In a recurring payment model product innovation and pricing should be a bilateral process.

Cloud solution providers like to innovate and develop their products … and increase the price, even if it has not much value for the customers. Their innovation model is typically unilateral and inspired by the historical onetime payment money making loop of the best-of-class personal software companies:

1. Releases; a version of the software in which several functionalities are brought together, which is commercialized at a certain moment and is usually no longer supported from a certain moment
2. Upgrading; the process of bringing users from an older release to a new release in a commercially attractive way
3. Crossgrading; the process of bringing users of a similar but competitive product to a new release in a commercially attractive way
4. Bundling; bringing together different own software products in a commercially attractive way

All this innovation happened unilaterally and especially the last two elements caused legal discussions because of the market distortion. However, thanks to the onetime payment principle, it was the customer who determined the success of these unilateral innovations.

In the recurring payment model that’s inherent to cloud computing, the customer should be able to rely on stable conditions for cost forecasting and application portfolio management purposes. Commercially available features or changes that are subject to additional fees should not be enabled by default. The customer should be transparently notified before deployment and usage, or alternatively could actively opt-in. Customers should have the ability to review and granularly select the functionalities to deploy and use.

The nineth principle guarantees stability around cloud services and pricing; commercial models shall not be changed unilaterally and adhere to an active ‘opt-in’ principle.