Source URL: https://simonwillison.net/2025/May/13/end-of-ai-upsells/#atom-everything
Source: Simon Willison’s Weblog
Title: Atlassian: “We’re Not Going to Charge Most Customers Extra for AI Anymore”. The Beginning of the End of the AI Upsell?
Feedly Summary: Atlassian: “We’re Not Going to Charge Most Customers Extra for AI Anymore”. The Beginning of the End of the AI Upsell?
Jason Lemkin highlighting a potential new trend in the pricing of AI-enhanced SaaS:
Can SaaS and B2B vendors really charge even more for AI … when it’s become core? And we’re already paying $15-$200 a month for a seat? […]
You can try to charge more, but if the competition isn’t — you’re going to likely lose. And if it’s core to the product itself … can you really charge more ultimately? Probably … not.
It’s impressive how quickly LLM-powered features are going from being part of the top tier premium plans to almost an expected part of most per-seat software.
Via @jasonlk
Tags: startups, generative-ai, saas, ai, llms, atlassian
AI Summary and Description: Yes
Summary: The text discusses a shift in the pricing strategy of AI-enhanced SaaS products, particularly in light of advancements in large language model (LLM) capabilities. As LLM-powered features become standard rather than premium, vendors may find it challenging to justify additional costs, potentially leading to a reevaluation of AI pricing in competitive markets.
Detailed Description: The article by Jason Lemkin emphasizes a significant trend in the SaaS and B2B landscape concerning the integration of artificial intelligence into service offerings.
– Atlassian’s announcement signifies a broader industry movement where AI features are increasingly seen as standard components rather than premium add-ons.
– Vendors face pressure to keep pricing competitive, especially as more players enter the market with similar AI capabilities.
– The expectation for AI integration into basic service offerings reflects a maturation of the technology and a potential decline in the perceived added value.
– Customers may resist paying extra for features that have quickly become core functionalities, which can distort traditional pricing models.
Key Insights:
– The idea that AI features are becoming ubiquitous suggests that businesses must innovate and differentiate in other areas instead of relying solely on AI capabilities for higher profitability.
– This shift may impact funding, development priorities, and market positioning strategies for startups and established companies alike that leverage AI technologies.
– Understanding consumer expectations in the context of price and product offerings will be crucial for SaaS providers in maintaining competitive advantage.
Implications for Security and Compliance Professionals:
– As AI features become a part of standard offerings, it raises questions about data handling, compliance with regulations around AI use (like GDPR), and the security of these advanced technologies.
– Companies will need to ensure that their AI implementations are secure and comply with relevant data protection laws, which may involve updating privacy policies and security measures to address new functionalities.
– Security professionals must also be aware of the potential vulnerabilities introduced by integrating AI as a core feature and develop strategies to mitigate these risks effectively.
Overall, this trend may lead to significant changes in how SaaS products are developed, marketed, and secured in an increasingly AI-driven marketplace.