In today’s landscape, increased automation makes it more difficult for solution providers to justify hourly billing and selling software by the drink instead of by the license. Enter the outcome-based approach.
AI-powered coding tools turning programming into a cheap commodity and even surpassing the abilities of human programmers scared Eduardo Ramos so much that it helped fuel his decision to sell his stake in the custom software development company where he worked as a managing partner and leave.
“I told my wife, ‘Hey, in four or five years, this business model might not be feasible,’” Ramos told CRN. “It’s turning out to be less than five years. It’s [been] a year and a half, and I’m flabbergasted about all the things that Claude Code can do, the Cursors, the Lovables” and other AI-powered coding products.
In 2024, Ramos started his Austin, Texas-based solution provider Viewnear, going all in on Snowflake as a partner and developing a strong focus on customer outcomes, turning away from the hourly rate pricing he was familiar with.
[RELATED: Snowflake Is Unlocking AI’s Future—And For Partners, There’s No Time Like The Present]
“That was the old model,” he said. “It is going to die, I think, the way we know it today.”
The outcome-based approach to AI technology has come up among solution providers and vendors as an economic model that might make more sense as automation makes it harder to justify billing by the hour and software is sold by the drink instead of by the license.
Multiple solution providers who spoke with CRN expressed an interest in outcome-based pricing with customers but said that requires them to intricately know the types of projects they are taking on and their scopes. The solution provider has to take into account the possible outcomes, the measurables and maybe even the industry the customer is in.
Examples of outcome measurements solution providers are looking at include a portion of a client’s savings on their Snowflake consumption bill if the solution provider optimizes the client’s spending with the vendor. Another avenue is measuring a human worker’s gained productivity from AI, such as the ability to review more contracts in a day.
Bernadette Kogler, co-founder and CEO of Arlington, Va.-based RiskSpan—a partner of Snowflake and Amazon Web Services—told CRN that her company this year plans to start pricing projects as fixed fee plus bonuses based on outcomes and performance. The company has already been evolving its business model over the years, moving from mostly advisory services to in 2019 introducing a SaaS platform for clients to use with a heavy AI strategy consulting practice.
“The day for time-and-material-based consulting is over,” she said. “We think we’re better than many [others]. We can go faster, and we want to be paid for that value-add. … If consultants are not thinking that way, they don’t really know what they’re doing.”
Last year, RiskSpan rolled out the first AI agent on its platform so that analysts can query a decade-plus of housing loan data.
“What we are doing is fundamentally changing the way the business operates,” she said. “[AI] democratizes it all, makes it so easy that anyone—like middle management that would never know how to write [a programming script]—can now write a script.”
Joe Berg, general manager and global leader for data and AI at Seattle-based Slalom, No. 31 on CRN’s 2025 Solution Provider 500, told CRN that channel partners will have to be flexible with their pricing when working on a multiyear project as AI will likely rapidly evolve within that project window. Just as customers can get frustrated with buying licenses if they don’t use all the products that come with the license, solution providers will have to show that the customer isn’t consuming irrelevant services from a vendor.
Outcome-based models require “a different sales cycle” for vendors and solution providers, he said. “How are we starting from the value equation, moving back, versus the widgets that they want to create, and what’s the cost of the widget? Because that’s a different way to think about what you’re selling and how you’re selling it.”
Snowflake CEO Sridhar Ramaswamy told CRN that he endorses an outcome-driven model for partners even though that represents a riskier approach to hourly billing.
He said he wants to pass on learnings from Snowflake’s in-house services team to the channel on how to adopt the model and pointed to Snowflake’s coding AI agents and the SnowConvert AI-powered migration and modernization tool, freely available to partners, as ways to help adopt the model.
“Being flexible, being outcome-driven, is what is going to drive great results for partners,” he said.
Viewnear’s Ramos said the outcome-based approach is in demand from customers. He’s still working his way through breaking down projects per use case—start with database unification, move onto data analytics, spend a few months or so on each new project—as opposed to customers signing on for longer, two-year transformations. He also recognizes the increased risk he carries if customers go bankrupt or cancel in the middle of a project, turning to downpayments and collecting payments at multiple milestones throughout the engagement as ways to alleviate some risk.
Still, Ramos said the potential upside far outweighs the downside. “We were born as a data AI company,” he said. “I feel I’m with the right partner, with the right company.”
