>usage-based sounds like the ideal solution. Although I haven't figured how to set that up yet. Your don't want to encourage low usage.
As an end user of some B2B software priced using this model, I can vouch for this. It's been frustrating for me and my coworkers, and it does do what you say: encourage low(er) usage. (Especially if it's variable pricing rather than being split into different tiers based on usage ranges.)
The perspective I and others have felt is that "you're punished for using the product".
There are different ways usage could be measured, but for some information security products that process or analyze logs/events, for example, the more things you log, the more your costs increase linearly. There are many instances where a valuable logging initiative could increase costs by 2x - 10x. I remember having to spend time away from actual work in order to find log sources to cut to reduce the extremely hefty costs we were paying.
Is this down to who has authority to approve spending, and it's easier to get approval for a larger chunk at once?
As a business owner I'm the opposite of you; I want more services to have usage-based pricing like S3.
Take your logging example. It seems fair that if I log 2x more I pay 2x more. If there's business value in that logging then it's a no-brainer.
With fixed pricing tiers I know that's when I'm at the lower usage end I'm paying over the odds, and when I'm at the upper end I have the problem you describe of not wanting to exceed my usage and move up a tier with a large price increase.
>With fixed pricing tiers I know that's when I'm at the lower usage end I'm paying over the odds, and when I'm at the upper end I have the problem you describe of not wanting to exceed my usage and move up a large price-step.
True, that can be an issue, as well, but once you're an enterprise at a sufficiently large size and are pretty much always guaranteed to be in the highest tier anyway, the flat monthly price can often be a lot less costly.
For the record, the main product I'm referring to in this case is Splunk. Excellent product that I love using (and still often use the free tier of for personal use), but I know a lot of companies have moved away from it due to the cost.
I think logging doesn't necessarily scale that closely with company size, revenue, how many people are using the product, how many actual machines you have, etc. A competent, motivated, small team at a small company with not that many systems could end up logging a lot more events per day than a much bigger team at a much bigger company with many more systems. Especially if the team is specifically focused on logging for security purposes.
And in this case, the variable pricing is arbitrary rather than a response to an actual increase in cost: the product is hosted on-site and maintained internally, with us also covering costs for the server cluster and resources, so it's not like there's any kind of marginal cost for the company based on how much we log.
I don't think it's necessarily a bad pricing strategy in terms of what can generate the most revenue for their company, or that it's unfair or underhanded or that they don't deserve it or anything like that, but I and some other people who spent most of our day working with it just began to find it frustrating.
As an end user of some B2B software priced using this model, I can vouch for this. It's been frustrating for me and my coworkers, and it does do what you say: encourage low(er) usage. (Especially if it's variable pricing rather than being split into different tiers based on usage ranges.)
The perspective I and others have felt is that "you're punished for using the product".
There are different ways usage could be measured, but for some information security products that process or analyze logs/events, for example, the more things you log, the more your costs increase linearly. There are many instances where a valuable logging initiative could increase costs by 2x - 10x. I remember having to spend time away from actual work in order to find log sources to cut to reduce the extremely hefty costs we were paying.