Perpetual Versus Subscription Licensing Under Quality Uncertainty and Network Externality Effects.

Author List: Zhang, Jie (Jennifer); Seidman, Abraham;

Journal of Management Information Systems, 2010, Volume 27, Issue 1, Page 39-38.

The article analyzes the optimal way for software vendors to license software, in the context of social aspects of information systems. The relative merits of perpetual licensing or subscription models are discussed, and issues such as software upgrade compatibility, uncertainty regarding quality, network effects and price forecasting are addressed. Evidence is presented that software vendors should use a hybrid of perpetual licensing and subscription models in order to optimize both their own profits and the satisfaction of their customers.

Keywords: compatibility;network externalities;price discrimination;quality uncertainty;software licensing;upgrades

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List of Topics

#112	0.220	services service network effects optimal online pricing strategies model provider provide externalities providing base providers fee complementary demand offer derive
#190	0.195	new licensing license open comparison type affiliation perpetual prior address peer question greater compared explore competing crowdsourcing provide choice place
#22	0.156	software vendors vendor saas patch cloud release model vulnerabilities time patching overall quality delivery software-as-a-service high need security vulnerability actually
#77	0.107	information systems paper use design case important used context provide presented authors concepts order number various underlying implementation framework nature
#232	0.095	software development product functionality period upgrade sampling examines extent suggests factors considered useful uncertainty previous called complementarities greater cost present