Cloud Services Shift to Usage-Based Pricing 0 9

The subscription model with a fixed monthly fee has existed for over a decade, and both companies and individuals have become accustomed to it. Millions of people subscribe to cloud storage for photo storage, website maintenance, or monthly payments for office software or various content creation tools, notes Viesturs Slidinsh, head of Jumis Pro.

However, new trends are emerging in this seemingly stable order. More and more companies are opting for the so-called usage-based pricing (UBP) model. This is a more detailed pricing model in which the monthly payment is calculated based on the volume of service usage over the corresponding period. If the volume changes, then the price is no longer fixed.

The software trading platform Metronome, together with investment company Greyhound Capital, surveyed over a hundred cloud service providers at the beginning of the year and found that 85% have already switched to the UBP pricing model. Moreover, this path has been chosen by 64% of the startups that Forbes magazine has called "the next billion-dollar companies."

The strengthening of this trend is also evidenced by the results of the "2025 Monetization Monitor" study by the software monetization platform Revenera: 59% of software developers expect an increase in the share of companies using the UBP approach this year.

What are the advantages of consumption-based pricing that encourage companies to adopt this method? The first and perhaps most important is a more accurate price for the service received. The client pays only and exclusively for what they use. This can be gigabytes of data in storage, the number of API calls, CPU time, or other parameters, but the most significant difference from the subscription model is that the price is calculated precisely for the volume, rather than for a threshold volume, such as 5, 15, or 50 GB of data center space. This creates greater reliability and transparency.

The second important advantage is flexibility and a low entry threshold. It is even easier for the client to regulate expenses by deciding how much of each service to use.

Of course, this approach complicates the work of the service provider, as they have to perform more complex calculations and prepare monthly invoices that correspond to consumption. Cash flow forecasting also becomes more complicated, but companies realize that consumer desires are a priority and act accordingly. The accounting and business management systems of Jumis are also transitioning to this approach so that clients can more accurately determine the number of program users and the necessary types of services. As a result, accounting systems become even more accessible to a wide range of clients, including those who have just started their activities and very small enterprises.

To fully leverage the advantages of the UBP model, companies need to conduct the necessary preliminary work and be ready for experimentation to find the most acceptable criteria for measurement and pricing for both the service provider and the client. This is especially important for companies whose service includes many measurable variables. This can include the number of users, time spent in the system, volume of data transferred, number of connections, or even all combined into a credit or token system. There are many possibilities, but it is always essential to remember that the pricing model must be as transparent and understandable for the client as possible.