In enterprise software-as-a-service (SaaS), usage-based pricing, a pricing mannequin wherein prospects are charged solely once they use a services or products, is gaining floor. According to a report from VC agency OpenView, ~60% of SaaS companies supply some type of usage-based pricing right this moment. Not too long ago, Apigee, Google Cloud’s API administration platform, made the shift, as did vertical software program big Autodesk.

However whereas usage-based pricing has its benefits, it may be more durable to maintain tabs on from a billing perspective. Usually, corporations paying for usage-based-priced merchandise battle to determine what to invoice their very own prospects for mentioned merchandise.

“This can be a new problem for engineers, as they should construct a real-time infrastructure to place value management in place and combine utilization knowledge with product and income groups,” Peter Marton, co-founder and CEO of OpenMeter, instructed For Millionaires in an interview. “Actual-time knowledge is a problem from the patron aspect, too. A decent suggestions loop between prospects interacting with usage-based merchandise and the consumption mirrored on their billing and utilization dashboards is important for controlling spending.”

Marton skilled points with “metering,” as he calls it, firsthand whereas working at Stripe as a workers software program engineer. There, he bumped into blockers gathering usage-based pricing knowledge from totally different suppliers and infrastructure and aggregating and analyzing this utilization collectively.

Looking for an answer, Marton teamed up with András Tóth, an ex-Cisco software program engineer and Marton’s former colleague at RisingStack, a software program dev agency, to launch OpenMeter, which meters buyer utilization of apps.

As Marton explains, OpenMeter — constructed on Apache Kafka, an open supply toolkit for dealing with real-time knowledge feeds — processes “utilization occasions” throughout an organization’s tech stack. It then turns the occasions into human-readable consumption metrics, which it funnels to billing and finance dashboards in addition to buyer relationship administration databases for product and income groups to evaluate.

OpenMeter also can implement utilization and price limits. And it may well execute usage-based or hybrid pricing, permitting corporations to extra transparently invoice (no less than in concept) their prospects.

“OpenMeter is … constructed for engineers, and provides a composable structure to course of real-time utilization knowledge and management value,” Marton mentioned. “Enterprise corporations select OpenMeter for its composability. It’s arduous to exchange a long time of monetization infrastructure directly, so we constructed an answer that engineering groups can incrementally undertake.”

Considered one of OpenMeter’s monitoring dashboards.

Now, OpenMeter isn’t the one sport on the town in the case of distributors addressing metering dilemmas.

There’s Metronome, which lately raised $43 million for its software program that helps corporations supply usage-based billing, and Amberflo, which is constructing software units to remodel SaaS pricing with metered utilization. Elsewhere, M3ter furnishes SaaS companies with usage-based pricing options.

So what units OpenMeter aside? Nicely, for one, it’s open supply. OpenMeter’s software program is freely obtainable to make use of, with paid choices for enterprises preferring managed plans.

Marton implies that it’s additionally cheaper than the competitors — although he acknowledges that precise pricing continues to be be labored out.

“Rivals within the usage-based area solely cater to the income groups with a closed-source, billing-first method,” he mentioned. “OpenMeter focuses on the brand new era of AI corporations.”

In any case, OpenMeter has managed to realize a measure of early success, raking in $3 million from Y Combinator (which incubated it), Haystack and Sunflower Capital. Marton says that the corporate, which has 4 staff at current primarily based out of its San Francisco workplace, has “a number of” market-leader AI corporations as prospects — however wasn’t prepared to share their names.

“The financial downturn prompted corporations to have tighter management round spending, necessitating understanding per-user value and implementing utilization quotas, whereas income groups want to search out actionable insights in utilization knowledge to search out new income streams,” Marton mentioned. “It’s a tailwind for OpenMeter.”