2

I've developed software that manages invoices, products, customers, and sales. The price of the license is 3.500$ and can be used by three users only on Microsoft Windows operating system. After the first year, one must pay 30% yearly (a ratio that everybody use) for bug fixes and mail support (actually it costs 750$).

Now I'm rewriting the software, and will host it on the cloud. I know I can't ask 3.500$ for a license, so I'm going to ask a price per user per month.

My reasoning is to have an annual revenue while the clients keep using my software: since there are (nearly) no bugs, I don't like the idea that clients continue to use it forever after only paying the initial 3.500$. Competitors with similar, but buggy, software charge their clients for yearly support.

Is there any ratio that I can apply to determine the price per user per month? If they get bug fixes, the same level of support, and all the advantages of a cloud service*, would it be fair to set the price at 20$/month x user? For example 750/3 users/12 month)? Should it be a lot less?

(* Cloud services offer automatic backup, nothing to install, automatic updates, access from mobile devices and any operating system)

The cloud costs me 25$/month. I think I can add some clients on the same server before the performance goes down.

Thank for any advice.

  • 1
    All cloud services I use are 10$/m for the starting package and then I have to pay $10 or $20 more for pro features. It seems that $10 for the starter package is some standard. Try to investigate similar services and their rates. – Peter MV Dec 28 '15 at 8:44
  • Whatever the market will bear. If you can find comparables then use them to help you find your price point. – SDsolar May 29 '17 at 20:17
3

I doubt there is a standard ratio. Unless your product is unique, its pricing and licensing structure should be designed to compete with similar products and any alternatives to using those products. After researching and developing a pricing structure, ask a few of your existing customers what they think about your proposal and whether they would subscribe to the cloud service. Tweak the pricing model until you think you've gotten the best reception. Then roll the "beta" version of the pricing out to a pilot group. After making further refinements, release the new pricing model. Iterate, be transparent, reward existing and pilot customers who helped you. For more information, search for books about "Disciplined Entrepreneurship".

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.