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Muhammad Tahir
20 December 2024
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How Per-Seat SaaS Pricing Can Drain Your AI Budget and What to Do About It
- Blog
- Muhammad Tahir
The software-as-a-service (SaaS) model has become a cornerstone for businesses in virtually every industry, providing scalable, efficient solutions for everything from project management to customer support. However, as SaaS has gained popularity, many organizations are starting to realize that one of the most common pricing models— per-seat pricing —can quickly spiral out of control as their teams grow. This pricing approach, while seemingly straightforward, can lead to skyrocketing bills and an unsustainable cost structure, especially for large organizations and enterprise-level deployments. For comparing price on build vs buy approach checkout our blogpost on comparison between build vs outsource vs buy.
In a per-seat pricing model, companies pay a set fee for each user or employee who uses the software. This approach is often appealing for its simplicity: if you have 10 employees, you pay for 10 licenses; if you have 1,000 employees, you pay for 1,000 licenses. However, this model can become increasingly burdensome as organizations scale. The problem is not just the per-user cost, but how quickly it adds up as your organization grows, creating a bloated SaaS bill.
Example: Traditional SaaS with Per-Seat Pricing
Consider a ChatGPT for enterprise solution that charges $60 per seat per month. For a company with 1,000 employees, the monthly bill would be:
Monthly Cost = 1000 employees x 60 USD/employee = 60,000 USD/month
This adds up to a staggering $720,000 annually for a single software tool. For larger enterprises, this is just one of many such tools, leading to multiple SaaS subscriptions and total costs that can easily exceed millions of dollars every year. These increasing bills can make it harder for organizations to maintain cost control, especially when dealing with numerous platforms for various business needs.
Even worse, growth-induced cost inflation is a major issue with per-seat pricing. As the company hires more employees, the software costs grow in tandem. While it might seem like a manageable expense at first, the growth of the company can quickly turn this cost model into a major financial burden.
CloudKitect GenAI: A New, Predictable Pricing Model
Enter CloudKitect’s AI-powered platform, which offers a fixed monthly cost for unlimited users within an organization. This pricing model is especially relevant in today’s AI era, where the proliferation of artificial intelligence use cases is accelerating across all industries. With CloudKitect GenAI, organizations can use AI for a wide variety of use cases—such as natural language processing, predictive analytics, and automation—without worrying about per-seat charges.
Instead of paying for each user or employee accessing the platform, CloudKitect charges a fixed monthly subscription that covers unlimited users. The only additional cost organizations need to pay is for the AWS usage fees (such as compute and storage), which are highly granular and flexible, based on actual usage. This model not only provides predictable costs, but also scales efficiently as the organization grows, without the exponential increase in costs that comes with per-seat pricing.
Let’s perform a detailed analysis comparing the two models—traditional per-seat pricing and CloudKitect GenAI’s fixed monthly cost model.
1. Predictable Costs
One of the most significant advantages of CloudKitect’s pricing model is the predictability. With traditional per-seat pricing, costs can spiral out of control as the company grows. This creates budgeting challenges for businesses trying to plan ahead. With CloudKitect, however, the costs are fixed and known upfront. The only variable is the AWS usage, which is based on actual consumption, meaning that businesses can predict their AI costs with greater accuracy.
2. Unlimited Users
CloudKitect’s platform is designed for unlimited users within an organization. This means that no matter how large your team becomes, the platform remains cost-effective. In contrast, traditional per-seat models can create significant financial friction as every new user increases costs, especially for large teams with diverse departments.
3. Control Over Your Data
CloudKitect’s AI platform provides organizations with complete control over their data, a crucial aspect of many modern AI-driven use cases. Unlike traditional SaaS platforms that often store data in their own proprietary systems, CloudKitect enables businesses to maintain full data sovereignty while utilizing powerful AI tools.
4. Speed and Agility
With CloudKitect, your organization can get up to speed quickly with AI. The platform is designed for easy integration and seamless scaling, so your team can start leveraging AI for a variety of use cases without worrying about seat limitations or escalating costs.
As organizations increasingly adopt AI, the limitations of traditional per-seat SaaS pricing become clear. AI is not a tool for just a select few employees—it’s something that can benefit everyone in an organization, from developers to analysts to executives. The typical model, which charges based on the number of users, doesn’t align with the reality of AI’s potential impact. Companies should be able to empower unlimited users with access to AI tools without worrying about exponential cost increases.
CloudKitect’s fixed monthly cost model is the future of SaaS pricing in the AI era. By removing the barriers associated with per-seat pricing, CloudKitect enables organizations to scale AI adoption quickly and efficiently without the fear of unpredictable costs. This shift to a more flexible, predictable pricing model is not just beneficial for businesses—it is essential to unlocking the full potential of AI across entire organizations.
In conclusion, as businesses move toward AI-driven solutions, it’s crucial to adopt pricing models that reflect the unlimited potential of AI use cases. CloudKitect’s GenAI platform is leading the way with its scalable, predictable, and user-friendly pricing structure, offering a blueprint for how AI can be democratized within organizations. This new approach to SaaS pricing is not just a good idea—it’s the key to driving successful, sustainable AI adoption at scale.
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CloudKitect revolutionizes the way technology startups adopt cloud computing by providing innovative, secure, and cost-effective turnkey AI solution that fast-tracks the digital transformation. CloudKitect offers Cloud Architect as a Service.
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CloudKitect revolutionizes the way technology startups adopt cloud computing by providing innovative, secure, and cost-effective turnkey solution that fast-tracks the digital transformation. CloudKitect offers Cloud Architect as a Service.
Products
Quick Links
Contact
- 355 South Grand Avenue Suite 2450 Los Angeles, California 90071
- info@cloudkitect.com
- 1-805-391-6553
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