It's a question as old as capitalism itself: How do you weigh a product's value against its price point?
The AI explosion over the past two years has prompted seismic cultural and ethical questions about its current use and immense potential in both our everyday lives and in the workplace.
In tandem, businesses introducing AI across their portfolios of products and services have spotted opportunities to either boost revenues by charging extra for AI capabilities or gain a major PR win by including them as part of established subscriptions at no extra cost. Microsoft is an example of the former with its $30-per-user-per-month Copilot for 365 add-on. Zoom, with its AI Companion available at no additional cost for those already with paid subscriptions, is a case study of the latter.
This AI Cold War sparked when Zoom CEO Eric Yuan spoke about AI Companion's successful integration across its collaboration services, notably citing its new Workplace solution and Zoom Contact Center during its most recent earnings call. Incurring “no additional cost” for customers with paid Zoom licenses, Yuan also stressed the distinction from competitors who do charge customers for AI features.
“I want to share with you that our customers really like Zoom AI Companion,” Yuan said in response to a Q&A question about AI Companion’s most common usage. "First of all, it works so well. Second, it is at no additional cost, not like some other vendors who have to charge the customer a lot.”
This, naturally, caused a stir online, facilitating a healthy debate around that central question — should UC and collaboration businesses charge their customers extra for AI features in products or subscriptions they already pay for?
"I don't actually have a problem with the vendors charging for it if it actually delivers the value," Zeus Kerravala, Founder and Principal Analyst at ZK Research, told UC Today during its most recent Big News Show. "I do think the industry needs different tiers. I think for your typical knowledge worker, if it even gets you an hour a week back, $30 a month, I've talked to some users; it's a no-brainer. It's the best deal out there."
"It underscores kind of a bigger issue, though, from a vendor community," Kerravala continued. "What becomes chargeable, and what should be part of the standard AI feature set? There are certain things we use, like virtual backgrounds. No one would think of charging for that, right?"
"Now, perhaps down the road, you might have enhanced ones or something like that where you could add a fee or whatever. Anything that then becomes advanced. So, you think of transcriptions versus meeting notes. Maybe transcription should be free, or meeting notes are chargeable because there's a little bit more intelligence in that." However, he added that it seems like a core part of the meeting platform.
Kerravala highlighted that the bigger question for the UC industry is how this gets monetised. He cautions against a future where every vendor in the UC space has to give everything away to keep their current licenses flat because that's "bad for everybody".
"It creates a deflationary effect where the vendors are throwing more and more money at R&D, but they're not making any more money, which in turn slows down innovation," Kerravala explained.
"I like Eric a lot, and I agree with a lot of things he said," he caveated. "In this case, though, I think he's a little off base. I do think there are certain aspects that you should charge for if they add enough value, and it's up to the vendor to make sure that the value is being added. But it does raise the bigger question of what should be chargeable and what should be a standard part of the feature set."
"I agree with you, Zeus, but where and when does that line get drawn?" suggested Craig Durr, Senior Analyst at Wainhouse Research. "Could it ever be perceived that, for example, as an industry, we're withholding features and charging for them when we could be giving them away for free? Is there any type of collusion or something like that? I don't know if it's going to go that far, but what you're getting to, I think, is very important.
Durr added that it is difficult to draw a line separating baseline entryway features from advanced features that deliver added value (and so justify an extra cost).
