Software pricing trends: How vendors can capitalize on the shift to new revenue models

January 2007
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Software pricing trends

At a glance

This PwC report explores both the causes and implications of the rise of software pricing structures and provides guidance for vendors and how best to respond.

Software vendors must take into account a new breed of customer that judges software by its ability to contribute value to the organization—measuring where, when, how much, and how well software is used.

This changing dynamic is having a significant impact on how software is priced and what customers pay for, which specify the type and duration of the license agreement, the frequency and amount of payment, and the proportion of payments for license rights and maintenance, as well as the software delivery mechanism.

As is the practice in other industries, a growing number of software vendors are adopting value-based pricing models that focus on customer demand and value perception and are directly tied to the customer’s insight into how the software affects its business.