Outcome-based pricing in IoT: a high-risk, high-return bet

In an interview at MWC Americas 2018, Head of IoT at Vodafone Americas, Ludovico Fassati, claimed that the company’s US strategy must include outcome-based pricing (OBP) for IoT customers. While not widely reported, there was further detail at Vodafone’s recent Industry Analyst Event. OBP differs from traditional pricing: instead of charging by traffic/volume or number of devices, it sets pricing for enterprise clients based on achieving jointly determined outcomes. This drives service providers to deliver on results but also encourages sharing of the investment burden between enterprises and service providers. Operators adopting OBP are placing a high-risk, high-return bet, signalling their ambition to compete as solutions providers among the likes of IBM, HPE and Accenture.