There's another caveat to this, which is that even in places where usage-based pricing may be best, doing too much of it may lose the advantages.

An example from my experience: Datadog. It makes sense that we pay for usage, after all things like logging and metrics scale in wildly different ways from product to product, and charging flat rates or per-user rates doesn't factor this in well enough. The problem is that for a feature-complete Datadog deployment, there may be 10-20 axes of pricing – how much log data, how many unique metrics, how much of your logs do you want to index, and so on.

The problem comes with cost estimation. Because there are so many axes, we can't just take our size and figure out a cost estimate, we have to model out different scenarios. Does a traffic spike for us equal a logging spike? or Metrics? How does it impact second order pricing like log indexing or archival? Even when you know exactly how much, e.g. logging you generate, it's still all approximated modelling, and many teams won't have the necessary input numbers at the beginning anyway.

Stripe's usage-based pricing works well because it's so direct – it's just X% of revenue. Datadog's is a pain because there are many factors, all of which are quite far removed from revenue.

I understand that at some level this is required. They're pricing for compute and storage, essentially, and a cloud provider offering those wouldn't price them at a flat rate or per-user rate, but it always felt much harder than it needed to be. I'd almost have rather paid more, but a known amount.

However,

> The problem comes with cost estimation. Because there are so many axes, we can't just take our size and figure out a cost estimate, we have to model out different scenarios. Does a traffic spike for us equal a logging spike?

In the case of Datadog it’s even worse that they don’t allow you to cap costs. If you have an accidental spike (e.g. some deployment gone haywire and relaunching containers and suddenly you have 100x the amount of containers as usual in a 1 hour time span), they will not refund it. I had to plea a lot for me as a solo developer, and they ended up locking me into a 1 year contract in order to be reimbursed.

I’m convinced it’s entirely deliberate and they prey upon these types of things. It was a terrible, hostile experience, because I had to pay a huge sum I did not get any value out of. I was so scared of using their product for the rest of the year that I simply wrote off the yearly subscription as a loss.

> I’m convinced it’s entirely deliberate

I'm sure it is too.

My colleagues are investigating Datadog as a vendor and I think they're off their heads. We're meant to be tightening our belts and I think we'll waste a metric fuck ton of money on Datadog for a gram of value. Hopefully we don't go with them.