In a recent Forbes’ article, Adrian Bridgwater discusses why purchasing software applications is so difficult. In a nutshell, it’s the software licensing. According to Bridgwater,
“74 percent of software producers utilize subscription models for some or all of their products, compared to 65 percent utilizing perpetual licenses, 59 percent leveraging usage-based…and 47 percent using outcome/value-based models.”
As a practical matter, most startup software companies don’t really have a clue about their options when it comes to software licenses. They may understand the big picture (e.g. SaaS v. desktop application) but rely upon incomplete information when deciding how to monetize their applications. In short, this means picking a less profitable licensing model more often than not.
Of course, software customers (business and consumer) typically purchase software licenses with even less knowledge than that possessed by the companies selling them. And this frequently leads to the customer paying too much for the wrong type of license.
If you want help with software licensing contracts or other application agreements (e.g. software development agreement), set up a phone consultation Software Lawyer Mike Young today.
