Can anyone give me some advice on ASP and licence pricing models...
e.g
Ave price for a licence / ASP solution... for different types of service e.g. a mobile platform for content distribution over WAP, Palm and PDA's?

I am researching this whole area - we have technology that we are considering developing into a licence product... or providing as an ASP solution and as we are new entrants I am trying to get to grips with the general prices / options out there in the market.

Pricing in the ASP market is probably one of the hardest things and definitely something we at Snaz have spent a serious amount of time going through.

At present we have 3 different pricing models that we are using, and tailor towards the client and market we are aiming at.

Model 1.

- Minimal upfront rental fee of software license
- Monthly maintenance of system and bandwidth
- Per user usage fee

For each part of our system the client takes we are placing a minimal upfront fee to license that technology. This in no way cover our development/running costs but allows us to get a payment for the setup work needed to enable the client.

We then have a rolling monthly bill on top which covers our server costs and depreciation, bandwidth charges and an allocated amount of resource time to maintaining the client.

On top of this we then add a per user usage fee for our system which we charge on a 6 monthly basis - users are costed only once no matter how often they use it in that time

Model 2.

- No upfront fee.
- Similar monthly fee to 1.
- Per user usage fee
- Wireless air time/volume split

This model works well with our ASP partner over wireless charges to the user as well as a per user fee.

Model 3.

- Large upfront fee.
- Small monthly fee.
- No user or revenue fees.

This model only really suits ASPs who project large growth of their platform and/or don't want to share their revenue with us

On top of these models we are also considering the 'annual rental - automatic software upgrade' model versus the 'buy once - pay for your upgrades' model. At the moment it looks like we're going with the auto upgrade one, but I'll keep you posted if we change that.

Regards

Alex Judd
CTO
Snaz Commerce Solutions

On 9:2:24 17 November 2000 ashley wrote:
>Barney - a good question, and I can't answer the pricing
>or licensing question. It might be worth talking to some
>of the current wireless ASPs who have a presence in the UK
>market e.g. SNAZ commerce solutions (http://www.snaz.com/
>) or Sila ( http://www.silacom.com/ )
>
>If do find anything out on pricing / licensing it would be
>interesting to hear about!
>
>Ashley