In Defense of Pay-as-You-Go

Aligned incentives with their customers. They usually have a “pay per use” pricing model with the ability to scale operations ‘infinitely.’

On the other hand, the idea of increased productivity is a harder sell in the home. Generally speaking, consumers prefer subscriptions when there’s a clear cost savings for the “all-you-can-eat buffet” vs. a la carte purchases.

You can charge recurring revenue; after all, nobody wants to work with obsolete data. (This is harder in the early days, not because of lack of buyer appetite, but because your update cadence probably isn’t good enough.)

There should be a better way to finance recurring revenue businesses.

And, in another sense, hardware companies that shift to a subscription model are pricing according to reality. If you buy something and use it every day for years, it makes sense that you’d pay for it as you use it rather than buy an uncertain amount of usage at one upfront price. The gradual shift to subscription-based hardware is just the economi... See more