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The Pricing Strategy Analysis For The Software-As-A-Service Business Model, Dan Ma, Abraham Seidmann
The Pricing Strategy Analysis For The Software-As-A-Service Business Model, Dan Ma, Abraham Seidmann
Research Collection School Of Computing and Information Systems
The Software-as-a-Service (SaaS) model is a novel way of delivering software applications. In this paper, we present an analytical model to study the competition between the SaaS and the traditional COTS (Commercial off-the-shelf) software. The main research goal is to analyze the pricing strategy of the SaaS in a competitive setting. The model captures the most salient differences between the SaaS and COTS, including their distinct pricing structures, user initial setup costs, system customization levels, and delivery channels. We find that the two could coexist in a competitive market in the long run, and more importantly, we show how the …