Commitments

This vendor-friendly alternative to Pay-As-You-Go pricing works well for product-led sales (PLS) companies. Customers commit to a specific spend, typically a year in advance, and receive discounts in return. The committed amount is usually flexible and applicable to any feature, which benefits AI companies offering multiple models. While vendors gain predictable revenue and cover their upfront costs, customers may still need help managing their budgets due to potential overages. Large PLS enterprises like Confluent and DataDog have successfully adopted this model.

#What does this pricing model solve?

• Covers vendor upfront costs
• Creates a more predictable revenue stream
• Supports organic account growth for customers

#Why is this pricing model challenging?

• Customers still face unlimited cost liability
• Sales teams struggle to forecast usage accurately
• Customers find it hard to manage and control spending