Enterprise software vendors' consumption-based pricing is creating uncertainty and concern among CxOs trying to get a grip on budgets.
In the September BT150 CxO meetup, IT decision-makers said consumption-based models from software providers have come with price increases that impacted adoption. Snowflake and Domo were cited as vendors that recently raised prices. In a February meeting, CxOs were more constructive about consumption-based models.
Here's a recap of our CxO call, which operates under Chatham House rules.
One CxO noted that the biggest concern with consumption pricing--often couched in terms like flex credits--was "the lack of predictability and impact on adoption." CxOs agreed that when they can't accurately forecast technology costs there's a reticence to adopt tools like AI agents.
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BT150 members also noted that the unpredictable nature of consumption-based pricing was also straining vendor relationships. "There needs to be a balance between value-based pricing and predictability for long-term partnerships." Vendors want to capture value from usage, but customers also require cost certainty.
According to CxOs in the BT150, the pricing challenges are leading to a few strategies:
- Be more cautious about platform selection and usage patterns. CxOs noted that they have no desire to leverage multiple platforms.
- Seek alternatives with more predictable cost structures.
- Search for value in discussions with vendors where the focus is on more predictable pricing for the two or three areas that are really driving value for the enterprise. Once usage on these high-value areas settles, costs should be more predictable.
The pain with consumption based pricing is more acute for mid-tier customers that are used to having more fixed cost models. Larger enterprises tend to be more familiar with consumption pricing and have more visibility into what the company will consume.
Previously:
- BT150 zeitgeist: Inside a ransomware attack, AI project success
- What we learned from enterprise tech buyers in first half of 2025
- BT150 zeitgeist: Agentic AI has to be more than an 'API wearing an agent t-shirt'
- BT150 CxO zeitgeist: AI agents promising, but in transition period
- BT150 zeitgeist: CxOs weigh in on SaaS consumption models for genAI, agentic AI
- BT150 zeitgeist: AI, efficiency, vendor angst and finding the right IT structure
- Boomi's product, technology chief on what's needed for AI agents to work together
- Enterprise AI: Here are the trends to know right now
- Here’s what technology buyers say about AI, technology, transformation
