Usage based pricing with cap from Appsmith

Usage-based pricing is loved by devs. But has its own problems.

Ok, so first what are those problems?

Value metric:

  • users don't understand your value metric
  • even when they do, they cannot map it to their usage patterns.

Predictability and procurement:

  • it is easier to predict the headcount than the usage
  • per user pricing is obvious, everyone across the org understands it

But devs love usage-based pricing:

  • it is "fair", you pay for what you use
  • you can scale up/down as you need

It is great for a dev tool company:

  • you align user adoption, the value created, and monetization
  • as org-wide usage so does the invoice

But pulling it off is not as easy as you may think.

Choosing that value metric, packaging it, and presenting it is a struggle.

@Appsmith solved it in the following way:

  • give people an option to go with a usage-based pricing
  • but cap a per-user cost at $X a month
  • it guarantees a better deal than a flat per-user pricing
  • but gives you the predictability of a per-user pricing

Very interesting approach.

  • See Appsmith pricing