THE VALUE & PRICING BLOG
The latest stories, blog articles, and pricing news from the Ibbaka team
Agent AI - an emerging packaging pattern
AI agents are emerging as a standard way to deliver AI functionality, especially in B2B. This has been underlined by Salesforce’s recent Agentforce announcements. Agent pricing is evolving from inputs and number of agents to actions and outcomes. This evolution is framing how we think about pricing generativeAI.
The Evolution of AI Pricing Models: From Consumption to Hybrid and Generative Approaches
Second generation generative AI applications are appearing on the market and with that is coming a change in pricing. First generation applications tended to copy existing pricing models, but now that buyers and sellers are becoming more familiar with generative AI generative pricing is moving from consumption to hybrid and generative approaches.
Generative pricing: agent pricing evolution
AI agents are emerging as a standard way to deliver AI functionality, especially in B2B. This has been underlined by Salesforce’s recent Agentforce announcements. Agent pricing is evolving from inputs and number of agents to actions and outcomes. This evolution is framing how we think about pricing generativeAI.
Adobe positions its approach to generative AI pricing
Adobe is investing heavily in generative AI and has begun to signal how it will approach pricing. It is taking an incremental approach. Price remain anchored in a per seat price, but plans are becoming more flexible, and more expensive!
Generative pricing for AI is a blend of dynamic pricing and value based pricing
Conventional approaches to pricing are not fit for purpose when it comes to pricing generative AI applications for B2B. A new process is needed. Ibbaka is proposing generative pricing, a mashup (or concept blend) of dynamic pricing and value based pricing.
Will Salesforce’s stance on agent pricing frame AI pricing generally?
Salesforce has announced that it will use consumption pricing for its AI agents going forward. Why is Salesforce taking this approach? What are the implications for other Vertical AI companies? Results of our LinkedIn poll.
Monetizing GenAI Roundtable Webinar: On-Demand Recording
Ibbaka had the pleasure of hosting a roundtable discussion on Monetizing Generative AI, featuring two industry luminaries: Michael Mansard from Zuora and Kyle Poyar from OpenView Partners. Generative AI is going to transform how we build B2B applications, how we configure them, how we move to dynamic configuration, and all of that is going to have a huge impact on both monetization and pricing.
Pricing thought: OpenAI will price reasoning tokens in o1
OpenAI's o1 models are getting a lot of attention. They are a phase change for how we work with generativeAI. OpenAI has also shared how it will approach pricing of this first version of reasoning models. Reasoning tokens. What are the implications for generative AI pricing generally?
Pricing patterns for generative AI
Most companies monetizing generative AI are using hybrid pricing models where they combine more than one pricing metric. You can see that in the survey we are running to prepare for the Sept. 19 roundtable on monetizing generative AI. What metrics tend to be used together? We ran the data through a Leiden algorithm to find the clusters.
Early Insights from the Monetizing Generative AI Roundtable Survey
Here are some early insights from the survey we are using to inform our Sept. 19 roundtable on generative AI monetization. Michael Mansard, Kyle Poyar and Steven Forth will go deep into the trends in generative AI and how it us being monetized.
Ask your questions on generative AI monetization
Join our Sept. 19 roundtable on generative AI monetization. Kyle Poyar from OpenView and Growth Unhinged, Michael Mansard from Zuora and Steven Forth will have an open conversation on how second generation applications are getting priced and monetized. Take this three minute survey and prime your questions for this important session.
Only 15% of Companies are Monetizing their AI Solutions…What’s Your Strategy?
How to monetize investment in generative AI is a critical question for B2B SaaS. Join Kyle Poyar from Growth Unhinged and Openview, Michael Mansard from Zuora and Ibbaka’s Steven Forth for this webinar which will define how companies can move forward and monetize generative AI applications.
Steps on the path to generative pricing
Generative pricing emerged as a response to the pricing requirements of second generation generative AI applications, but the five steps at the heart of the approach are generally applicable. They provide a foundation for a new approach to price optimization, one based on the value being delivered.
The Path to Generative Pricing
Generative pricing will come to dominate B2B SaaS pricing over the next decade, but most companies will begin by taking small steps to get there. The five steps are to (i) build a value model, (ii) use feature flags, (iii) map features to value, (iv) design a pricing model based on the feature-value mapping, (v) have pricing define configuration (or vice versa).
Pricing approaches for generative AI applications
How should generative AI applications be priced? We asked our community in a flash poll, here are the results and our point of view on the emerging best practices for monetization and pricing of generative AI applications.
Generative Pricing
Applications built on generative AI platforms have emerging properties and will need a new approach to pricing. Software applications are becoming composable, conversational and adaptive. Pricing needs to respond. A new approach to pricing is needed. Let’s call it generative pricing.
AI pricing metrics showing up in multiple SaaS verticals
Certain pricing metrics are associated with AI applications. In this year’s PeakSpan Ibbaka Survey of NRR we are seeing pricing metrics associated with AI showing up in multiple verticals, a significant change from last ear.
Generative AI Monetization: An Interview with Michael Mansard
Generative AI application monetization is still in early days. Michael Mansard from Zuora has done some hard thinking about this. He shares his insights in this Ibbaka interview.
What does generative AI think about generative pricing?
Will generative AI apps require generative pricing? And what might generative pricing be? We asked a generative AI to get a recursive perspective on this.
Never miss an update
Subscribe to the Value & Pricing Newsletter to get insights that help you supercharge your growth.