Blog Entry

Apr 5
2010 

One Man’s License is Another Man’s Poison

I did a chart a few years ago titled “One Man’s License is Another Man’s Poison”.

The horizontal axis is the perception your prospect/customer has of the value your product brings (a totally subjective measure.)  Typically, customers towards the right hand side are the prime markets/customers for an industry and tend to be served by the market leaders.  Start-ups and tier 2 competitors innovate harder to serve that market.  Customers to the left are the secondary markets that market leaders look to for expansion – and that are more often served by tier 2 providers.

The vertical axis is meant to represent the type of license/pricing policy that is being offered.

The blocks in the chart represent how the prospect/customer perceives the type of license – based on how they perceive the value of the product.

The bottom arrow shows what happens when market leaders try to take their pricing and licensing models to secondary markets.  The customers in those secondary markets perceive these models as inflexible.

The upper arrow shows what happens to start ups and 2nd tier providers who are used to offering more elastic licensing models when they try to compete in the primary/core markets.  These markets perceive these models as complex and burdensome.

Maximizing market potential and delivering software products to as many markets as possible is eased by introducing just the right licensing mix so that customers can legitimately access your products and services.