Generative AI has the potential to boost workplace productivity, automating tasks such as drafting emails and providing meeting summaries. But deciding how much businesses should pay to access these tools can be a conundrum for software vendors.
“This is untested technology, both in terms of what it can do and how you can monetize it,” said Craig Roth, a research vice president at Gartner. “What you see is vendors experimenting: they’re trying [to balance] actually making revenue off of this with trying to negotiate some market positioning and competitive advantage.”
In the months since OpenAI’s ChatGPT launched, large language models (LLMs) have been applied to many software tools, with collaboration and productivity apps seen as a key use case. Common capabilities include automated note-taking during meetings, summarization of text chat and email transcripts, email draft generation, advanced document search, and even image generation for presentation slides.
Different pricing strategies have emerged for access to these features, with some vendors charging premium prices while others opt for lower costs in the hope of spurring uptake among business customers.
While it’s standard for software vendors to price similar services at different levels as they vie for market share and profitability, the relative novelty of generative AI brings some specific challenges. On one hand there’s the compute cost to process user queries and how quickly this cost might fall. Then there’s the question of what benefits these tools will actually provide to customers and, ultimately, how much organizations are willing to pay.
Altogether, settling on a dollar value means grappling with several unknowns. “It’s kind of a dance right now between the vendors and the customers to figure out what the right price point is,” said Roth.
Who’s charging what for genAI features?
A year on from the launch of ChatGPT 3.5, most office software vendors have at least announced plans to embed generative AI features within their products. In many cases, these tools are now accessible to at least to parts of their customer base.
Notion was one of the first productivity vendors to make its genAI features available, back in February, at an additional $10 per user each month.
Since then, a variety of genAI tools for office apps have hit the market, with varying approaches to how they are sold.
In some cases, a premium is charged. Microsoft, for example, launched its Copilot for Microsoft 365 to large customers in November, with a listed price of $30 per user per month on top of E3 and E5 subscriptions (and a minimum purchase of 300 seats). This provides access to Copilot functionality within its range of office applications, including Word, Outlook, and Teams. The price for smaller businesses is yet to be announced, with an SMB early access program currently underway.
Microsoft
Microsoft 365 Copilot can help a Word user draft a…
2023-12-15 06:00:03
Article from www.computerworld.com rnrn
