The D365 bookings drag is the detail that tells the whole story. Customers aren't churning. They're pausing because the pricing model underneath them is shifting and nobody knows what their bill looks like on the other side. That's the transition tax that every company moving from seats to consumption will have to eat, and Microsoft just showed everyone what the receipt looks like.
The part I keep sitting with is the agent problem. An agent doesn't buy a seat. But an agent also doesn't have a budget. A human user generates predictable consumption because humans have predictable work patterns. An agent generates consumption based on whatever it decides needs doing, and right now the cost governance for that is basically nonexistent. Moving to consumption pricing without solving consumption predictability just shifts the forecasting problem from the vendor to the customer.
Honestly the most important sentence in this piece might be the one about every startup regretting not making the transition sooner. That's not pricing advice. That's a warning about the cost of delay when the largest player in your market just gave everyone permission to move.
It seems AI giants have finally recognized the difference between employees paid hourly and employees paid salary. Hourly EEs are paid the same no matter what they produce - just be at a work station. Salaried EEs get paid for what they produce - not the hours they log. Not a new concept.
The D365 bookings drag is the detail that tells the whole story. Customers aren't churning. They're pausing because the pricing model underneath them is shifting and nobody knows what their bill looks like on the other side. That's the transition tax that every company moving from seats to consumption will have to eat, and Microsoft just showed everyone what the receipt looks like.
The part I keep sitting with is the agent problem. An agent doesn't buy a seat. But an agent also doesn't have a budget. A human user generates predictable consumption because humans have predictable work patterns. An agent generates consumption based on whatever it decides needs doing, and right now the cost governance for that is basically nonexistent. Moving to consumption pricing without solving consumption predictability just shifts the forecasting problem from the vendor to the customer.
Honestly the most important sentence in this piece might be the one about every startup regretting not making the transition sooner. That's not pricing advice. That's a warning about the cost of delay when the largest player in your market just gave everyone permission to move.
It seems AI giants have finally recognized the difference between employees paid hourly and employees paid salary. Hourly EEs are paid the same no matter what they produce - just be at a work station. Salaried EEs get paid for what they produce - not the hours they log. Not a new concept.