Is Going “Light” Right for Your Software Pricing Strategy? | LicensingLive!

One of the best parts about buying a new car, other than getting a new car, is that you can get the basic model plus a long list of extras.  Often certain packages have been designed that include the basic model plus a certain set of extras: the “sport” model, the “winter” edition, the “luxury” package etc.  You can start at a lower price point and then just add the extra features you want, without adding or paying for what you don’t want or need.

This is similar to building an effective software pricing strategy: the ability to license features individually, and to create packages or bundles with various advanced features already included.  Many software vendors fear that if they unbundle their features and sell basic packages plus some premium features, they will end up losing revenue with their current customer base.  For some customers, the basic package will be good enough, and they will pay a lower price accordingly, meaning less revenue is gained.  Why take the risk and make less money?

In reality, we actually see software vendors increase their revenues after disaggregating their offering.  The same is true for hardware vendors licensing their premium features which are enabled through software, or who start controlling the performance of their devices.  There are several drivers behind this:

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Is Going “Light” Right for Your Software Pricing Strategy?.