Adjusting Software Revenue and Pricing Strategies in the Era of Cloud Computing
Ojala, A. (2016). Adjusting Software Revenue and Pricing Strategies in the Era of Cloud Computing. Journal of Systems and Software, 122(December), 40-51. https://doi.org/10.1016/j.jss.2016.08.070
Published inJournal of Systems and Software
DisciplineTietoyhteiskunta, viestintä ja liiketoiminta
© 2016 Elsevier B.V. This is a pre-print manuscript version of an article whose final and definitive form has been published by Elsevier.
Recent research has recognized cloud computing as a new paradigm of servitization in which software products are offered based on service contracts. Thus, instead of selling software licenses, software vendors can rent software as a service to customers. However, it is still unclear how software providers can use software renting as a competitive strategy in the software market. Based on 37 interviews with software professionals from five case firms, this paper focuses on the connection between competitive forces and the factors influencing the selection of a pricing model. The findings indicate that servitization of the software offering makes it possible to adjust revenue and pricing strategies relative to market competition. Depending on the competitive situation in the market, firms apply mixed revenue models, or else a hybrid pricing mechanism, to protect their business against rivalry and substitutes. The software renting model has several advantages which significantly help software vendors to expand their business opportunities. However, in some cases, powerful customers are able to limit the revenue and pricing options. The findings also indicate that software renting is related to cost leadership and differentiation strategies, whereas software licensing is linked to a focus strategy. ...
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Ojala, Arto (IEEE Computer Society, 2013)When should software providers maintain their traditional licensing model versus offering software as a service, and which SaaS model is more profitable: rental or pay per use? For customers, what are the trade-offs between ...
Ojala, Arto (IEEE, 2014)Recent research on software revenue and pricing models has revealed important ways in which firms can benefit from software renting. However, it is still unclear how SaaS providers select a proper revenue and pricing model ...
Ojala, Arto (GSTF, 2012)Cloud computing brings new possibilities for software firms to sell their products within a Software-as-a-Service (SaaS) model. However, although SaaS provides new revenue models, it may not easily achieve a profitable ...
Ojala, Arto; Tyrväinen, Pasi (GSTF, 2012)Cloud computing brings new possibilities, allowing software firms to sell their software products using the Software-as-a-Service (SaaS) model. SaaS provides opportunities for flexible pricing but creates challenges on how ...
Laatikainen, Gabriella (University of Jyväskylä, 2018)The emergence of cloud computing induces opportunities for software vendors and for organizations with great storage needs. Indeed, software companies have begun to adopt cloud technologies and offer their software as ...