Freshworks CEO Dennis Girshman... — no, the source names no first name.

Freshworks' chief executive has forecast that SaaS pricing will evolve from seat-based licences to consumption-based models, according to a report published by BusinessLine. The statement is the strongest signal yet from a major customer-software vendor that per-seat billing — the default SaaS pricing mechanic for two decades — is losing fit with how buyers now consume software.

The claim matters for product managers because pricing is a product decision, not just a finance one. Under a seat-based model, revenue scales with headcount: a customer pays a fixed amount per user per month. Under consumption-based pricing, revenue scales with usage — API calls, tickets resolved, tokens processed, or workflow runs. The two models create very different incentives for packaging, onboarding and roadmap prioritisation.

Why is the shift happening now?

The BusinessLine report frames the CEO's forecast around the broader pressure AI is placing on SaaS economics. When software output is generated by agents rather than operated by people, the number of human seats stops tracking the value delivered. A customer running automated support workloads may use one dashboard login while consuming thousands of units of compute and inference. Seat counts undercount that value; consumption meters capture it.

The transition also follows well-documented precedent. Snowflake built its business on consumption from the start; Amazon Web Services bills on usage; and in the DevOps segment, vendors moved from per-server to usage-linked licences years ago. Freshworks' position suggests the same migration is reaching mainstream business applications — CRM, support desks, IT service management.

What does the change mean for product teams?

For product managers at SaaS companies, a move to consumption pricing changes three working assumptions:

• Metric design becomes a core product artefact. The team must choose the unit of consumption that customers perceive as fair and that the vendor can meter reliably. Poor unit choice — one customers cannot predict — drives churn in procurement reviews.
• Revenue forecasting shifts from headcount data to usage telemetry. Finance asks product for usage curves, elasticity data and expansion cohorts, not seat-count renewals.
• Packaging loses its anchor. Tiered seat bundles translate poorly to usage; teams must rebuild tiers around minimum commitments, included quotas and overage rates.

The failure modes are real. Consumption pricing can suppress adoption in its first months: buyers fear unpredictable bills and throttle usage, which suppresses the very expansion the model depends on. Enterprise procurement departments often prefer fixed seat costs for budget certainty, so hybrid contracts — committed floor plus consumption overage — frequently become the practical landing zone.

When does the framework hold — and when does it break?

Consumption pricing fits products where usage correlates with delivered value and metering is technically clean. It breaks where usage is bursty and value is steady — a customer that runs a monthly batch job gets volatile bills for flat outcomes — or where usage is driven by a few power users who cost the vendor little but inflate the customer's invoice.

Seat-based pricing still holds where the product's unit of value genuinely is the person: collaboration tools, admin consoles and role-specific workflows. The forecast from Freshworks implies those categories will narrow, not vanish.

What comes next?

The direction is set. As AI agents take over tasks that people once performed inside SaaS tools, expect the 2025 pricing debate to move from whether to charge on consumption to which metered unit wins — and how vendors like Freshworks restructure their existing seat-based contracts without triggering a renewal-cycle backlash.