The commission-based technology services distribution channel got a taste of outcome-based pricing this month, as one vendor shifted away from committed spend agreements.
AI agent provider Vida Global added result-based pricing to its existing menu of usage-based sales options on Oct. 5. A week earlier, the company signed an agreement with tech services distributor Avant in September to shift to an agency sales model. Hannah Pryfogle also signed on as founding director of channel development in September to lead partner efforts.
Vida Global offers AI employees for customer experience processes and back office operations and charges for approximately 20 specific business outcomes, CEO Lyle Pratt told Channel Dive.
“Whatever the customer's outcome that they want to pay for, we can bill them based on that and hold the agent accountable based on the results of that outcome, and also report on how the outcome was derived from start to finish,” Pratt said.
The company’s back office capabilities set it apart from vendors that put AI in the contact center, but its multi-domain capability constrains the types of partners Vida recruits.
“It has to be partners that are entrenched with their customers and want to make a wider impact than just one department,” Pryfogle said.
Vida joins an area of the channel where usage-based models are still developing and outcome-based models are rare.
Pryfogle said cloud contact center platform vendors have held the line on seat-based committed spend to avoid cannibalizing their business model. In the last several years, smaller vendors have bolted their AI voice agents into those larger platforms. Usage-based models have grown more common among those AI startups as they match pace with token-based frontier models.
Founded in 2022, Vida originally priced on consumption, but Pratt said it was tracking outcomes internally.
“It just made logical sense to go ahead and support billing for those outcomes as well,” he said. “Some of our customers that are still on usage-based billing, we still define outcomes in the backend and track those things and report on those things and monitor those things.”
The agreed-upon results vary by customer. Some use it to process invoices or enter information into a CRM, while others use it to resolve customer tickets.
Many businesses were already paying business process outsourcing firms for outcomes.
“They're going to get billed on closed tickets, or processed files or whatever, so it is very similar to that in many ways, and it aligns incentives, and that's the most important thing for long-term customer relationships,” Pratt said.
Vida is on the frontier of outcome-based pricing in the TSD arena, but others will likely follow. Microsoft defaulted Copilot pricing to usage-based earlier this year, creating a domino effect among independent software vendors, JSG CEO Janet Schijns told Channel Dive. It’s not just software vendors; C3 Technology Advisors CEO Matthew Toth pointed to Lumen tying partner commissions on internet bandwidth to a customer’s usage.
“You can make this argument that the world's becoming less commitment-based,” Toth said. “AWS 13 years ago said, 'Hey, just give me a credit card.'”
While usage-based is not the same as outcome-based, both create significant month-to-month variance in how much customers spend and what partners are paid.
For many tech advisors, it’s reminiscent of the rise of toll-free calling, where customers paid a flat rate and were then charged based on usage. Those bills were highly complex, Rise Technology Advisors Cofounder Eric Ludwig said.
“These bills were impossible to read, and as a company that was compensated on utilization, it is extremely difficult to forecast your revenues and profitability,” Ludwig said.
If usage-based and outcome-based pricing models proliferate, TAs have an opportunity to help CIOs predict their spend, Datamob SVP Kristy Thomas said. But in order for TAs to succeed, the vendors need to have the back office infrastructure in reconcile invoices and pay partners' commissions. Those were challenges in the toll-free days.
“What keeps me nervous in this discussion is that history repeats itself,” Thomas said. “Sometimes there was a way in which partners would get compensated. Other times there weren't for certain companies, and it does present risk.”
However, TAs say that if customers demand these models, they hope vendors will follow.
“If that's where the market is going, you best prepare yourself for it, and you best align with where a customer's preference is, rather than aligning with where your business preferences,” Ludwig said.
Unpredictable revenue could change how TAs staff their firms. It may require additional customer success managers or post-sales engineers, Toth said. Regardless, he believes the commission-based TA model can adapt.
“If you have these highs and lows, it probably does make it harder, but you can still do a business on it,” Toth said. “I'm just a roll-with-the-punches kind of guy. I can sit in front of the tide and say, ‘Stop now,’ or I can just be like, ‘All right, well, it’s a little higher today.’”
