Establishing a fair price for software

The first step in determining software value is to determine the benefits that come from single-copy use. Software benefits can include enabling task completion, enhancing task quality, or improving efficiency. Obviously, not everyone experiences the same amount of benefit-if they derive a benefit at all. This means you must establish an average benefit for each user and quantify it in dollars. Second, the price a user is willing to pay for a software license is not equal to the anticipated benefit. In fact, the price must be typically a fraction of the benefit to justify the buyer´s effort to acquire, install, learn, and maintain its operation. Clearly, some people pay more than others. You must decide whether to price for all market segments or only the upper end. Once you establish a price, multiply it by the estimated number of users. The result is the software´s value, if the software has only one market or application. If there are multiple markets, apply this analysis to each individual market. The aggregate of all values for all markets represents the gross value. This is the value that gives a software developer bragging rights. However, the determination of gross value is only the first step in the search for the software´s true value