The on-demand model, in which customers pay based on their usage, was preferred by 25% of vendors, while 12.6% favored basing their prices on the customer’s finances, that is, charging by revenue, cost or royalty. By 2006, on-demand pricing is expected to rise to 45.7%, while financial-based pricing should rise to 23%.
On the buy side, the survey found that enterprises prefer perpetual licenses to subscriptions 2 to 1. Only 36% of enterprise executives in the study favored purchasing software through subscriptions; among companies with more than $500 mln in revenues, that proportion rose to 44%. In all, more than 70% of enterprise executives preferred pricing based on concurrent users and per seat.
While 51% of vendors surveyed use a versify the legal contract license, such as a EULA or paper contract, the survey predicts a 42% increase over the next two years in the number of software publishers who will enforce licenses with new technologies such as product activation and network licensing – technologies that survey sponsor Macrovision provides. The number of software vendors who enforce licenses primarily through electronic or digital means is expected to rise from 45% to 61% in that timeframe.