Snowflake’s Pay-What-You-Use Pricing Gains Favor With Software Firms
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Business software pricing is starting to look less like a monthly Netflix subscription and more like your home water bill.
Business software pricing is starting to look less like a monthly Netflix subscription and more like your home water bill. Economic uncertainty and tightening budgets are accelerating a move to consumption pricing, which charges software customers based on how much they use a product rather than a recurring annual or multiyear subscription fee. The model, popularized by Snowflake Inc., is being adopted by a growing number of software makers, including C3.ai Inc. and Autodesk Inc. Analysts have traditionally viewed pay-as-you-go as a liability for providers, figuring that customers can more quickly dial back spending when times get rough. But in the cur...