Software Pricing Innovations Can Cut Costs

March, 2002


The Internet is impacting software prices in ways that many buyers will find attractive. Consequently, vendors are being forced to rethink their traditional application software pricing structures. Software vendors are experiencing negative pressures to the commonly encountered price-per-CPU pricing structure they have used in charging customers in the past. At the same time, more flexible pricing strategies are being introduced. These pricing strategies are being driven less by the software vendors themselves than by application service providers (ASP) and fall-outs of court cases such as Microsoft’s recent setback. As a result, software buyers have an opportunity to reduce their application server costs if they are sufficiently informed and wise in their decisions.