Team plan pricing · CFO and Head of Product · Thursday 29 October
Charge heavy users, not every seat
We recommend option B: keep $12 per seat and add a usage add-on.
Approve option B on Thursday so billing can start the 6-week metered build. With 30 days’ notice, charges would begin around 9 January. A $15 price (A) and waiting six months (C) are set out fairly in the slides that follow.
Team margin fell 9 points, driven by heavy users
Gross margin on Team dropped from 78% to 69% in 12 months, mostly from storage and AI usage costs.
Those costs are concentrated: one workspace in ten drives more than half of them.
We ranked margin first, then customers, then speed
Recover margin
The 9-point drop is why we are reviewing price at all.
Keep customers
In 2023, moving from $10 to $12 lost 6% of workspaces in three months.
Time to take effect
Each month at 69% costs us, but every option resolves within six months.
Three options trade margin, customer risk and speed
| A · $15 per seat | B · Usage add-on | C · Wait 6 months | |
|---|---|---|---|
| Who pays | All 4,100 workspaces pay 25% more | About 12% of workspaces, above 50 GB or 500 AI actions per seat | No one |
| Margin | About 74–75%, if usage costs hold | Recovers cost from the heaviest users; amount depends on their overage | Stays at 69%, or falls further |
| Churn risk | In 2023, 6% of workspaces left | Limited to heavy users | None now |
| In effect | About 5 weeks | About 10 weeks | Decision in April |
A $15 price lifts revenue even if 6% leave
Option A is the surest revenue gain: +$77,500 a month even with 2023’s loss rate.
This rise is 25%, against 20% in 2023, so losses could be larger; A earns less than today only if 20% leave. Restoring 78% by price alone needs about $16.90 per seat. Margin figures assume usage costs stay where they are.
A takes effect in December, B in January
Both need 30 days’ notice after billing is ready. Dates assume work starts after Thursday and nothing else delays billing.
B asks more of about 490 workspaces, not all 4,100
B puts the charge where the cost is and leaves 88% of workspaces untouched.
That avoids repeating 2023, when a smaller rise lost 6% of workspaces.
B gives up speed and certainty for fewer losses
- What we give up
- Five more weeks at 69% margin, and a gain we cannot yet size.
- Best case against
- A is simpler, faster, and beats today unless a fifth of workspaces leave.
- How easy to undo
- Add-on terms can be eased later; a list-price rise is harder to reverse.
- What would change our mind
- Finance sizing showing the add-on earns less than A would after a 6% loss.
The biggest risk sits with our largest customers
- Large accounts
- Two of our five largest Team customers have asked sales about annual price locks, and may be among those B charges; talking to both before notice limits surprise.
- Billing slips
- If the metered build runs past 6 weeks, January slips; A remains a fallback that needs one week.
- Waiting
- C keeps every option open but leaves margin at 69% or lower until at least April.
Approve option B on Thursday to start billing work
- This approves
- Keeping Team at $12, and six weeks of billing team work on metered usage charges.
- This does not commit
- Customer notice, which waits until billing is ready and the add-on revenue is sized.
- Price locks
- Should sales offer annual price locks to the two large customers who asked? Their answer shapes how they take any change.
- Owner
- Who should own the rollout across billing, sales and support? It needs one person accountable.