Some guidance on software pricing

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For many organizations, software licensing represents an increasing share of their intellectual property portfolio. Because most software is new and the market uncertain, it would be useful to have a quick, back-of-the-envelope method of estimating the selling price. The replacement method of valuing software on the basis of total R and D expenditures tends to over-predict the value of software. This occurs because most research is not initially directed at software development per se; the research is usually more general, with a useful product emerging only later in the project. However, if the author can estimate the time and costs ... continued below

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9 p.

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Betten, P. June 1, 1997.

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  • Betten, P. Argonne National Lab., IL (United States). Industrial Technology Development Center

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Description

For many organizations, software licensing represents an increasing share of their intellectual property portfolio. Because most software is new and the market uncertain, it would be useful to have a quick, back-of-the-envelope method of estimating the selling price. The replacement method of valuing software on the basis of total R and D expenditures tends to over-predict the value of software. This occurs because most research is not initially directed at software development per se; the research is usually more general, with a useful product emerging only later in the project. However, if the author can estimate the time and costs necessary to rewrite the software, using present knowledge,d this modified replacement cost estimate is a better indicator of market value. It is proposed that 5% of this cost is a reasonable first estimate of the software shrink wrap selling price. The purpose of this paper is to present the replacement costs for several software licenses, discuss them, and compare them with other competing products on the market. In addition, a pricing survey has been completed for multiple users in order to estimate how one can rationally set multiple-user prices. Two distinct multiple-user pricing regimes were found: one regime, defined as market share software, is slightly discounted from list price; the other regime, defined as highly discounted software, is highly discounted from list price.

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9 p.

Notes

OSTI as DE97053137

Source

  • 22. annual Technology Transfer Society meeting, Denver, CO (United States), 20-23 Jul 1997

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  • Other: DE97053137
  • Report No.: ANL/ITD/CP--93344
  • Report No.: CONF-970780--1
  • Grant Number: W-31109-ENG-38
  • Office of Scientific & Technical Information Report Number: 505365
  • Archival Resource Key: ark:/67531/metadc689828

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Office of Scientific & Technical Information Technical Reports

Reports, articles and other documents harvested from the Office of Scientific and Technical Information.

Office of Scientific and Technical Information (OSTI) is the Department of Energy (DOE) office that collects, preserves, and disseminates DOE-sponsored research and development (R&D) results that are the outcomes of R&D projects or other funded activities at DOE labs and facilities nationwide and grantees at universities and other institutions.

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  • June 1, 1997

Added to The UNT Digital Library

  • Aug. 14, 2015, 8:43 a.m.

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  • May 20, 2016, 1:52 p.m.

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Betten, P. Some guidance on software pricing, article, June 1, 1997; Illinois. (digital.library.unt.edu/ark:/67531/metadc689828/: accessed December 11, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.