Diving overview:
- Oracle is expanding its token-based and outcome-based pricing models as it explores new ways to monetize its artificial intelligence capabilities, CEO Mike Sicilia said Wednesday.
- The company plans to offer a new usage-based monetization approach in addition to its existing subscription-based framework. Token-based pricing charges customers for AI usage, whereas outcome-based models tie pricing to the business results produced by those systems.
- “We’re simplifying the way customers use agent capabilities and pay,” Cicilia said on the earnings call. “Our new agency pricing is aligned with customer value.”
Dive Insight:
Cicilia said Oracle has begun a limited rollout of “proxy pricing,” which allows customers to purchase additional AI capacity through token bundles that can be used across the company’s suite of applications, with pricing models tied to specific business outcomes.
He said 33 customers, including Aon Services Corporation and Liberty Energy, pre-purchased token bundles during the quarter, providing access to advanced inference and AI models under the new structure.
The change reflects a broader shift in enterprise software toward hybrid pricing structures, as vendors seek to monetize generative AI capabilities that don’t fit into traditional per-seat licensing models.
A January report from Software-as-a-Service management company Zylo said AI and usage-based pricing are contributing to increased volatility in enterprise software spending, with organizations reporting unexpected charges as vendors stack usage-based fees on subscription contracts.
The study found that new pricing mechanisms and the monetization of AI capabilities have overtaken application sprawl as the main drivers of rising SaaS costs.
