Is Value-Added Differentiation on the Horizon for SaaS Vendors?

Analyst(s): Keith Kirkpatrick
Publication Date: August 30, 2024

Genesys announced a new pricing structure for customers to access generative AI functionality across its Genesys Cloud offering. The offering utilizes a token-based approach to consumption and an hourly interacting license model. The company’s cloud-based generative AI capabilities include Predictive Engagement, Predictive Routing, Voice and Digital Bots, and Agent Copilot.

Is Value-Added Differentiation on the Horizon for SaaS Vendors?

Analyst Take: Genesys has announced two new pricing approaches: a token-based approach and an hourly consumption model. These approaches provide additional clarity around the value of generative AI technology and greater visibility into the potential cost of using the technology within several specific use cases.

Genesys, like other contact center-focused application providers, is banking on organizations using generative AI to reduce costs and improve customer experience. Generative AI can be used as a human-augmentation tool to drive greater efficiency through automated, fully digital experiences.

Companies are seeking out use cases for generative AI that can improve efficiency and productivity and drive better customer experiences. Futurum Intelligence projects that global spending on text generation, analysis, and summarization will reach $12.9 billion annually by 2028, up from $7.76 billion in 2023, reflecting a compound annual growth rate of 8.6%.

However, this spending on generative AI will be driven by a conservative, ROI-based evaluation of not only capabilities but also how these services are priced and delivered. Few organizations are comfortable with providing unlimited access to generative AI.

Token-Based Generative AI Licensing Model

Genesys is taking an interesting approach to pricing to make it easier for organizations to more closely link generative AI utilization with value. To this end, the company is using a token-based system to account for the usage of generative AI calls. The system enables organizations to measure usage with a single token-based meter, and users can adjust usage anytime as their needs change.

Genesys also revealed another pricing model, based on an hourly accounting of generative AI utilization, under which users will be charged only for the time they spend interacting with customers. This model allows companies to extend the value of the Genesys solution to their business by expanding the benefits of the platform beyond the contact center, extending across other use cases and scenarios.

What to Watch:

The key challenge Genesys faces in the future revolves around differentiation, with respect to generative AI. Although it is clear that generative AI provides massive productivity and efficiency benefits, compared with humans manually completing the same tasks, the market – and metrics used to compare and contrast generative AI services – will continue to evolve.

Shifting pricing models represent the next step in a market’s evolution. Most vendors are already offering AI-powered “copilots,” all of which are designed to address similar use cases or problems. Vendors such as Genesys are seeking to differentiate via pricing models and flexibility. The shift to value-added differentiation may be the next step along this journey, particularly when performance or value differentiators become minuscule and unimportant to customers.

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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.

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