The true cost of consumption-based pricing: Why MAU models fall short and how to optimize for customers

Consumption-based pricing has become popular among SaaS and PaaS businesses, allowing customers to pay only for the resources they use. This approach offers flexibility and reduces waste, with pioneers like Slack and AWS successfully adopting it. However, not all consumption-based models are created equal. The Monthly Active Users (MAU) model, while appealing in its simplicity, often leads to inefficiencies and unexpected costs. This article explores the strengths and weaknesses of various consumption-based pricing strategies, and shares the journey Ably has taken to identify a model that truly prioritizes customer value.