From billable hours to SaaS per seating pricing. AI will disrupt.

admin@example.com — Tue, 01 Oct 2024 12:11:51 +0000

I still remember some decades ago when SalesForce were pushing their new motto:

SalesForce.com Success. Not Software.

Back then almost all bespoke developed software included all the hassle of software maintenance and support typically charges at both 12% and 10% per annum of the total build . So it was disruptive in that sense. Never mind the thousands upon thousands of man days required to build the bespoke software and those of us building a supporting it did well.

For more than a decade I've tried to distance myself from billable hours and let's be a little honest with myself from those pesky timesheets. I had little re-lapse (but I had good reasons) a yet all along I also rang the warning bells of this out-dated business model. With the combination of AI and low-code / no-code tooling announcing the slow death to billable hours in software development.

It never really made sense for companies that sold you billable hours to also push for efficiencies and a large chunk of the AI revolution is focused on those efficiencies.

But it's potentially getting even more interesting or bleak if you're not a disruptor! As David Heinemeier Hansson brought to our attention in his opening keynote at the 2024 Rails World at the 28:33 mark, Cloud is creating an incredible markup and SaaS providers are doing it all over again on top of that cloud infrastructure.

So where does SalesForce come into this? Well at AgentForce they've announced they're moving away from per seat licensing towards a per consumption model. Bottom line? SaaS will not be able to compete when pricing models are based on value provided which in turn is closer to ROI.

Ideas that come to mind as I'm inspired but what happens around us.

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From billable hours to SaaS per seating pricing. AI will disrupt.