Eric Berridge's disruptive blog calling for value-based pricing models for cloud customers is featured on Wired Innovation Insights.

Over the past several years the cloud has completely disrupted enterprise software, providing a delivery model that has infinite advantages over the license, install, and support models of years past.

Yet customers today need more innovation, particularly in regards to costs of the cloud and how its various vendors charge for subscriptions to their technologies. Prices today are often set by a charge-as-much-as-possible mentality as opposed to a value-based approach. This should beg the question, "How much is this actually worth to my customer?"

The vast majority of cloud-based applications are sold on a per user subscription basis. However, given the troves of data that cloud application vendors collect about their customers, it is absurd that most subscription models are stuck in a per user construct. It is essential to note that a cloud application is a single database shared by all of its customers, and the interface is a web page where every single click and swipe is recorded as a transaction.

Couldn't That Data Be Used to Provide Value?

If I were the CEO of a publicly traded cloud application vendor, I might shudder at such a thought. Perhaps I'd be paranoid that the truth in the data might reveal a latent customer discontent: that my customers are actually getting less value than the subscription fees that are filling my coffers. After all, even if a customer’s users are only 50% productive, I would still receive 100% of my fees. With this mentality, cloud vendors are overlooking the single most influential buyer in most companies: the CFO.

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