also explore the evolving landscape of AI and its potential to disrupt traditional pricing structures in the SaaS world.

The conversation shifts towards the challenges of managing cloud spend and the need for companies to optimize their software code and implement chargeback processes effectively. The analysts emphasize the importance of educating customers and providing tangible value to ensure long-term success in the SaaS market. They also discuss the evolving net retention rates in the software industry and the implications for growth and customer retention.

As the discussion delves into the role of AI in pricing models, the analysts explore the concept of per seat pricing and its limitations in the AI-driven landscape. They predict a shift towards consumption-based pricing models and emphasize the need for a focus on outcomes rather than inputs. The conversation concludes with a reflection on the potential for an AI bubble and the natural hype cycle that emerging technologies go through, highlighting the importance of delivering real value to users amidst market fluctuations.

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