Bundling Information Goods: Pricing, Profits, and Efficiency
Management Science
Hyper-Differentiation Strategies: Delivering Value, Retaining Profits
HICSS '03 Proceedings of the 36th Annual Hawaii International Conference on System Sciences (HICSS'03) - Track 8 - Volume 8
Product Customization and Price Competition on the Internet
Management Science
Nonlinear Pricing of Information Goods
Management Science
Bundling Information Goods of Decreasing Value
Management Science
On the Optimality of Fixed-up-to Tariff for Telecommunications Service
Information Systems Research
Research NoteSell First, Fix Later: Impact of Patching on Software Quality
Management Science
Consumers Prefer Bundled Add-Ins
Journal of Management Information Systems
Computing as Utility: Managing Availability, Commitment, and Pricing Through Contingent Bid Auctions
Journal of Management Information Systems
A Pricing Mechanism for Digital Content Distribution Over Computer Networks
Journal of Management Information Systems
Information Goods and Vertical Differentiation
Journal of Management Information Systems
Journal of Management Information Systems
Electronic Commerce Research and Applications
An economic model to compare the profitability of pay-per-use and fixed-fee licensing
Information and Software Technology
Risk Management of Contract Portfolios in IT Services: The Profit-at-Risk Approach
Journal of Management Information Systems
Opportunities and risks of software-as-a-service: Findings from a survey of IT executives
Decision Support Systems
Should We Go Our Own Way? Backsourcing Flexibility in IT Services Contracts
Journal of Management Information Systems
Perpetual Versus Subscription Licensing Under Quality Uncertainty and Network Externality Effects
Journal of Management Information Systems
Journal of Management Information Systems
Research Note---Performance-Based Advertising: Advertising as Signals of Product Quality
Information Systems Research
GECON'12 Proceedings of the 9th international conference on Economics of Grids, Clouds, Systems, and Services
Journal of Database Management
Journal of Management Information Systems
Hi-index | 0.00 |
Software is available through a number of different licensing models such as the commonly used perpetual licensing model and a relatively new licensing model called software as a service (SaaS). There are several differences between SaaS and perpetual licensing. SaaS licensing offers software using a subscription model, whereas perpetual licensing involves a one-time payment for a perpetual use license and optional additional payments for future upgrades. Prior literature has not considered the impact of these licensing schemes on the publisher's incentive to invest in software quality. We model differences in how new software features are disseminated in SaaS and perpetual licensing. We show that these differences affect the publisher's incentive to invest in product development. We find that the SaaS licensing model leads to greater investment in product development under most conditions. This increased investment leads to higher software quality in equilibrium under SaaS as compared to perpetual licensing. The software publisher earns greater profits and social welfare is higher under SaaS under these conditions.