Software pricing preferences may be self-fulfilling prophecy
by Staff -- Manufacturing Business Technology, 7/1/2005 12:00:00 AM
The software industry has long been criticized for its pricing model, says San Francisco-based Sand Hill Group in its CEO Outlook report, a survey of executives of small to midsize software vendors. In response to these criticisms, some vendors have established subscription-based and value-based pricing, or use of application service providers (ASPs).
According to the report, models other than license sales now account for 45 percent of software vendor pricing methods. As to what pricing models customers prefer, 20 percent of the CEOs say customers want subscription licenses, 20 percent say ASPs or software-as-a-service, and 7 percent say value-based pricing (see graphic).
But as a barometer of marketplace preference, the CEOs' answers may be somewhat disingenuous, as they mirror closely the distribution of pricing models actually used by the vendors.
