Advertisement

A Dynamic Pricing Model for Software Products Incorporating Human Experiences

  • Andrey SaltanEmail author
  • Uolevi Nikula
  • Ahmed Seffah
  • Alexander Yurkov
Conference paper
  • 747 Downloads
Part of the Lecture Notes in Business Information Processing book series (LNBIP, volume 240)

Abstract

At the age of software as a service (SasS) and cloud computing as compared to what is used to be earlier, designing product strategies is a challenging concern for software product management researchers. Comparative statics models are considered to identify software market characteristics while assessing the managerial decisions during the software product strategy design. However, their applicability in dynamic market analysis is rather limited. Important concerns in dynamic market such as dynamic pricing cannot be fully estimated. This motivated the development of a simulation-based dynamic model to evaluate the efficiency and effectiveness of using different pricing models. The proposed (simulation) approach given in details in this paper can be used in conducting complex analysis of software product strategy that involves consideration of product strategy as a portfolio of interrelated solutions rather than a set of independent managerial decisions.

Keywords

Software product strategy Software market Decision making Pricing model Simulation model 

References

  1. 1.
    Bontis, N., Chung, H.: The evolution of software pricing: from box licenses to application service provider models. Internet Res. 10(3), 246–255 (2000)CrossRefGoogle Scholar
  2. 2.
    Buxmann, P.: Network effects on standard software markets: a simulation model to examine pricing strategies. In: 2001 2nd IEEE Conference Standardization and Innovation in Information Technology, pp. 229–240. IEEE (2001)Google Scholar
  3. 3.
    Chellappa, R.K., Shivendu, S.: Managing piracy: Pricing and sampling strategies for digital experience goods in vertically segmented markets. Inf. Syst. Res. 16(4), 400–417 (2005)CrossRefGoogle Scholar
  4. 4.
    Conner, K., Rumelt, R.P.: Software piracy: An analysis of protection strategies. Manage. Sci. 37(2), 125–139 (1991)CrossRefGoogle Scholar
  5. 5.
    Cusumano, M.A.: The changing software business: Moving from products to services. Computer 41(1), 20–27 (2008)CrossRefMathSciNetGoogle Scholar
  6. 6.
    Harmon, R., Raffo, D., Faulk, S.: Pricing strategies for information technology services: A value-based approach. In: 42nd Hawaii International Conference on System Sciences, HICSS 2009, pp. 1–10. IEEE (2009)Google Scholar
  7. 7.
    Iveroth, E., Westelius, A., Petri, C.-J., Olve, N.-G., Cöster, M., Nilsson, F.: How to differentiate by price: Proposal for a five-dimensional model. Eur. Manag. J. 31(2), 109–123 (2013)CrossRefGoogle Scholar
  8. 8.
    Laatikainen, G., Ojala, A., Mazhelis, O.: Cloud services pricing models. In: Herzwurm, G., Margaria, T. (eds.) ICSOB 2013. LNBIP, vol. 150, pp. 117–129. Springer, Heidelberg (2013)Google Scholar
  9. 9.
    Lehmann, D.-W.-I.S., Buxmann, P.D.P.: Pricing strategies of software vendors. Bus. Inf. Syst. Eng. 1(6), 452–462 (2009)CrossRefGoogle Scholar
  10. 10.
    Shapiro, C., Varian, H.R.: Information Rules: A Strategic Guide to the Network Economy. Harvard Business Press, Boston (1999)Google Scholar
  11. 11.
    Shipley, D., Jobber, D.: Integrative pricing via the pricing wheel. Ind. Mark. Manage. 30(3), 301–314 (2001)CrossRefGoogle Scholar
  12. 12.
    Soloviev, V.: Mathematical modeling of strategic commitments and piracy in Windows/Linux competition. In: 15th Annual Conference Proceedings., International Conference on Management Science and Engineering, ICMSE 2008, pp. 10–12. IEEE (2008)Google Scholar
  13. 13.
    Varian, H.R.: High-technology industries and market structure. University of California, Berkeley. 33 (2001)Google Scholar
  14. 14.
    Weitzel, T., Wendt, O., von Westarp, F.G., Konig, W.: Network effects and diffusion theory: Network analysis in economics. Int. J. IT Stan. Stand. Res. (IJITSR) 1(2), 1–21 (2003)CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  • Andrey Saltan
    • 1
    • 2
    Email author
  • Uolevi Nikula
    • 1
  • Ahmed Seffah
    • 1
  • Alexander Yurkov
    • 2
  1. 1.Department of Software and InnovationLappeenranta University of TechnologyLappeenrantaFinland
  2. 2.Department of Information Systems in EconomicsSt. Petersburg State UniversitySt. PetersburgRussia

Personalised recommendations