For the longest time, SaaS companies offered vanilla subscription pricing models to their customers. Over the last few years, new SaaS models have emerged, where pricing is more closely tied to the value that customers receive from the product. Value is measured as a function of the customer’s usage of the product.
Typical examples of such companies include APIs ($ per API request), Storage ($/GB), Compute ($/compute minute), Communication ($ per email/SMS), Actions ($ per task automated) etc.
The complexity in usage based pricing plans, coupled with the non-trivial task of measuring usage and moving data between systems, makes the process of generating bills extremely tedious and time consuming.
In order to bill their customers, SaaS companies have to resort to manual, people intensive processes, or build custom in-house solutions, which requires significant engineering bandwidth. Third party tools built for the subscription economy (e.g. Chargebee, Zuora etc) don’t work well here, since they incorporate “usage” as an afterthought.