Analysis of pricing strategy for a software product: A B2B product scenario

Abstract

Software Products are intellectual properties created by implementation of emergent and codified knowledge of a set of people. Unfortunately, there exist no reliable frameworks to measure the value of software from the user s perspective. Therefore pricing of a software product could end up potentially with the consumer not seeing value in the product. Pricing models have evolved over the years in attempting to address this concern, but have not been completely able to meet the same. The additional problem is that the software architectures are changing over a period of time that changed the delivered and perceived value to the end users. The emerging world of Web 2.0 which emphasizes on cross collaboration and instant on demand consumption has created further confusion in the software pricing aspect. Software product vendors must understand that there exist no generic frameworks to price software, so pricing has to be done in such a manner that it creates maximum value for the consumer in parallel without losing focus on the business objectives.