called several times After several years as General Manager of Amazon Web Services, my team launched two Tier 1 services: Amazon CloudSearch and Amazon OpenSearch.
Like all AWS products, they have scaled with the dynamics of the Product Led Growth (PLG) market. There were no gating features or subscription tiers to choose from. Instead, a usage-based pricing (UBP) model has always been used, charging based on consumption and directly correlated to the value provided to users.
When AWS hit the market in 2011, it pioneered the product-driven movement by offering an entire suite of services on a fully pay-as-you-go basis. It was not a required bundle or gatekeeping account manager. In 2011, AWS was far ahead of its time. Only recently have companies of all sizes started to pivot to a product-led movement.
Usage-based pricing is an integral part of the PLG strategy. In fact, I believe you can’t have a true PLG without UBP. To be truly product-driven, there must be no friction in adopting products to deliver value. The door is wide open and should allow new users to enter and use the tools.
A successful product-driven strategy requires real-time awareness and deep visibility into what users are actually doing in your product, what features they use, and how they deliver value. is essential. The steps below are taken from the process I followed from day one of launching and scaling a service on AWS. This process removes emotion and intuition from pricing and product decisions, allowing customer use and consumption to drive decision making and scale your business.
When it comes time to make decisions about product packaging and pricing, the first place to turn is your metering pipeline for historical usage data.
Step 1: Invest in your instrumentation
Usage data is a fundamental building block of product-driven movement. Usage provides the intelligence that drives everything else, from pricing and packaging to sales, support contracts, and even product roadmap development. This data shows which features are driving traffic and adoption, and where efforts need to be scaled up to continue meeting user needs.
Most organizations cannot easily implement usage metering at scale, and their existing tool sets for monitoring and observability do not meet their requirements for complete accuracy and auditability. Metering solutions grew out of this need for a new category of technology that accurately tracks the usage of any resource at any scale, in real time, and makes this data available for analysis and reporting.
As new features and products are developed, we continuously equip them to curate a complete set of analytics and underlying usage data for business decisions.
Step 2: Make usage data available across your business
Consistently assess and ensure that departments have access to the insights they need to do their jobs. In product-led movements, products are the primary means of engaging with customers. Other go-to-market actions are designed to provide support. Roles across the organization can effectively leverage usage data with the right tools and strategies.
Make sure your meter data pipeline is the single source of truth for usage and consumption data. Care should be taken to identify the product and usage data that each role across the organization needs to be successful. Data must be indexed and accessible to authorized users.
