Vercel · Strategy · Mid · 45 to 60 minutes

Should Vercel redesign infrastructure pricing?

Vercel is a platform for building, deploying, and running modern web applications. Answer this product management case and get it graded line by line against a weighted rubric.

Pricing strategy
Customer empathy
Trade off analysis
Go to market planning
Metrics

The situation

You are the PM for Vercel's infrastructure monetization area. The VP of Product and the finance lead have asked for a recommendation on whether the current usage based pricing model still fits the business. Today, some infrastructure costs are grouped into broad billing metrics, including areas related to bandwidth and serverless functions. That simplicity helped early adoption, but support tickets and sales conversations suggest a growing problem: customers, especially larger teams, struggle to see what drives their bill or what actions would lower it. At the same time, buyers increasingly compare Vercel's pricing to other infrastructure vendors and expect familiar, more specific usage measures. Changing the model could improve clarity and customer control, but it also risks confusion, invoice surprises, and damage to the self serve funnel if the pricing page becomes harder to understand. You need to propose a strategy for the next pricing update that balances transparency, trust, competitiveness, and revenue quality, while keeping the experience workable for hobby users and existing customers.

What to produce

Write a 1 to 2 page strategy memo.

Your answer must

State the decision to be made and the main customer and business problems with the current pricing model.
Compare at least two pricing directions, one that keeps broader bundled metrics and one that makes usage metrics more granular.
Recommend one approach and explain the trade offs across customer control, billing clarity, competitiveness, revenue quality, and operational complexity.
Describe a rollout and communication plan for existing customers, including billing timing, account owner outreach, and how the change would be explained simply.
Define success metrics and guardrails for the first 2 billing cycles, including at least one funnel metric and one customer trust metric.

Constraints

Keep a free hobby tier in any recommendation.
Do not assume new products, partnerships, or a shift to a sales only buying motion.
Any change must include a migration path for existing customers before their next billing date.
The pricing system must remain understandable enough for self serve customers to compare options without sales help.

Format

Use short headings and a simple table to compare options.

How Vercel actually played it

Vercel splits two combined metrics, bandwidth and functions, into more granular ones and cuts prices on the fundamentals, with a table showing the before and after for each item. It explains the reasoning as aligning with industry norms and giving customers control to optimise each metric. A practical example of unbundling usage-based pricing and communicating it.

Granular metrics let customers optimise individual costs.
Show a before and after table so the change is easy to verify.
Keep a free hobby tier to feed the funnel.
Give a billing-date window and email account owners with next steps.

Built from Improved infrastructure pricing by Vercel.