Webinar Deck: Output-Based Pricing in Application Services: Adoption in the As-a-Service Economy

17 Oct 2019
by Abhishek Sharma, Achint Arora, Michel Janssen

On October 17, Everest Group hosted a webinar titled, "Output-Based Pricing in Application Services: Adoption in the As-a-Service Economy."

Despite decades of outsourcing experience, pricing models continue to be input-based, leaving little to no incentive for the sourcing teams to change or for service providers to propose new options. As the inexorable march toward the as-a-service economy continues, the input-based model is increasingly less effective in some areas. An output-based services consumption model is better suited to the overall cloudification of the IT estate.

In this session, Everest Group’s Pricing Assurance team leaders explore adoption of output-based models and offer insights on pitfalls to avoid if you’re considering this approach. We also introduce the different output-based benchmarks we see being contracted in IT application services.

Specifically, we answer these questions:

  • What are the distinct advantages of output-based pricing?
  • What key metrics are being tracked across application services engagements?
  • Where do we see early adoption of output-based pricing, and how should we drive behavior toward more widespread adoption?
  • What are the typical guardrails enterprises should have in place?

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