The old "pay per user" model is starting to feel pretty outdated. Instead, we're seeing a real shift toward usage-based pricing—where you literally just pay for what you use. Think of it like your electricity bill, but for software.
And honestly? It makes a lot of sense.
The barrier to entry drops way down
Nobody wants to commit to an expensive subscription before they even know if something works for them. With usage-based pricing, you can dip your toes in without the anxiety of a big upfront cost. Take HubSpot—small teams can send a few hundred marketing emails without breaking the bank, then scale up once they're sure it's worth it.
Your team can actually grow naturally
Here's what I love about this: you're not constantly doing mental math about whether adding another team member is worth the extra $50/month. With something like Slack's model, your whole company can jump in, create channels, experiment with workflows—there's no artificial ceiling stopping you from getting the most out of the tool.
It opens doors for companies of all sizes
Startups especially benefit here. When Twilio charges based on actual API calls, a bootstrapped company can integrate professional messaging features without gambling thousands upfront. That kind of accessibility changes who gets to compete in the market.
Everyone wins when the customer wins
This is probably the biggest advantage: when you're monitoring 10 servers vs. 100, Datadog's revenue reflects that. They're not trying to squeeze you with artificial limits—they just charge more when you're actually doing more. Your infrastructure grows, their bill grows. Simple as that.
It feels less like you're fighting your vendor and more like you're both rooting for the same thing. Compare that to the old way where you'd hit some arbitrary "5 user" limit and suddenly owe double, even though those extra users barely logged in.
With usage-based pricing, there's no gotcha moment. You're not subsidizing a bunch of seats "just in case" or paying for premium features gathering dust. If you use it, you pay for it. If you don't, you don't.
That's really all there is to it. For SaaS companies willing to make the switch, it's becoming a real differentiator—especially when customers are tired of feeling nickel-and-dimed.
Top comments (0)