Gartner Research

Prepare for Big Changes in Software and SaaS Pricing, Driven by AI and IoT

Published: 07 April 2017

ID: G00321363

Analyst(s): Bill Ryan , Alexa Bona

Summary

Device-based and named user software and SaaS pricing will decline dramatically as the Internet of Things and artificial intelligence disrupt traditional business models. Sourcing and vendor management leaders must plan now to preserve investments and capitalize on vendor pricing metric changes.

Table Of Contents
  • Impacts

Analysis

Impacts and Recommendations

  • IoT-driven device proliferation will overwhelm the ability to measure and predict device-based software and SaaS costs, driving software and SaaS providers and buyers to alternative pricing metrics over the next three years
  • As AI automates work tasks that are traditionally performed by people and challenges the definition of "user," named user pricing will come under pressure, thereby significantly jeopardizing software and SaaS providers' user-based revenue streams

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