The storm
For twenty years, software monetization was fairly stable. The toughest challenge was on-premise laggards moving to the cloud. Then ChatGPT launched, and AI disrupted vendors and customers at every layer of the tech stack. New metrics, new marginal costs, new entrants, and new sources of value emerged each week. And the market noticed: software shed over $1 trillion of market cap over three days in early February 2026. Every company now has to rethink pricing to defend past revenue, survive the present storm, and accelerate toward future growth.
The myths
In the wake of this storm, monetization myths emerged. Three are particularly enticing in their over-simplification, but still wrong.
- "The seat is dead." No, the seat didn't die. For many vendors, value still scales by the number of humans accessing their tech. But now it also scales by how much those humans use and what they achieve. The seat lives on inside hybrid metrics.
- "Outcome-based pricing is the future." $/outcome works for the few vendors whose value scales that way, who can attribute the outcome to their tech and who can verify success. Most categories can't prove the outcome — so most can't charge for it.
- "Just copy how the leaders price." The leaders are experimenting and guessing too. By our count, Salesforce is running five overlapping genAI pricing models at once — and not all will survive. At Dreamforce 2025, Marc Benioff said the quiet part out loud about its agentic pricing: "We didn't have a dictated price. We actually built an app internally to figure out what each customer's pricing should look like because they all need something slightly different based on their consumption and business outcomes." The leader's playbook is that there is no playbook to copy.
The reality
Confront the myths and what's left is reassuring: monetization works as it always has. The inputs just got disrupted.
Pricing has always depended on five inputs — the value delivered, the competition, the cost to deliver, your operations, and your strategy. After a long stretch of SaaS stability, AI hit three at once:
- Value split in two. AI created a wave of genuinely new value and, at the same time, made existing value far cheaper to deliver and copy. A windfall for buyers; a reckoning for incumbents and investors.
- Competition was unleashed. When cost-to-build collapses, the product is no longer a moat. Entrants and adjacent players arrive from every direction.
- Cost came back from the dead. For two decades, marginal cost was infinitesimal. Now it behaves like a normal cost of goods — material, volatile, and rising with customer use.
The other two inputs held. And they are how you respond. Commercial operations is the machinery you build to absorb the shocks: metering, cost visibility, the ability to bill and recognize revenue. Strategy is the way you've chosen to play the game.
So the principles didn't change. Three inputs moved at once, which makes it feel like the rules broke. They didn't. This is a structural recalibration that you can manage operationally and win strategically.
The game you're built to play
You know your customers and their use cases. You have a strategy to make them successful and grow your business. You need pricing and packaging built on first principles, guided by someone who can read which inputs have moved and how far. In the coming weeks, we'll lay out the no-regrets moves every vendor should make to stay in the game and the strategic options to leverage as you play.
Monetization didn't break. The inputs moved. Learn to navigate them, and you win.