Best practices for Generative AI packaging and pricing

In our recent, Global Pricing Study we established that 40 to 60% of innovations fail to meet financial targets or fail entirely. We also find mixed signals about profitability of highly innovate AI companies (e.g., Anthropic’s 50-55% margin), which shows that a point raised by Andreessen Horrowitz in 2020 that AI gross margins are often 10-20 p.p. lower than SaaS peers remains relevant. 

As SaaS companies strive to innovate and deliver more value to their customers, the integration of Generative Artificial Intelligence (Gen. AI) features presents a unique opportunity. By harnessing the power of Gen. AI, the technology provides unique opportunities to unlock revenue growth. In our recent Global Software Study, 73% of SaaS executives expect Generative AI to lead to more than 10% increase in revenue. Yet, for many…