Dive Brief:
- The accelerating cost of deploying AI products and features is eating into tech vendor profits, according to 70% of technology executives surveyed in a Revenera report published Tuesday. As a result, 52% are planning new pricing models to mitigate rising cloud spend tied to keeping up with AI demands, the survey found.
- Usage-based pricing represents a key emerging strategy for vendors offering cloud and embedded software deployments, the report found. More than half of respondents expect usage-based revenue to increase by 2027. Revenera surveyed 501 product leaders at global tech companies from April to June 2025.
- “AI is transforming the software economy, but it’s also testing the limits of traditional monetization strategies,” Revenera SVP and General Manager Nicole Segerer said in a release accompanying the report.
Dive Insight:
Rising AI demand is pushing tech providers to rethink pricing structures to curb cloud spend – a cost enterprise executives are also working to reduce.
Public cloud spend is expected to increase fourfold over the next three years as IT leaders scramble to keep up with generative and agentic AI workloads, according to TD Cowen. More than half of respondents to Revenera’s survey, 54%, anticipate their cloud usage to rise.
Increased cloud spend will prompt IT leaders to consider purpose-built infrastructure to align with accelerated AI use. For tech vendors, new pricing models can help ease the impact of rising cloud spend, which is cited as the biggest roadblock to increasing annual recurring revenue, Revenera found.
Vendors currently rely on subscriptions as their primary AI monetization model. However, subscription model use is expected to decline as usage-based models grow more popular, according to the Revenera report. Nearly three-quarters of suppliers have moderate adoption of usage-based models.
Per-user subscription models are unlikely to help maximize revenues for technology providers, according to Paul Bland, Revenera’s senior director of product management.
“You could sell three user-based subscriptions, and those users could be incredibly heavy users of high-cost things like AI,” he said.
Providers are also struggling to align pricing with value for customers, with only 36% of companies reporting strong alignment. AI must add value for customers through better experiences and outcomes, which is where good usage data comes into play, Bland said.
“As soon as you’ve got a high value experience, you’ve got a monetization opportunity,” Bland said
