article

Impact of pricing schemes on a market for Software-as-a-Service and perpetual software

Authors:

Juthasit Rohitratana,

JöRn AltmannAuthors Info & Claims

Future Generation Computer Systems, Volume 28, Issue 8

Pages 1328 - 1339

https://doi.org/10.1016/j.future.2012.03.019

Published: 01 October 2012 Publication History

Abstract

In this paper, we present an agent-based simulation system that allows modeling the interactions between software buyers and vendors in a software market. The market offers Software-as-a-Service (SaaS) and perpetual software (PS) licenses under different pricing schemes. Four dynamic pricing schemes are analyzed: derivative-follower pricing, demand-driven pricing, skimming pricing, and penetration pricing. Customer (buyer) agents respond to these prices by selecting the most appropriate software license scheme based on four criteria using the Analytic Hierarchy Process (AHP) decision support mechanism. The four decision criteria relate to finance, software capability, organization, and vendor. The simulation results show that the demand-driven pricing scheme is the most effective method but hard to implement since it requires perfect knowledge about market conditions. As an alternative, penetration pricing and skimming pricing could be used. In addition to this, it can be stated that SaaS is most attractive for small enterprises while PS is attractive for large enterprises.

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cover image Future Generation Computer Systems

Future Generation Computer Systems Volume 28, Issue 8

October, 2012

211 pages

ISSN:0167-739X

Issue’s Table of Contents

Copyright © Elsevier B.V. © 2012.

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Elsevier Science Publishers B. V.

Netherlands

Publication History

Published: 01 October 2012

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Cited By

Altmann JBañares JPetri I(2018)Economics of Computing ServicesFuture Generation Computer Systems10.1016/j.future.2018.05.07587:C(828-830)Online publication date: 1-Oct-2018
https://dl.acm.org/doi/10.1016/j.future.2018.05.075
Slawik MZilci BKüpper A(2018)Establishing User-centric Cloud Service RegistriesFuture Generation Computer Systems10.1016/j.future.2018.03.01087:C(846-867)Online publication date: 1-Oct-2018
https://dl.acm.org/doi/10.1016/j.future.2018.03.010
Haile NAltmann J(2018)Evaluating investments in portability and interoperability between software service platformsFuture Generation Computer Systems10.1016/j.future.2017.04.04078:P1(224-241)Online publication date: 1-Jan-2018
https://dl.acm.org/doi/10.1016/j.future.2017.04.040
Dutt AJain HKumar S(2018)Providing Software as a ServiceInformation Systems and e-Business Management10.1007/s10257-017-0356-916:2(327-356)Online publication date: 1-May-2018
https://dl.acm.org/doi/10.1007/s10257-017-0356-9
Lee IAnjum ASill AFox GChen Y(2017)Determining an Optimal Mix of Hybrid Cloud Computing for EnterprisesCompanion Proceedings of the10th International Conference on Utility and Cloud Computing10.1145/3147234.3148109(53-58)Online publication date: 5-Dec-2017
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Jhang-Li JChang C(2017)Analyzing the operation of cloud supply chainElectronic Commerce Research10.1007/s10660-016-9238-317:4(627-660)Online publication date: 1-Dec-2017
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Cocco LConcas GMarchesi M(2016)Simulation of the competition among traditional and on-demand software vendorsSimulation10.1177/003754971562050292:1(33-45)Online publication date: 1-Jan-2016
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Bañares JAltmann JVanmechelen K(2016)Economics of computing servicesFuture Generation Computer Systems10.1016/j.future.2015.09.03055:C(401-402)Online publication date: 1-Feb-2016
https://dl.acm.org/doi/10.1016/j.future.2015.09.030
Mitropoulou PFiliopoulou EMichalakelis CNikolaidou M(2016)Pricing cloud IaaS services based on a hedonic price indexComputing10.1007/s00607-016-0493-x98:11(1075-1089)Online publication date: 1-Nov-2016
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Jazayeri BPlatenius MEngels GKundisch D(2016)Features of IT Service Markets: A Systematic Literature ReviewService-Oriented Computing10.1007/978-3-319-46295-0_19(301-316)Online publication date: 10-Oct-2016
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