Wednesday, November 28th, 2012
When operating in the software industry, particularly when offering custom software solutions, pricing can be a complicated process as requirements and length of development time and project complexities differ on a case-by -case basis. However, it is still important to offer customers price transparency to a certain extent.

“Being upfront with pricing and licensing models is crucial in building a foundation for a good working relationship with your customer,” commented Paul Moroney, Solentive Software’s Principal Solutions Consultant.

“For custom software development providers especially, this is the best policy to adopt at the start of an engagement with a potential client. By providing pricing transparency to prospective clients such as day rates, sales processes and explanations about how you price your service or product offerings at the very start, they will be able to determine if you are the right vendor for their business. Obfuscating pricing models will only result in wasting their time and your time if you are not the right commercial fit for them,” explained Paul.

“When providing software licenses, it is also important to ensure that you offer prospective clients pricing transparency and an uncomplicated licensing model. Some established and large global software platform providers can be guilty of presenting clients with confusing license configurations and unclear pricing models. Even for people with years of IT experience, understanding the licensing models of complex platforms can hinder the potential licensee from thoroughly evaluating whether the product is right for them,” stated Paul.

“This lack of clarity can sometimes lead to unexpected costs that the licensee had not budgeted for, particularly from modules that can be turned on by low-level access end-users without the express consent of IT administrators. In such cases, to ensure an amicable working relationship between vendor and licensee, it is important that any potential costs that are not within the IT administrators control are disclosed or made clear before any agreement is reached,” continued Paul.

“While it is understandable that pricing can differ depending on different use cases and customisation needed, if a product is so complicated that a team of account managers and technical sales staff are needed to provide a quote, it is perhaps time to review your licensing model. For cloud products however, a clear price list should always be accessible to potential users as on-demand software usually has little or no customisation involved,” advised Paul.

Contact Profile

Solentive Software

Solentive specialises in custom software development and systems integration. You'll benefit from our real-world expertise in software built in .Net and Java that is task-matched for affordability and designed to grow with your business.
Kareem Tawansi
P: 1300 55 30 50


Price transperancy, software industry, Paul Moroney, Principal Solutions Consultant, software development, custom software development, software licenses



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