software is free (open-source). software comes shrink-wrapped for a fixed price (is resold) or is downloaded for a fixed price. it’s given away free, except for commercial use; free, but there’s a charge for support. or you can use a basic version for free, but the extra whistles cost something (premium product). or you can rent it (SaaS). I currently use software purchased in each of these ways.
my least favourite isn’t up there. this is software for a price determined by who’s buying it. this is, perhaps, the most common enterprise model. it sucks and i actively try to avoid it. it makes perfect sense, of course, let’s suck up that consumer surplus (difference between what someone is prepared to pay, and what the price is set at). but when you phrase it as “how much can i get away with” it doesn’t sound so impressive.
but you’ve got to make a living.
any vendor has to look at how many users they think they’re worth. if there’s only going to be a handful, then the price is going to be high. if you’re going to cover the planet, then that’s different. of course, there will be competitors.
idly thinking about this i came up with two alternative pricing models, the first of which is ridiculous. that being to charge:
total amount the software is worth / total users in a set time period
the user get’s billed at the end of the end of the period. i see a “current price” ticking down with every download / take up. let’s see those early adopters pay.
the second is time-step pricing. there’s a $10 charge now, next month it’s $9. In a year it will be 10c. jump in when you feel it’s worth it.
It doesn’t matter whether we’re talking a one off charge or rental (SaaS), the same principle would apply.
