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It’s a pivotal moment for SaaS companies. The widespread adoption of generative AI has caused a wave of pricing experimentation beyond the tried-and-true subscription model of the past few decades.
We won't go as far as to say that SaaS as a business model is dying, but it is changing, especially as more and more SaaS companies launch AI-powered features, copilots, and agents. Navigating what’s right for your company can be tough, but understanding how other SaaS companies are thinking about, and monetizing, AI is a good place to start.
Let’s get into it.
1. Unsurprisingly, More SaaS Companies Are Monetizing AI Today Than a Year Ago
According to the 2024 SaaS Benchmarks Report, 56% of companies reported that they have launched or tested AI features in their products within the past year. Of this group, 41% are monetizing AI features, a number that’s up 9% from 2023. When asked what’s driving founders’ AI strategies, the most common response? Revenue expansion opportunities.
The second-leading driver of AI strategy, according to survey respondents, was customer demand. While there’s a lot of talk about how to use AI to improve productivity within organizations, early-stage SaaS companies see AI as a way to expand revenue opportunities and meet growing customer needs first.
Prediction: GTM Strategy Will Become a Major Focus
Now that more and more SaaS companies are launching and monetizing AI within their products, the next challenge will be getting users to adopt, pay for, and use these features. Companies will pour resources into selling their AI features, and will need to find key differentiators that set their AI apart from competitors.
2. Most Early Stage SaaS Companies Are Still Monetizing AI Via a Subscription-Based Model
AI changes the rules of the game. To keep margins healthy, companies need to keep a pulse on usage and computing costs — OpenAI recently shared that they’re losing money on their $200-per-month Pro subscriptions, with CEO Sam Altman opening stating they may consider usage-based pricing. While this isn’t of dire concern for OpenAI, it is a good example of how unexpected adoption can lead to, yes, happy and engaged customers that fuel product adoption and growth, but also challenges in pricing and packaging within AI products.
OpenAI isn’t alone in opting for a subscription component to pricing. According to the 2024 SaaS Benchmarks Report, 68% of SaaS companies monetizing AI are doing so with a subscription component.
Prediction: For Early Stage SaaS, Subscription Pricing Will Still Play a Large Part (for Now)
I don’t think we’ve reached the point where all AI features will shift to usage or outcome-based pricing, specifically for early stage SaaS companies. While OpenAI’s Pro subscriptions are an interesting case study in adoption and costs associated with generative AI, most early stage SaaS companies are facing more pressing challenges (i.e., searching for product market fit), and might not be experimenting heavily with AI pricing and packaging…yet. That said, AI-first and large SaaS companies will likely be thinking about these more “AI-friendly” pricing models from the get-go.
3. There’s a Lot of Pricing Experimentation Happening
We’ve seen a handful of pricing models pop up over time, such as:
- Usage-based pricing: charges customers based on how much of a product or service they use,
- Outcome-based pricing: charges customers based on the value it provides, and
- Hybrid pricing: a combination of the above and/or subscription pricing
While our report showed that there’s still a fair amount of subscription or seat-based AI monetization for early stage SaaS companies, some of the largest SaaS companies are actually shifting to output driven pricing.
Prediction: Large SaaS Will Innovate, Early Stage SaaS Will Follow
We can see how large SaaS is shifting towards different pricing strategies, and how early stage SaaS still contains a subscription component. In 2025, we’ll see more early stage SaaS adopt the pricing strategies set by their larger counterparts in 2025, who will lead the way in both fine tuning output and/or usage-based pricing while educating buyers on these new models.
4. AI Features and Products Are Formalizing
We know SaaS companies of all sizes are launching and monetizing AI products and features. But what does that actually look like? And where are SaaS companies starting to incorporate AI within their products? While this isn’t a comprehensive list, it does start to showcase some ways SaaS companies are bringing AI products and features into their businesses.
1. AI Chatbots and Search (Helpful, Safe)
- What: Simulates human conversation, provides answers to questions
- Example: AI Knowledge Manager in Clickup
2. Content Creation
- What: Creates or refreshes content, written and visual assets, based on a prompt or data
- Examples: Generative Fill in Photoshop, Content Hub in HubSpot, Proposal Creation in Hyphenate
3. AI Copilots
- What: Virtual assistant that helps with performing and executing tasks
- Example: Microsoft 365 Copilot, GitHub Copilot
4. Workflow/Automation Builders
- What: Creates a sequence or workflow, typically based on a prompt
- Example: AI automation in Zapier
5. Predictive Analytics and Recommendation Engines
- What: Analyzes data to predict outcomes, and can provide relevant recommendations
- Example: Breeze Intelligence in HubSpot, Predictive Enablement in Luster
6. Personalization
- What: Tailors content and interactions based on user behavior and preferences.
- Examples: Email Personalization in Backstroke
7. AI Agents (The Holy Grail, Ambitious and Yet to Be Proven)
- What: AI that performs tasks and makes decisions independently
- Examples: Agents in Sierra, Agentforce in Salesforce, ChatGPT’s deep research, Fin 2 in Intercom
Prediction: Buyers Will Start to Value AI Features Differently
Marketers everywhere are trying to position their companies as AI-forward (which might not actually matter much?), and consumers are merely trying to keep up. What’s the difference between an AI copilot vs. an AI agent vs. an AI virtual assistant, anyway? Whether buyers fully understand the capabilities of the feature they’re purchasing, consumers will start to feel whether it lives up to the promise or value they’re expecting.
If 2022 was the mass adoption of individuals using ChatGPT, 2025 will be the mass adoption of AI features within SaaS products customers have been using for years.
5. We’re in an AI Agent Arms Race
Of all the capabilities of AI, agents are the theoretical holy grail because the promise and value to any business is almost too good to be true — AI can do the work of a human. Marc Benioff believes AI agents are the future. Others are starting to feel disillusionment set in.
Prediction: Every Large SaaS Company Will Launch an AI Agent
The Information recently wrote about Salesforce’s mad dash towards building and selling Agentforce, the company's AI agent. In the article, it’s clear that Marc Benioff believes investing in AI agents is critical to the future of the business. He's not alone, and 2025 will be the year where we see every large SaaS company launch and sell (their version of) AI agents.
AI and SaaS: 2025's Shifting Landscape
AI is shifting the SaaS landscape. While subscription models remain relevant for now, the rise of usage-based and outcome-based pricing, coupled with the increasing sophistication of AI features, signals something greater than merely a trend. 2025 will be a crucial year as we see which pricing models stick, which AI features truly resonate with customers, and whether the promise of AI agents lives up to the hype. For those building in Generation AI, the journey is just beginning.
