Specialised Enterprise Software Vendors and their Development Process of Pricing Models - An empirical Case Study of a German Software Vendor

Abstract: Authors: Florian Drechsler and Frederik Mante Advisors: Martin Blom Keywords: Pricing Models, Software Vendors, Pricing Model Development, Pricing Theories Purpose: To investigate the development process of software pricing models with special regard to the enterprise software market. Further, we looked at existing pricing theories in order to assess their applicability on the market of specialised enterprise software products. Methodology: A theoretically informed case study with a German software vendor. Theoretical Framework: Our theoretical framework is mainly based on general theory on pricing as well as pricing models designed for the overall software industry. The theory comprises the driving forces of pricing, pricing management and software pricing parameters. Empirical Foundation: The empirical data for our case study was gathered through primary data, in form of interviews with the managing partners of our case company, and secondary data, in form of a detailed business plan. Findings: In the first place, we found that the theory and models used for this purpose were largely adequate to describe the processes observed in our case company. However, we could identify various differences for our case company, such as a higher degree of interaction with customers. Based on theory and case, we developed a model that condenses the price model development process. Direct implications for managers could also be identified, as we found that a high degree of interaction in the price finding results in a serious obstacle to the scalability of the business.