So, your procurement team just signed a massive enterprise contract for a new artificial intelligence suite.
They bought a license for every single employee in the building. The sales rep promised it was going to revolutionize your workflows. The chief information officer is popping champagne.
I review enterprise software for a living, and I have some really bad news for you. You did not just buy a revolution. You just got played by the oldest pricing scam in the software industry.
I am talking about the absolute absurdity of per seat pricing in the era of generative intelligence.
Let us look at the actual economics of what just happened. For the last fifteen years, software as a service was predictably sold on a per seat basis. You hired a new account executive, you bought another Salesforce license. You hired a new designer, you bought another Adobe seat. This made perfect logical sense. Software used to be a digital workspace. Every single employee physically needed a login credential to enter that workspace and do their job. But artificial intelligence does not function like a database or a design canvas. It functions as an on demand reasoning engine.
I audit software utilization across dozens of Fortune 500 companies, and the data is brutal. AI adoption in any given enterprise is heavily, almost violently, skewed. The distribution is never equal. It is usually a ninety to ten split.
Roughly ten percent of your workforce will actually become true power users. These are the employees who take the time to learn prompt engineering. They will hit the language model hundreds of times a day. They will build complex workflows. They will automate their data entry, generate massive reports, and extract genuine value from the system.
The other ninety percent? Their usage graph is a literal flatline.
They will log in once during the mandatory human resources onboarding day. They will type a lazy prompt asking the machine to write a polite email to their boss. The AI will spit out something completely generic and robotic. The employee will roll their eyes, close the browser tab, and literally never touch the software again for the rest of the fiscal year.
AND YOU ARE PAYING FOR ALL OF THEM.
When you pay thirty or forty dollars a month for a license for all five thousand of your employees, you are heavily subsidizing the profit margins of the vendor. You are paying tens of thousands of dollars every single month for compute power that is absolutely never being consumed.
It is the gym membership business model. The gym only stays profitable because eighty percent of the people who pay the monthly fee never actually show up to use the treadmills.
Think about the sheer economic irony of this situation. The entire sales pitch of artificial intelligence is that it drastically reduces the manual labor required to execute a business process. An intelligent agent is supposed to allow one mid level financial analyst to perform the data processing work of three junior analysts.
If the software is actively designed to reduce the number of humans you need to throw at a problem, why on earth are you allowing the vendor to charge you based on your human headcount? It makes absolutely zero economic sense. It is a legacy pricing model duct taped onto a revolutionary technology because vendors are terrified of losing their predictable recurring revenue.
Let me give you a concrete example of how much money this is wasting. I recently consulted for a mid sized marketing agency with about four hundred employees. A major vendor quoted them a fortune for premium seat licenses so their entire staff could use a text generation interface. The executives were ready to sign it purely out of a fear of missing out on the trend. I told them to freeze the contract immediately.
Instead, we spent exactly one week building a custom, very basic internal web interface. We hooked it directly into the application programming interfaces of the major model providers. The team gets the exact same conversational capabilities. They get the exact same underlying intelligence.
The actual cost? About six hundred dollars a month in usage based billing.
When you pay per seat for an enterprise wrapper, you are paying a massive markup just for a generic user interface and a login screen. The smart companies, the ones who actually understand cloud economics, are flat out refusing these contracts.
They demand consumption based pricing. They tell the vendor they want to pay per token generated, per query executed, or per active monthly user. If an employee does not generate a token, the company does not pay a dime.
Stop letting tech companies tax your entire organization for a tool that only a fraction of them know how to use. This technology scales with compute power, not with human logins. Tell your vendor you want to pay for the engine fuel, not the passenger seats. If they refuse, walk away and build the interface yourself.