How Does One Pay for AI? Maybe Cut Prices and Make Money on Volume? (I Have a Bridge to Sell You Cheap)
May 21, 2025
Just the dinobaby operating without Copilot or its ilk.
Mucho AI marketing from the Google and the Softies. Let’s shift gears and talk about discounts similar to Filene’s Basement sale. A change of pace may put the marketing drag racers in context.
Bloomberg, the terminal people who given Thomson Reuters headaches, published “Salesforce Cuts Slack Price for US Government, Following Google.” The write up explains that lower prices for government customers is now in effect. In my experience, price cutting to get US government sales often leads to some issues. The normal mechanisms involve responding to work in Congress related to appropriations for the coming fiscal year; that is, new money for 2026-2027, one-to-one interaction to move a problem to a Request for Information and then to a project to assist in formulating and writing a Statement of Work, putting bloodhounds on the trail of end-of-year unspent funds, and a couple of other methods.
Price cutting? Well, perhaps if certain conditions have been met. I don’t want to go into these, but you can ask around for individuals who have not had their career path altered with the special deal, lower prices, and annexes to cover what are often inevitable problems with the products or service given a price cut.
Why is this important? For most people, selling services to the US government is handled through specific methods. Fancy dancing is a topic for a luncheon meeting in some organizations, but it is not as popular as talking about Kentucky basketball or the new distillery on the Bourbon Trail.
I find it interesting that Google is cutting prices for the US government. I am not sure what Amazon is doing. There was a burst of activity several years ago, but now the chatter is Microsoft, Microsoft’s deal with Palantir, and Microsoft’s security posture. Google and Salesforce? Sure, maybe.
My concern with price cuts is that Google and Salesforce are infusing smart software into their products and services. Therefore, the investments in said smart technology have to return a profit. How does one return a profit with US government sales by cutting prices? Mind you, those cuts are coming as the pressure on firms to generate a return on their investments in smart software is looking like it is exponentiating. Imagine: Exponentiating text messages, emails, and maybe face-to-face meetings in actual physical conference rooms going up every day or so. Those automated calendars are not a pretty sight in my opinion.
Several observations:
- Price cuts. Hmmm.
- Get more government customers with a K-Mart blue light special. Hmmm
- Assurances of timely service. Hmmm.
Net net: Hmmm. Discounts. Okay.
Stephen E Arnold, May 21, 2025
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