Published on January 7, 2024, 12:17 pm
In October, Box made an exciting announcement regarding their generative AI features. They introduced a new pricing approach that moves away from the traditional flat rate model and adopts a unique consumption-based system. Under this new model, each user is given 20 credits per month, which can be utilized for any number of AI tasks. Each task will consume one credit. However, if users require more credits beyond their initial allocation, they can dip into a shared pool of 2,000 additional credits provided by the company. Once exhausted, customers can engage in a conversation with Box’s sales team to explore options for purchasing additional credits.
According to Box CEO Aaron Levie, this innovative pricing strategy allows them to charge based on usage while acknowledging that different users may have varying levels of engagement with the AI features. Moreover, the pricing accounts for the expenses incurred by Box due to its utilization of the OpenAI API as the foundation for its large language model.
Meanwhile, Microsoft has taken a different approach by opting for a more traditional pricing model. In November, they announced that their Copilot features would be available at an additional cost of $30 per user per month on top of the regular Office 365 subscription fees (which vary depending on the customer).
Throughout last year, it became evident that enterprise software companies were embracing generative AI features. At Web Summit in November, there was a panel discussion on the impact of generative AI on SaaS companies where Christine Spang (co-founder and CTO at Nylas) and Manny Medina (CEO at Outreach) highlighted the challenges faced by SaaS companies when implementing these features.
Spang emphasized that despite all the hype surrounding generative AI, it represents a significant step forward in technology adoption. Software companies need to find ways to incorporate it into their products effectively. She acknowledged that while it may not currently meet all expectations set by hype levels (rating “10 out of 10”), there is undeniable value in the technology. Spang believes that the true differentiator lies in how people connect generative AI with other systems, applications, and utilize it to deliver tangible benefits across various use cases.
Overall, the integration of generative AI into enterprise software holds immense potential for transforming industries. The development of innovative pricing models will be crucial in ensuring accessibility and flexibility for users while maintaining sustainability and profitability for companies offering these features.