The Pricing Shift Reshaping Enterprise AI Spend - with Adam Mansfield of UpperEdge
AI is triggering a seismic shift in enterprise software pricing, moving from predictable seat-based models to complex hybrid and consumption-based systems that make budgeting nearly impossible. Adam Mansfield of UpperEdge warns that vendors like Microsoft, Salesforce, and OpenAI are structuring deals to maximize their own revenue growth—leveraging the 'flywheel effect' and 'hockey stick' curves—while shifting all financial risk onto customers. The result? Companies can face sudden, unforecasted bills of $50,000 to $100,000 per month when usage spikes, often with no refunds or carryover credits. What’s worse, vendors are still figuring out their own pricing models in real time, leaving buyers in the dark. The solution isn’t more negotiation tactics—it’s a strategic, coordinated pre-negotiation campaign. Leaders must proactively engage vendors at the C-suite level *before* any deal, demanding transparency on forecasting, overage costs, and ROI timelines. By aligning IT, business, and procurement teams to send a unified message, executives can force vendors to answer hard questions early, expose their weaknesses, and build leverage long before the contract is on the table. The real danger isn’t AI adoption—it’s adopting AI without a plan to control its cost.
AI pricing is shifting to hybrid and consumption-based models that make long-term spend unpredictable and financially risky.
Vendors are structuring deals to maximize revenue growth, not customer success, using flywheel and hockey stick dynamics that reward overuse.
Customers bear all risk—there are no refunds for overuse, and overage costs can spike to $50,000–$100,000/month with no warning.
The best leverage comes from pre-negotiation: engage vendors at the C-suite level *now*, before renewal, with a unified, coordinated request for transparency.
Audit current usage and value across all vendor products—know where you’re overpaying or underutilizing to build negotiation power.
…and 3 more takeaways available in PodZeus
The AI Pricing Revolution
Introducing the shift from seat-based licensing to unpredictable consumption-based models that are making enterprise AI spend nearly impossible to forecast.
Why Consumption Pricing Is a Trap
The rapid evolution of AI has left vendors and buyers figuring things out in parallel, creating a dangerous gap in transparency and risk allocation.
The Hidden Risk: Who Bears the Cost?
Consumption-based pricing shifts all financial risk to the customer, with no refunds, carryover, or transparency on overage costs.
The Vendor’s Incentive: More Usage, More Revenue
Publicly traded vendors are incentivized to drive consumption—AI reduces headcount but increases revenue, creating a conflict of interest.
The Hybrid Model: A New Layer of Complexity
Even seat-based vendors like Microsoft now embed consumption meters, creating hidden overage risks within bundled packages.
“And they're not going to just want snacks. They're going to want to literally have your house.”
“I'm not going to say intentionally created, but I'm going to say it was intentionally created. What do you mean by that? They don't want transparency because they win in the long run.”
“The sooner you do this, the sooner you start to create uncertainty and build that leverage I was talking about.”
Host
Guest
Adam Mansfield
person
Salesforce
organization
Microsoft
organization
Upper Edge
organization
AgentForce
product
ServiceNow
organization
Tableau
product
Anthropic
organization
OpenAI
organization
Adobe
organization
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