In a recent video titled "The Outcome Based Pricing Revolution In Tech Services," Ajit Ghuman, CEO and co-founder of Monetizely, discusses a fundamental shift occurring in the tech services industry. Ghuman explores how AI is disrupting traditional time-and-materials billing models and creating a new paradigm of outcome-based pricing that is transforming how tech services are delivered and monetized.
The End of Billable Hours: A Broken Model
For decades, one pricing method has dominated IT services: time and materials. This model charges clients based on the hours worked by staff at different skill levels. However, this approach has significant flaws, especially as technology evolves.
As Ghuman points out: "What happens when AI can do in minutes what human did in months? Welcome to the death of billable hours and the birth of outcome metric focused usage-based pricing."
The traditional billable hour model creates misaligned incentives between service providers and clients. As Ghuman notes, "One thing time and material rewards inefficiency. Doing a project faster theoretically means that you make less money unless of course you are willing to pad the hours."
This model also creates friction in the sales process. Instead of focusing on the value being delivered, clients get caught up comparing hourly rates:
"On many occasions it leads to a tough sales process where the customer instead of focusing on outcomes starts to feel resistance inside around the dollar per hour metric since the dollar per hour of a consulting firm service is very likely going to be higher than the buyer's hourly salary."
Four Forces Driving the Pricing Revolution
According to Ghuman, four powerful market forces are converging to dismantle the traditional time-and-materials model:
1. The AI Explosion
AI technologies are drastically reducing operational costs. Ghuman cites research showing that "McKinsey reports AI can reduce operational costs by 20 to 30%. Forrester says AI-based automation can cut costs up to 30%." When AI can perform tasks at a fraction of the cost of human labor, the economics become undeniable.
2. The Talent Apocalypse
Despite tech industry layoffs, there remains a significant talent shortage in IT services specifically. Additionally, wage inflation is accelerating, with "wage inflation has already hit 4.3% in 2025, with IT wages rising even faster."
3. The Productivity Mandate
Organizations are facing intense pressure to adopt AI technologies. Ghuman notes that "47% of C-suite leaders say the companies are too slow at adopting AI," and adds that "when competitors are delivering 10x faster at a tenth of the cost, survival demands radical change."
4. Customer Behavior Change
Client expectations are evolving rapidly as they become accustomed to AI-powered solutions. "They're done paying for human hours, which does not lead to outcomes. They want results, period," says Ghuman.
Globant's AI Pods: The New Pricing Model in Action
On June 5, 2025, Globant introduced a groundbreaking new model called "AI Pods" that exemplifies this shift toward outcome-based pricing. Ghuman explains:
"Each AI pod matches the potential outcome of a high performance team. Instead of hours, work is measured in tokens used, giving customers full traceability and transparency on the deliverables. The work is done by AI, but with the human supervision by a senior architect."
Globant describes their model as: "Scale up or down, swap capabilities, launch projects on demand, it's engineering streamed like content, delivered like magic, and always ready when you are. It's a radical departure from what anyone else in our industry is offering."
Measuring Outcomes, Not Hours
The new model requires defining specific, measurable outcomes for each type of work. Ghuman provides examples of what different AI pods might deliver:
Engineering Pod Outcomes:
- 99.5% successful deployments without rollbacks
- 99.9% availability SLA with automatic scaling
- Less than 2% bug rate in production
- 90% test coverage
Testing Pod Outcomes:
- 95% critical bugs caught before production
- 90+ percent automated test coverage across critical paths
- Zero critical vulnerabilities
This approach represents a fundamental shift in how tech services are measured and priced. As Ghuman explains: "You have to chunk out the work that you were doing before, call it the things that, you know, define the more repeatable things and now put guardrails around what is going to be the quality of this work and then tokenize it."
The New Pricing Structure
Globant's pricing model represents a departure from traditional hourly billing:
"They're offering subscription plus tokens. There is a monthly subscription fee for pod access, and then there is token-based metering like ChatGPT. So in a sense, customers will start to pay for outcomes and not hours. It will be transparent, predictable, and scalable."
According to Ghuman, the results speak for themselves. Globant's CTO Diego Tartara reports "projects are experiencing huge reductions in concrete efficiencies as in boosting productivity."
Three Strategies for Tech Services Companies
For tech services companies looking to adapt to this new paradigm, Ghuman recommends three key strategies:
1. Build Your Core Platform, Not Just Services
"Globant invested in the GE AI platform that does AI orchestration across everything… They need to start selling brains and they have to build a platform that orchestrate all of the different services that they are going to deliver for their customers… the platform becomes the differentiator, not the headcount."
2. Master the Hybrid Transition
"Don't flip the switch overnight. This is still not a model that you exactly know how it's going to work. You'll probably want to offer both models for some time, start with some pilot projects without compromising, find the most high volume, well defined task, and then start to measure it."
3. Redefine Your Talent Model
"The old pyramid scheme, armies of juniors and few seniors is going away. You'll need AI orchestrators. You'll need outcome architects, value engineers, one expert manning 10 AI agents replaces 50 junior developers. Hire differently. This is a completely new world."
The Future of Tech Services Pricing
The message from Globant's innovation and the broader industry trends is clear, as Ghuman concludes: "The age of paying for human time is gone, the age of paying for outcomes has begun. In this new world, you're either selling transformation or becoming irrelevant."
This transition to outcome-based pricing represents not just a shift in billing practices but a fundamental transformation of how tech services are conceptualized, delivered, and valued. Companies that embrace this change stand to gain competitive advantage through greater efficiency, transparency, and alignment with client goals.
For tech service providers, the choice is clear: adapt to this new model or risk becoming obsolete in an industry increasingly defined by the speed, efficiency, and value of AI-powered outcomes rather than billable human hours.