The evolution of software pricing: from box licenses to application service provider models

Software is the intellectual capital output of the codified knowledge of a programming team. The development cost is high, but the variable cost of sale is substantially lower (negligible) than for hard goods. Unfortunately, there does not exist a valid or reliable measure to value software. The trend has been to align pricing to the activities that buyers realize value from. However, new architectures change the nature of where value is …