Consultant says software vendors risk hiking prices without cutting costs or boosting productivity

Software vendors keen to monetize AI should tread cautiously, since they risk inflating costs for their customers without delivering any promised benefits such as reducing employee head count.

The latest report from McKinsey & Company mulls what software-as-a-service (SaaS) vendors need to do to navigate the minefield of hype that surrounds AI and successfully fold such capabilities into their offerings.

According to the consultancy, there are three main challenges it identifies as holding back broader growth in AI software monetization in the report “Upgrading software business models to thrive in the AI era.”

One of these is simply the inability to show any savings that can be expected. Many software firms trumpet potential use cases for AI, but only 30 percent have published quantifiable return on investment from real customer deployments.

Meanwhile, many customers see AI hiking IT costs without being able to offset these by slashing labor costs. The billions poured into developing AI models mean they don’t come cheap, and AI-enabling the entire customer service stack of a typical business could lead to a 60 to 80 percent price increase, McKinsey says, while quoting an HR executive at a Fortune 100 company griping: “All of these copilots are supposed to make work more efficient with fewer people, but my business leaders are also saying they can’t reduce head count yet.”

Another challenge is scaling up adoption after introduction, which the report blames on underinvestment in change management. It says that for every $1 spent on model development, firms should expect to have to spend $3 on change management, which means user training and performance monitoring.

The third issue is a lack of predictable pricing, which means that customers find it hard to forecast how their AI costs will scale with usage because the pricing models are often complex and opaque.

To address these, McKinsey focuses mainly on how software firms should structure their pricing in the age of AI, rather than the wisdom of infusing AI into everything in the first place.

The report considers it unlikely that the traditional per-user monthly subscription model will disappear entirely, but expects that vendors will have to incorporate some form of consumption-based pricing into the mix.

Many are starting with hybrid models, where “additional” consumption that goes beyond a capacity cap is treated in different ways, such as metered throughput that limits the number of tokens processed daily, weekly, or monthly for certain models.

However, firms with hybrid models will need to revisit their choices frequently, it warns, as the rapid pace of AI evolution means that capabilities that are cutting-edge at launch can quickly become table stakes.

Vendors also need to choose their pricing unit carefully, whether that is a per-user flat fee with a capacity cap, like Microsoft Copilot, on a per-task basis, or perhaps on an outcome basis, such as per qualified lead for sales tools.

However, McKinsey also claims that the cost of inferencing is dropping rapidly, and so vendors need to consider carefully how they balance charges with growing adoption. The cost of large language model (LLM) delivery has declined by more than 80 percent per year over the past two years, it says.

Many SaaS companies believe they need to encourage trials to increase adoption, by offering free initial usage allocations for AI capabilities, for example. Once customers adopt and see value, the thinking goes, the firm can then look to upsell to a higher allocation for additional use cases. The problem with that, of course, is that one MIT study found that many enterprise organizations have so far seen zero return from their AI efforts.

Buyers are also changing, McKinsey believes. It says purchasing decisions are shifting from the IT department to line-of-business units. These leaders are increasingly making budget trade-offs between head count investment and AI deployment, and expect vendors to engage them on value and outcomes, not just features.

That could be a tricky sell, when trials of AI tools such as Microsoft’s Copilot by a UK government department reveal no discernible boost in productivity. Still, the AI firms have to recoup all those billions they’ve already invested somehow, don’t they? ®

Source:  https://www.theregister.com/2025/10/09/mckinsey_ai_monetization/?td=rt-3a

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Russia has warned that all messenger apps are riddled with backdoors deliberately installed for spy agencies and intelligence services, making them completely transparent to the global surveillance state.

Kremlin spokesman Dmitry Peskov has revealed that people sharing sensitive information on these apps must wake up to the risks, declaring, “All messengers are absolutely transparent systems, and people who use them should understand that they are transparent… to the security services.”

Rt.com reports: He added that it is particularly important to consider the risks when sensitive government or commercial data is shared through these apps, which can be accessed by foreign intelligence services.

Peskov was commenting on Telegram and WhatsApp in Russia, as well as the Russian government’s support for developing a domestic messaging platform.

Source: https://thepeoplesvoice.tv/russia-warns-all-messenger-apps-have-backdoors-for-spy-agencies/

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In late June, the European Union launched a pilot project to test a prototype age verification app in five member states: Denmark, France, Greece, Italy and Spain.  The excuse?  To protect children online.

The app is built on the technical specifications of the upcoming European Digital Identity Wallet and is designed to be open-source, user-friendly and secure.  However, as Take Back Our Tech notes, it is less secure than other options. Additionally, age verification can only be made using Google-approved Android devices or on iPhones, effectively requiring a Google or Apple account.

What this means is: If you are in the European Union and have de-Googled your phone, you will not be able to verify your age.

On Monday, Take Back Our Tech (“TBOT”) published a video with an accompanying article to raise the alarm about an age verification app that the European Commission is trialling in five European countries.

The Commission presents the app as a private solution to age verification. But there’s one catch: they recommend the app use Google attestation, meaning that it won’t work on alternative phones, TBOT warned.

The app will only work on Google phones because it enforces Google attestation, even though it’s less secure.  Everyone in the EU may be forced to use Big Tech phones when using apps integrated with this age verification system.

In the video below, TBOT’s Hakeem Anwar explains more and shows what app developers think about the European Commission’s latest move in its Digital ID programme.

EU Breaks Its Own Law, Forcing Use of Google for Age Verification | Take Back Our Tech, 11 August 2025 (5 mins)

If you are unable to watch the video above on Rumble, you can watch it on Substack HERE or Odysee HERE.

EU Breaks Its Own Law, Forcing Use of Google for Age Verification

By Take Back Our Tech, 11 August 2025

Earlier this month, the European Commission rolled out a new app and framework for age verification.  It’s intended to be used by other apps that require age verification checks.

The EU loves to present privacy as one of its principles. So their system is open-source and attempts to minimise data leakage.

Here’s how it works:

• EU member states can develop on top of this app to create their own age verification apps.
• They publish it to the app stores in their country.
• Other apps on the phone can request age checks.

The requesting party will receive a simple “yes” or “no” answer with little additional information, a design choice aligned with the EU’s design principles.

But there’s one problem. This app requires the Play Integrity API, which is a service run by Google to check whether a phone is running a Google-approved version of Android.  It excludes alternative operating systems like GrapheneOS and other degoogled OS’.

The open-source app was published on GitHub, and developers quickly took note of this section in the README:

The point of note is the Google Play Integrity API, which the EU has indicated will be part of the app.

Originally released in May 2025, any app developer could choose to implement it into their app.  When activated, your phone communicates with Google Play servers, which sends a response back about:

• whether the app is genuine,
• whether it’s installed from the Google Play store, and
• whether the phone is running a licensed Android OS (commercial partnership with Google).

Essentially, it’s a check to see if you’re in Google’s walled garden with a Google Account or one of their partners like Samsung.

If an app chooses to use this API, then de-Googled phone users cannot use it – whatsoever. Therefore, if it’s a requirement for age verification in the EU, then those apps will be unusable for anyone on de-Googled phones.

Daniel Micay, founder of GrapheneOS, also created an issue on the same project with lots of support.

Micay was quick to point out that the Android Hardware Attestation API would be more secure, while cutting out Google’s monopoly.

It’s a hardware-based API which doesn’t need to communicate to an external server. It checks:

• Authenticity/integrity of the hardware
• Authenticity of the operating system to ensure current security updates
• Authenticity of the app

The EU is ignoring a more secure option in favour of one that doesn’t even check if the phone is still receiving security updates.

They are enforcing Google’s monopoly while neglecting security.

Since Google’s Play Integrity API was released, many large companies have started to enforce the checks in their apps. The most common are banking, financial and government apps.  De-Googled phone users have workarounds such as loading the service from their browser or from their computer.

Despite overwhelming support from hundreds of developers requesting to remove the Google Play Integrity API requirement, the EU representative developers brushed it off and said they only created a reference implementation and member states would be able to make their own choices.

Then a few weeks later, they deleted that portion of the README, replacing it with this:

As Micay points out, ironically, another EU regulation – the Digital Market Act (“DMA”) – forbids upholding a monopoly on a foreign technology provider. According to the DMA, this requirement would be illegal.

Conclusion

Developers around the world are in agreement. Get rid of the Google dependency.  They reasoned, provided “better” digital ID solutions, pleaded and cajoled the project, asking other developers to reach out to their EU representatives.

If you know my show, then you know I think that’s not going to work. I reminded everyone on the thread that this is happening everywhere in the world.  Software companies will abide by their investors and financial firms, who are headed by the very same people who attend the annual Davos and Bilderberg meetings.

I’m grateful to have watched Chapter 17 of Derrick Broze’s ‘The Pyramid of Power’, which was the perfect preface to researching this issue. [Note from The Exposé: You can watch the first 16 Chapters of ‘The Pyramid of Power’ on YouTube HERE and Odysee HERE, and find a list of chapters HERE.]

It doesn’t matter what country you’re in. It’s happening everywhere.

Everyone who is using, or wants to use a phone detached from Google in the EU is under threat of being cut off from basic services.

We need to start rebuilding the world’s tech services in a way that can’t be controlled or taken over.  Agorism and voluntaryism is the way.

Source:  https://expose-news.com/2025/08/15/if-you-have-de-googled-your-phone/

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