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April 04, 2007
Software as a Commodity Tiered Pricing Model
So... crazy idea. What if software would cost more each time you used it? but only very slightly more.
Imagine a software license that allowed you to use a program some number of times for free. Then it would cost a small amount for the next tranche of uses and a medium amount for the next tranche, and finally a large amount for uses above some high number...
For some applications it would have to be measured in minutes or hours rather than instances since usage sessions might vary greatly in duration. Others could be based on number of transactions or number or matched queries.
We have a Photoshop education license. I thought about that term and it registered that in many ways we are still learning the program and maybe shouldn't have to pay as much as someone who knows the program well and therefor gets more power out of its use. Once we have used it on a daily basis for long periods of time we should have to start paying the full professional price and we would be willing to because we are clearly using it as a professional.
So, everyone could use a software package for free, not just for a limited 30 day trial window that starts the first time they install it. They could use all the features and really learn the program. If it turned out to be useful to them they would keep using it and probably increasingly so. They sell themselves on its usefulness. After the first couple hundred hours of use, if they can't see it being worth 10 dollars to keep using it, they won't want to keep using it anyway. And if they use it for another 300 hours and don't see it as worth 100 dollars, they probably won't keep using it anyway and on and on...
It would make corporate licensing simple. Companies would need a slightly larger alotment of free hours in order to let more people see how useful it is. But once they did, if it was truly useful, the cost might end up being quite a bit more than they would have paid otherwise, on the other hand they(and the vendor) have a clear measure of its adoption and usefulness to their company.
People will say it turns software into a commodity. So what?
Posted by bizfund at April 4, 2007 10:10 AM