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New Shifts in Software Licensing and Pricing. Software Licensing and Pricing
Software is a mature industry with considerable cost pressures. ...
... For instance, ideas for new products, packaging or ... 6.0 Dealing with Shifts in Power
Relationships in ... can be directly down loaded, such as software, music and ...
... so that there were no time loss in-between shifts. ... for the design and development
of new compact cars ... The company will be hiring more software engineers and ...
... sharing to provide competitive advantage; ? Shifts in consumer ... derived from product
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... of complementary operating system software, notably Microsoft ... forces; anticipating
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Submitted by mhelou on June 18, 2008
Category: Technology
Words: 3082 | Pages: 13
Views: 42
Popularity Rank: 113,557
Average Member Grade: N/A (Add a Comment / Grade this Paper)
Software Licensing and Pricing
Software is a mature industry with considerable cost pressures. It costs an incredible amount of money to develop, deliver, market, sell and support a software product.
Software vendors are struggling with dwindling margins, increased competition, and bad economy that keep pushing them to sell at lower prices. For many, the only way to overcome that is to make big shifts in licensing and pricing schemes.
Traditionally, most software vendors use a perpetual licensing model, with a license fee for each module or component of the software, or a license fee for each user of the software.
When a customer acquires a perpetual license he assumes responsibility for managing the software. There is a high upfront cost associated with the purchase of the license, as well as the burden of implementation and ongoing maintenance. ROI is often delayed considerably, and, due to the rapid pace of technological change, expensive software solutions can quickly become obsolete. This made acquiring software products a costly investment that many companies cannot afford anymore.
Under all this pressure, the industry started moving away from the rigid and expensive perpetual licensing model toward a new flexible model that allows selling software as a utility. It is also called Software as a Service (SaaS) or Subscription Based Software.
SaaS means that the software is paid for as it is used. The consumer has no software, hardware, or infrastructure to purchase, install, or maintain. Apart from a personal computer and an Internet connection, all parts of the solution are provided by the software vendor. They are hosted on a remote server in a data center managed an owned by the vendor.
In this paper we will compare the perpetual model with the SaaS model and we will discover the benefits and challenges of the new licensing model. And most important,...
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