A Pricing Model for AIaaS : An analysis of a new AI personalization product within the edtech space

Sammanfattning: As pricing is vital for an organization’s marketing strategy, it is a significant area to consider for companies offering new products where Artificial Intelligence as a service (AIaaS) is provided. The purpose of this study was to investigate possible pricing models for an AIaaS product. The study was delimited to the edtech industry. The main research question to be investigated was “What pricing model should an AI-company have for its B2B personalization product to correspond to the value delivered by it?”. Sub-research questions consisted of how perceived value can be related to price, what factors the organization should consider for the pricing model and the implications of implementation. The exploratory research was carried out through a literature review, a survey where Van Westendorp’s Price Sensitivity Meter was applied, as well as in-depth interviews to gather qualitative data. The quantitative results showed that the price sensitivity depends on the number of monthly active users a platform has, where there is a negative relationship between the number of monthly active users and the price willing to pay per learner. The qualitative results showed that the perceived value depends, amongst other factors, on which segment the buyer belongs to. The primary results were discussed with the findings from the literature review, which mainly consisted of pricing model for Software as a Service (SaaS) products, that resulted in a designed pricing model for AIaaS providers. The conclusion of the study is that pricing an entirely new product is complicated as the buyer does not know the value of the product. Also, there does not exist one single value which can be quantified and translated into price; the price must be adjusted according to the segment’s perceived value. The pricing model presented accounts for adjustable variables needed to be considered by an AIaaS provider before determining a price. Key-words: AI, AIaaS, edtech, education technology, personalization, price, pricing, pricing strategies, pricing models, pricing tools, pricing AIaaS, software pricing, pricing for new