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Software Revenue/Licensing Thoughts

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Renegade:
I've been thinking about some software licensing and revenue models, and come up with a small twist that I'd like to hear your thoughts on. (I don't want to get sidetracked with discussions about free -- I want to stick to licensing and revenue.)

To start, Freemiumw. So you get the basic software free, with the opportunity to purchase additional functionality/features.

So, for example, the product has features A, B, C... X, Y, Z. Or whatever. Let's not get caught up in the number of features as it's largely irrelevant.

Features A~D are free.

Next, additional features can be purchased, with possibly varying price points. e.g.

E = $1.00
F = $0.50
G = $2.00
H = $1.50

or

E = $1.00
F = $1.00
G = $1.00
H = $1.00

Whatever. Something like that. And so on down the feature list. In order to make a transaction viable, have a minimum purchase of say 3 features or $3.00 or something. (Again, let's not get caught up with the details there but stick to the big picture.)

Then, possibly packages. e.g.

Features E~I for $5.00
Features E~M for $8.00
Features E~Z for $12.00

So, the complete set for everything is $12.00.

Next, upgrading from features/sets to more features/sets -- price it at the difference +50% (or 20% or whatever), so...

Upgrade from E~I to E~M for $4.50 ($3 * 1.5)
Upgrade from E~I to E~Z for $10.50
Upgrade from E~M to E~Z for $6.00

Yes... It looks complex.

THE POINT
However, the point isn't to actually get people to upgrade from E~I to E~Z or to purchase individual features, but to be able to say, "buy the full package for $12.00 and save 80%" or "buy the full package for $12.00 and save $10.00".

And, at the same time, allow for emerging markets to see that they can get some of the functionality that they want for a very low price, and that they then have the option later on to purchase additional functionality for a low price. e.g.

Buy EFG for $3.00 now, and later on, but HIJ for $3.00, for 2 easy, low payments that are manageable RIGHT NOW. ---- Remember... in some places in the world $1~3 will buy you a meal at a restaurant, with a drink, and $5 will get you a meal at an relatively upscale restaurant.

I've not seen this done before other than the typical lite, standard, and pro type of licensing systems.

At the same time, I'm still thinking that the system needs to use the typical shareware model of "try before you buy" with something like a 30-day or 45-day trial period for the full functionality.

So... Thoughts? Please keep in mind the point there -- to drive home the idea of savings for people in developed economies and get them to purchase the full package, or at least spend some money, while still making portions accessible to people in emerging economies (or those caught in the crises of the developed economies).

app103:
Interesting idea.

I think if it was a free base app, providing basic functionality, with additional features provided via plugins, with a "plugin store" where you can sell the individual extra features, that might also fly. And if you open it up to other developers at some point, you could have a ton of additional features to offer, things you may never have thought of, and possibly giving other developers a chance at making a little money too.

Ath:
I've not seen this done before other than the typical lite, standard, and pro type of licensing systems.
-Renegade (June 27, 2011, 09:47 PM)
--- End quote ---
This is the licensing system our company has been enforcing for years. Including a yearly renewal fee that's invoiced at the end of the year. Each product has several standardized modules/features, on top of the base product, that can be bought separately, with some combinations requiring some other modules because of technical reasons. It's mostly the pricing that's a 'bit' different ;D And there's no free trial either, we usually go to the (potential) customer and demo the product(s).

I've built the license generator that, based on the administrative database, generates the new or changed licenses for our customers, and makes them available on our support website.

What you present here is IMHO a very viable licensing system, and with the pricing you suggest, indeed suitable for a worldwide market, ofcourse depending on the module-prices and grouping/discounts you select. :Thmbsup:

Renegade:
Another thing just occurred to me while reading this thread:

UltraEdit on sale:
https://www.donationcoder.com/forum/index.php?topic=27188.0;topicseen

I HATE limited activation licensing. I've had machines where I've had to reinstall from scratch several times. Yuck. That burns license activations, and isn't really a fair way to treat customers. Still, I can see the point to it.

But what about this idea...

Limit activations according to where people are? And limit activations by unique machine ID. So, if you are in the US, for example, you get 3 unique machine IDs with unlimited activations for those specific machines. Effectively a 3-user license. And if you are in somewhere like Cambodia, limit activations to something like 10 or 30 (or whatever).

That way you can effectively limit piracy, but allow a certain degree of piracy in poorer parts of the world.

I can see some problems in there, but the general principle seems to be somewhat attractive to me.

steeladept:
Actually that is a very common licensing scheme, just not that common on Windows systems.  It is, however, the basis of the In-App purchasing scheme of many phone apps.  Provide a basic software for the phone, with in App purchases or bundles for "premium" content.  What defines premium is largely defined by the content providers themselves, and - at least for games - tends to be limited severely to only cosmetic changes (we can discuss the merits and reasons for that in another thread if it matters), but it does exist.  Just a thought for you....

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