From Seats to Usage: How AI Is Changing Software Monetization

Traditional software business models have long depended on a relatively stable relationship between access and economic value. Vendors typically charged according to the number of people, devices, or installations authorized to use a product. As access expanded, customer value and vendor revenue generally grew with it. Perpetual, named-user, and seat-based subscription models all reflect some version of this logic.

Software Monetization

Damien Bullot | Managing Director, Thales Software Monetization
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At a glance:

• AI is weakening the link between seats and value. Customers can accomplish more with fewer users, while usage-driven costs rise.
• Vendors are rethinking how they charge. 76% say AI is driving consideration of new pricing models.
• Execution depends on trusted usage data. 95% say it is critical for billing accuracy, yet only 25% have it centralized.
• One model will not fit every product. Seats, usage, credits, outcome-based and hybrid models will increasingly coexist.

Sentinel Meter and entitlement management close that gap by capturing usage, cleaning it, and metering it against the plan. Then it hands billing-ready records to the systems already in place.

How Software Pricing Is Changing: From Seats to Usage-Based Models

Traditional software business models have long depended on a relatively stable relationship between access and economic value. Vendors typically charged according to the number of people, devices, or installations authorized to use a product. As access expanded, customer value and vendor revenue generally grew with it. Perpetual, named-user, and seat-based subscription models all reflect some version of this logic.

AI changes that relationship.

One person can use an AI feature to complete work that once required several people. A single account can generate thousands of model interactions. An AI agent can keep working with little direct input from a user. The number of licensed users may stay flat even as the customer receives more value and your delivery costs rise sharply.

AI is also changing what customers expect to pay for. As software takes on more of the work, buyers increasingly expect pricing to reflect the value or activity they receive rather than simply the number of people with access.

That creates a basic commercial problem: you may be charging for access while paying for activity. The gap may be small during an early release. As customers adopt the feature and use it more often, it can weaken margins and leave a growing share of product value outside the commercial model.

Vendors can see the problem coming. According to IDC research, more than 60% of vendors have already integrated AI into their offerings, and more than 76% report that AI is driving the consideration of new pricing models.

60%+

of vendors have already integrated AI into their offerings

76%+

report AI is driving consideration of new pricing models

Source: IDC research

AI Separates Software Access from Cost and Customer Value

A software license has always represented a defined right. A perpetual license grants access to a product or version. A subscription grants access for a set period. A named-user license connects that access to a person. Capacity and concurrent models place limits on resources or simultaneous use.

The commercial model works as long as that right retains a clear relationship to what the customer receives and what you must provide. AI weakens that relationship in several ways.

• Every AI interaction can add cost. Inference, data processing, and retrieval consume resources with every run. Public cloud AI services charge for tokens, requests, or provisioned capacity, making consumption a variable cost.
• Human users can get more value from the same seat. AI allows a person to accomplish more without adding users or licenses. The customer receives more value from the same number of seats, while vendor revenue may stay flat.
• AI agents can consume without adding human users. AI agents take this a step further. One employee can initiate several agents, each making calls and consuming resources as it completes work. The number of

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From Seats to Usage: How AI Is Changing Software Monetization