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Pricing a Software Product

Posted by ryuzaki0 on from the free-for-all dept.

prostoalex writes "Eric Sink from SourceGear shares his experience on software pricing. Whether you're developing open-source or proprietary software, the money has to come into the business in some form, and the article suggests several strategies as well as the pitfalls for managing software pricing. Sink claims it's tough to compete on price, dangerous to run seasonal promotions and almost impossible to avoid criticism on being over-priced."

6 of 259 comments (clear)

  1. Value for service by Nos. · · Score: 5, Interesting

    Sometimes I place more value on the service I get that on the product itself (software or not). A lot of software is moving to a hosted environment, and a lot of companies are starting to like the idea. Now you can use your service from your mobile device as well as at the office. So, instead of charging for the software, charge for the hosting. Develop and open source the product, then charge people to use the service in your hosted environment.

  2. Supply-side pricing??? by dmayle · · Score: 4, Interesting

    What I want to know is, whatever happened to supply-side pricing. You know, figuring out your cost to supply, and charging a reasonable markup based on that?

    It's because of this that companies have to create artificial market distinctions, and why there is the prevalance of after-market modification. (Things like overclocking.)

    I know it's a bit of an anti-establishment thought, but I'm not sure demand-side pricing is ethical. The whole idea of trying to take your customers for everything you can sounds so much colder when you look at it from their side.

    And on taop of that, if you're a publicly owned company, not doing so might be considered criminal...

  3. Ask the customers! by notthepainter · · Score: 4, Interesting
    Ok, it sounds weird, but when I was at MacSpeech, we asked our customers how much they would pay for the product. This isn't as odd as it sounds, at the time there were NO competitors.

    It was then a simple matter in Excel to figure out how to maximize our income, at what price point did we make the most money. It looked pretty much like the first chart in the article.

    Then management ignores and sets a price accordingly!

  4. Psychology (humans are fucking insane) by jafac · · Score: 4, Interesting

    I used to work on a server data replication product.

    There are many tales to tell about this debacle (I think the vendor has long since cancelled or put it on maintenance mode) - but there was a point where we raised our price from $250/server to $5000/server, and the ONLY change in the product was a name change. No new features were added. Hell, we didn't even update the GUI. Saled jumped 20% that quarter. (unfortunately it was not to be sustained).

    The reasoning was, the Market didn't take us seriously at $250/server because all of our competitors were priced in the $5000/server range.

    --

    These are my friends, See how they glisten. See this one shine, how he smiles in the light.
  5. My favorite "software pricing" story by maiden_taiwan · · Score: 4, Interesting

    An oldie but a goodie (and humorous too) from Chuck McManis on software pricing for the little guy.

  6. Re:better colors by strictfoo · · Score: 5, Interesting

    being a subscriber might give the complaint more weight, as well.

    Well, my other account is a subscriber. But considering that when I posted a complaint about it both the IP's I post from (home and work) were banned from posting anything and my karma quickly going from the good/excellent threshold to terrible, I'd say that it doesn't carry any extra weight at all. I had been a constant subscriber since subscription had become available too.

    Thank goodness for proxies, I guess.

    --
    I've just signed legislation that'll outlaw Russia forever. We'll begin bombing in five minutes.