Usage pricing leaving software vendors guessing what lands on the invoice
(2026/03/31)
- Reference: 1774954813
- News link: https://www.theregister.co.uk/2026/03/31/usagebased_billing_muddles_software_vendor_pricing/
- Source link:
Software companies are leaving money on the table because their core financial systems haven't kept pace with the way they sell pay-per-use services, which often now incorporate AI capabilities.
According to [1]a survey of 350 execs who work for software vendors, conducted by PwC UK and billing infrastructure biz m3ter, 44 percent of UK business leaders say they have trouble measuring the consumption of usage-based software.
PwC and m3ter claim this measurement blind spot leads to [2]revenue leakage – the gap between the value of what the company sells and the amount actually billed.
[3]
This can take the form of failure to capture usage data, like a subscription overage fee that isn't tracked. Or it might reflect out-of-date pricing information, or billing calculation errors.
[4]
[5]
M3ter claims that between 4 and 7 percent of annual recurring revenue is potentially at risk from unsophisticated bookkeeping.
AI services can compound the problem. As The Register has [6]noted , the pricing of AI software and services is often opaque and difficult to predict.
[7]
With regard to the way that AI complicates billing for companies that use it in their products, the research points to [8]PwC's 2026 CEO survey that found "only 30 percent of companies surveyed reported increased revenue from AI in the last 12 months."
"The monetization opportunity exists, but it is clear that converting AI capability into sustainable, auditable revenue remains a challenge," the PwC/m3ter report states.
"A useful comparison is with the cloud infrastructure sector," Griffin Parry, CEO and co-founder of m3ter, told The Register in an email. "They had similar challenges and over time they developed greater transparency, via both better pricing design and better accessibility of usage and spend data."
[9]
But the survey results aren't solely reflective of black-box AI billing – sometimes it's just inefficient business processes like tracking multiple product lines that combine seat-based and usage-based billing [10]in a spreadsheet .
[11]Anthropic struggling with Chinese competition, its own safety obsession
[12]OpenAI patches ChatGPT flaw that smuggled data over DNS
[13]Telnyx joins LiteLLM in latest PyPI package poisoning tied to Trivy breach
[14]SAP looking to pull more external data into its AI platform with Reltio acquisition
The PwC/m3ter survey found that 87 percent of respondents reported that their billing systems and their ERP or general ledger systems were not integrated. And 48 percent said there was no integration between billing and CRM systems.
Parry argues that transparency is a key theme for corporate customers, in terms of pricing design and the accessibility of usage and billing data.
"Good usage pricing should be easy for customers to understand, easy for them to predict (i.e. they can estimate how much they'd pay in real world scenarios), and with the variable element attached to a good proxy for value (i.e., so that if they use more of your service, they'll associate that with being successful)," said Parry. "That's one way of interpreting transparency, the opposite of opaque."
Parry went on to say that customers won't be satisfied with one monthly invoice that summarizes usage-based spending.
"Instead, they'll want to be able to access information about their usage and spend on a near-real-time basis, and for this data to be detailed – i.e., they want access to a usage and billing dashboard, as, say, AWS customers do," he explained. "That's the other way of interpreting transparency, access to the data that drives bills." ®
Get our [15]Tech Resources
[1] https://www.m3ter.com/blog/m3ter-and-pwc-uk-survey
[2] https://www.m3ter.com/product/fix-revenue-leakage
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2025/09/10/ai_software_licensing_immature/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.pwc.com/gx/en/issues/c-suite-insights/ceo-survey.html
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.m3ter.com/customers/regal
[11] https://www.theregister.com/2026/03/28/miss_anthropic_not_those_who/
[12] https://www.theregister.com/2026/03/30/openai_chatgpt_dns_data_snuggling_flaw/
[13] https://www.theregister.com/2026/03/30/telnyx_pypi_supply_chain_attack_litellm/
[14] https://www.theregister.com/2026/03/30/sap_reltio/
[15] https://whitepapers.theregister.com/
According to [1]a survey of 350 execs who work for software vendors, conducted by PwC UK and billing infrastructure biz m3ter, 44 percent of UK business leaders say they have trouble measuring the consumption of usage-based software.
PwC and m3ter claim this measurement blind spot leads to [2]revenue leakage – the gap between the value of what the company sells and the amount actually billed.
[3]
This can take the form of failure to capture usage data, like a subscription overage fee that isn't tracked. Or it might reflect out-of-date pricing information, or billing calculation errors.
[4]
[5]
M3ter claims that between 4 and 7 percent of annual recurring revenue is potentially at risk from unsophisticated bookkeeping.
AI services can compound the problem. As The Register has [6]noted , the pricing of AI software and services is often opaque and difficult to predict.
[7]
With regard to the way that AI complicates billing for companies that use it in their products, the research points to [8]PwC's 2026 CEO survey that found "only 30 percent of companies surveyed reported increased revenue from AI in the last 12 months."
"The monetization opportunity exists, but it is clear that converting AI capability into sustainable, auditable revenue remains a challenge," the PwC/m3ter report states.
"A useful comparison is with the cloud infrastructure sector," Griffin Parry, CEO and co-founder of m3ter, told The Register in an email. "They had similar challenges and over time they developed greater transparency, via both better pricing design and better accessibility of usage and spend data."
[9]
But the survey results aren't solely reflective of black-box AI billing – sometimes it's just inefficient business processes like tracking multiple product lines that combine seat-based and usage-based billing [10]in a spreadsheet .
[11]Anthropic struggling with Chinese competition, its own safety obsession
[12]OpenAI patches ChatGPT flaw that smuggled data over DNS
[13]Telnyx joins LiteLLM in latest PyPI package poisoning tied to Trivy breach
[14]SAP looking to pull more external data into its AI platform with Reltio acquisition
The PwC/m3ter survey found that 87 percent of respondents reported that their billing systems and their ERP or general ledger systems were not integrated. And 48 percent said there was no integration between billing and CRM systems.
Parry argues that transparency is a key theme for corporate customers, in terms of pricing design and the accessibility of usage and billing data.
"Good usage pricing should be easy for customers to understand, easy for them to predict (i.e. they can estimate how much they'd pay in real world scenarios), and with the variable element attached to a good proxy for value (i.e., so that if they use more of your service, they'll associate that with being successful)," said Parry. "That's one way of interpreting transparency, the opposite of opaque."
Parry went on to say that customers won't be satisfied with one monthly invoice that summarizes usage-based spending.
"Instead, they'll want to be able to access information about their usage and spend on a near-real-time basis, and for this data to be detailed – i.e., they want access to a usage and billing dashboard, as, say, AWS customers do," he explained. "That's the other way of interpreting transparency, access to the data that drives bills." ®
Get our [15]Tech Resources
[1] https://www.m3ter.com/blog/m3ter-and-pwc-uk-survey
[2] https://www.m3ter.com/product/fix-revenue-leakage
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2025/09/10/ai_software_licensing_immature/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.pwc.com/gx/en/issues/c-suite-insights/ceo-survey.html
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33acvvpHOnVDD5Avo-FsVbRwAAAYI&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.m3ter.com/customers/regal
[11] https://www.theregister.com/2026/03/28/miss_anthropic_not_those_who/
[12] https://www.theregister.com/2026/03/30/openai_chatgpt_dns_data_snuggling_flaw/
[13] https://www.theregister.com/2026/03/30/telnyx_pypi_supply_chain_attack_litellm/
[14] https://www.theregister.com/2026/03/30/sap_reltio/
[15] https://whitepapers.theregister.com/
Re: IMHO, "Usage Pricing" is...
AMBxx
But it's all laid out clearly in that 1000 page licence document.
Re: IMHO, "Usage Pricing" is...
Doctor Syntax
Your chatbot of choice will summarise it for you at the cost of only a few months' worth of tokens.
Re: IMHO, "Usage Pricing" is...
Robert 22
Printed in a 2 point font.
Re: IMHO, "Usage Pricing" is...
trevorde
It's Oracle, isn't it?
So I paid
Yet Another Anonymous coward
A whole cow for these 3 magic beans but I have to pay another cow for the licence to plant them?
Snapper
What's the chance a disgruntled worker could cost his/her employers a huge chunk of change!
That's an ad
JacobZ
That's an for m3ter via a "report" they commissioned from PwC that astonishingly concludes that people should be using m3ter's products.
Re: That's an ad
Tron
I think most of us would take it as a good reason to avoid usage pricing. You have to wonder how much stuff corporates are doing simply because the software exists to do it, but which is in fact entirely inessential to the basics of making a profit. Tech as cosmetics. Persuade the punters they need it, persuade them it will empower them and make them happier. Then take their money.
Most don't need more than a Works package and competent staff. They are getting played by the tech sector.
Re: That's an ad
Doctor Syntax
"Persuade the punters they need it, persuade them it will empower them and make them happier. Then take their money."
It's easier to do that than persuade them not to and let them keep their money.
It's expensive so it must be good is the guiding principle of the manglers.
IMHO, "Usage Pricing" is...
like giving the vendor a blank check/cheque and unlimited access to your bank accounts.