Tag Archives | Pricing / Licensing

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Netflix Pricing: What Not To Do

Netflix, a service whose adoption rate has been growing at astounding rate of 3.6M users a quarter, has changed the way we watch shows and movies at home. They are one of the most successful tech firms started in the late 90s. Just think of some of their dot.com competitors: Excite, Kosmo, and Webvan and  More

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Piracy and Revenue Optimization

A winning business model requires a unified and all-encompassing approach that goes far beyond how monies are collected and products or services are delivered. In an earlier article, I mentioned a long list of functional areas that must align around a winning business model, but neglected to include Legal. How the legal eagles affect business models is critical and deserves an article of its own. That’s right–even the legal team is part of a winning business model.

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Pricing as a Head Trip

Can prices be set too low for consumers? A recent study by Dr. Antonio Rangel of CalTech says yes. Dr. Rangel observed the brain activity of subjects and found they exhibited more pleasure drinking wines when they thought they cost more. For those of us that study the finer points of pricing, this is a very interesting result. We all know that there is a sense to “you get what you pay for” that acts as a negative factor when evaluating the lowest priced alternatives. What Dr. Rangel has established is that there is more than the fear of getting stuck with an inferior product at work; people actually get more enjoyment from certain products if they think they cost more. The data communicated by the price is working not just at a rational level, but at an emotional level as well. That is, from the brain’s standpoint, these products are objectively better in a post-purchase environment.

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Shifting Business Models & What It Means For You

While SAP’s brand and development resources are enormous assets, SAP’s operations—the very way it does business—must be re-thought for BBD and the changes required for success are fundamental in every sense. SAP needs to re-think its sales, services, integration, support, development and revenue models. The enterprise sales force is too expensive to address mid-sized customers and the R/3 eco-system is ill-suited to address BBD deployment. Even the SaaS revenue stream will require major adjustments.

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Aside

Shifting Business Models & What It Means For You

While SAP’s brand and development resources are enormous assets, SAP’s operations—the very way it does business—must be re-thought for BBD and the changes required for success are fundamental in every sense. SAP needs to re-think its sales, services, integration, support, development and revenue models. The enterprise sales force is too expensive to address mid-sized customers and the R/3 eco-system is ill-suited to address BBD deployment. Even the SaaS revenue stream will require major adjustments.

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SaaS vs. Web Applications

Last year I wrote about the communication gap between the saas (software as a service) and web application communities. The quick summary of the gap is that they’re both dealing with the same technologies — hosting an application on a server and accessing it over the Internet — but from completely different perspectives and even  More

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