At Kinetic Data, we've always believed that software pricing should align directly with the value customers receive. It's why we've built our business around consumption-based pricing that ties costs to actual workflow automation and business outcomes. As the industry grapples with increasing SaaS costs and complexity, we want to share our perspective on why this model isn't just fair—it's the future of software pricing.
The Problem with "Pay Per Seat"
Let's be honest about traditional software licensing: paying the same amount for every user, regardless of their actual usage or value received, doesn't make sense. When a power user who drives significant business value through daily platform use costs the same as someone who logs in once a quarter, something is fundamentally misaligned.
This misalignment creates real problems. According to MuleSoft's latest research, organizations now manage an average of 991 applications. Each comes with its own licensing model, user tiers, and compliance requirements. IT teams spend 37% of their time just managing integrations between these systems. Something has to change.
Why We Choose Consumption-Based Pricing
Our approach is simple: customers should pay based on the actual value they receive. For Kinetic Data, this means tying costs directly to completed workflows—a measurable indicator of process automation and time savings. Here's why we believe this model is fairer for everyone:
1. Alignment with Business Value
When customers automate processes and save time, they're getting real ROI—and our pricing reflects that. There's no paying for shelfware or unused seats. Every dollar spent corresponds to actual business value received.
2. Lower Barriers to Entry
Traditional licensing often requires significant upfront investment in seats that may not be fully utilized for months or years. Our consumption model lets organizations start small and scale naturally as they realize value, reducing initial risk and accelerating time to benefit.
3. Flexibility to Scale
Business needs change. Seasonal variations, project-based work, and organizational changes all impact software usage. Consumption-based pricing automatically adapts to these changes without the need for complex license negotiations or true-ups.
Addressing Common Concerns
We understand that consumption-based pricing raises some valid questions. Here's how we address the most common concerns:
"How do we budget for unknown usage?"
We work with customers to develop conservative first-year estimates based on their specific needs. Throughout the year, we provide clear visibility into usage patterns. If usage exceeds estimates, we often don't do a true-up in year one—instead, we use that data to right-size year two pricing.
"What about predictability?"
While consumption can vary month to month, we help customers understand their usage patterns and trends. Our experience shows that usage typically stabilizes after the initial implementation period, making costs more predictable over time.
"Won't this cost more as we scale?"
Actually, consumption-based pricing often costs less than traditional licensing because you're not paying for unused capacity. As usage grows, the value received grows proportionally—creating a fair value exchange.
Our Commitment to Customer Success
Fair pricing represents just one aspect of our commitment to customer success. We understand that the transition to consumption-based pricing requires more than just a different billing model. It requires a true partnership focused on delivering and measuring business value. This is why we provide comprehensive usage analytics and forecasting tools, coupled with ongoing guidance on optimization and best practices. Our goal is to ensure customers have complete visibility into their consumption patterns and understand exactly how our platform drives ROI for their organization.
The Future of Software Pricing
We believe the industry stands at a tipping point. The traditional answer of "buy more licenses" to every software challenge is no longer sustainable. Forward-thinking organizations demand pricing models that authentically reflect the value they receive. This means aligning costs with actual usage, providing flexibility to scale, and reducing the administrative overhead that plagues traditional licensing models. Most importantly, it means enabling faster innovation and experimentation without the constant worry about license counts and compliance.
Why This Matters Now
The shift to consumption-based pricing transcends simple cost considerations—it fundamentally transforms the relationship between software vendors and their customers. In today's landscape of rapid digital transformation, organizations need pricing models that enable rather than constrain innovation. With IT departments spending 56% of their budgets on maintenance, the pressure to optimize spending while accelerating transformation has never been greater.
Traditional licensing models force organizations to choose between overprovisioning licenses or risking compliance issues. Consumption-based pricing eliminates this dilemma by creating a direct link between cost and value. When organizations only pay for what they use, they can focus on driving value rather than managing licenses.
Our Vision for the Future
At Kinetic Data, we envision a future where software costs directly mirror the business value organizations receive. In this future, innovation flows freely, unconstrained by artificial licensing barriers. IT teams spend their time driving strategy rather than managing license compliance, and the relationship between vendors and customers becomes one of true partnership focused on mutual success.
This vision extends beyond simple pricing mechanics. It's about creating an environment where organizations can experiment, innovate, and grow without the traditional constraints of software licensing. When costs align naturally with value received, both vendors and customers can focus on what truly matters: driving business outcomes.
Moving Forward Together
The journey to consumption-based pricing requires thoughtful planning and partnership. We're committed to sharing our experience and insights to help organizations understand how this model aligns with their business goals. Through careful estimation of potential usage, planned transitions from traditional licensing, and ongoing measurement of ROI, we help ensure successful adoption of this more equitable pricing model.
The future of software pricing is about more than just how we charge for our services—it's about fundamentally rethinking the relationship between software vendors and their customers. We believe that when costs align directly with value, everyone wins. Let's start a conversation about how this approach could transform your organization's relationship with software vendors and help drive your digital transformation journey forward.
