AI vs. SaaS: Transforming Software Pricing and Value Delivery with Steven Forth

Steven Forth is Ibbaka’s Co-Founder, CEO, and Partner. Ibbaka is a strategic pricing advisory firm. He was CEO of LeveragePoint Innovations Inc., a SaaS business.

In this episode, Steven explains how AI can significantly enhance software customization and pricing, enabling more precise value delivery for each customer. He emphasizes that while AI introduces new capabilities, it does not fundamentally change the core principles of pricing. 

 

Why you have to check out today’s podcast:

• Dive deep into the comparison between AI and the transformative impact of SaaS, providing valuable insights into the future of software pricing and delivery
• Understand value models and how AI can optimize pricing strategies
• Explore how AI can enable highly customized software configurations and pricing, making it easier to deliver and capture value tailored to individual customers

 

"Before they invest a lot of time and effort in developing or pricing their own AI, find out what their customers are already doing and how they're thinking about the problems."

- Steven Forth

 

Topics Covered:

00:47 - Skepticism as well as optimism regarding AI and addressing the hype surrounding AI

04:15 - Exploring how AI might impact software pricing compared to the changes brought about by cloud-based SaaS.

07:05 - The way AI can optimize software configurations and pricing based on individual value drivers for each customer

10:44 - Discussing how SaaS fundamentally changed software pricing compared to AI

14:11 - How AI, while it enhances capabilities and user experiences, does not fundamentally change the underlying principles of pricing

16:31 - What is a value model?

18:15 - Pricing being tied more closely to value with the rise of AI

23:27 - Steven's best pricing advice

 

Key Takeaways:

"The underlying ways that we think about pricing have not changed because of generative AI and will not change, but some of them we’ll be able to execute on much, much more effectively." - Steven Forth

"I think of pricing not as being something that is data-driven, but something that is model-driven." - Steven Forth

"AI is changing how we build, deliver, and experience the functionality that software and data can bring. But as it does that, it also opens new ways for us to think about the pricing of the applications and the data." - Steven Forth

 

People/Resources Mentioned:

• Pros: https://pros.com
• Microsoft: https://www.microsoft.com/en-ph/Don Norman: https://www.nngroup.com/people/don-norman/
• Jacob Nielsen: https://www.nngroup.com/people/don-norman/
• Totogi: https://www.totogi.com
• McKinsey: https://www.mckinsey.com
• Tom Nagle: https://www.linkedin.com/in/thomas-tom-nagle-2bb2288/
• Zilliant: https://zilliant.com
• Pricefx: https://www.pricefx.com
• Vendavo: https://www.vendavo.com
• Tomasz Tunguz: https://www.linkedin.com/in/tomasztunguz/

 

Connect with Steven Forth:

• LinkedIn: https://www.linkedin.com/in/stevenforth/
• Email: steven@ibbaka.com

 

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mark@impactpricing.com