Gen AI is forcing a reckoning in how software companies charge for their products, according to Metronome’s CEO, Scott Woody. Traditional seat-based subscription pricing, once the standard for enterprise SaaS, is breaking down under the weight of AI systems that do work rather than simply provide access. In a recent AI + a16z podcast, Woody described the shift as an industry-wide reset, and one that most companies are unprepared for.
“You just inserted an insanely expensive line item into your bottom line in the form of AI,” Woody said. “You have to be engaging with it now.”
Metronome, which Woody co-founded in 2019, sells billing infrastructure meant to help software companies transition to usage-based and hybrid pricing models. While such models aren’t new: AWS and other infrastructure providers have used them for years, the complexity increases when applied to enterprise software layered with AI capabilities. “The value is now the work the software is doing on my behalf,” Woody said. “That doesn’t monetize in the ‘scaling with users’ way.”
