Here, the pricing is based on providing a committed business service, for ex, processing payroll for a global company as part of HR offering and this can be priced per employee. Larger the employee base at a given location, lower the price / employee can be.
This model came into existence with the evolution of software architecture from mainframes to internet based. As mentioned before, when a company provided a particular business service, its client could access the system from anywhere over the Internet and they need not bother about maintaining the database or the software system. The service provider then charges them for each transaction/ record processed through their system.