The Optimal Software Licensing Policy under Quality Uncertainty

The rapid rate of standard software development, and the need of users to stay current, has unleashed unprecedented levels of process and product innovations in the software industry. A new service model has emerged which delivers application software and services over the Web on a lease or subscription basis. Software vendors such as Sun, Oracle, and Microsoft have already adopted this innovative business model. They have expanded their sales offerings with lease contracts that augment their traditional one-time purchase transactions. Our paper studies the optimal licensing policy of a software vendor that uses that business model. We look at software vendors that are both selling (at a posted price) or leasing their products where as lessor they guarantee that the lessee will always have the latest version of the software on their desktop. We address some of the specific issues of implementing this policy at the packaged software market, including the impact of network externality, negligible marginal production costs, and upgrade compatibility. We show that by properly defining their pricing structure, software vendors can segment the market and realize effective second- degree price discrimination and show how and when software vendors can maximize their profits through the use of this new licensing policy

Study on the performance of palm methyl ester in a combustion system

Nowadays, the world is adversely affected by the rapid growth of various industries which use fossil diesel fuel as a main source to power their respective industries. As such, this phenomenon has contributed to environmental pollution apart from these natural resources are increasingly reduced thus resulting in price increments. However, biodiesel fuel has recognized by many researcher as a potential replacement of fossil fuel. A study was conducted to investigate the performance of alternative energy sources that are environmentally friendly and renewable such as palm biodiesel. Therefore, this project presents an investigation on the combustion performance of Palm Methyl Ester (PME) which also known as Palm Biodiesel in an oil burner system. Several Carotino’s palm biodiesel blends (B10, B20, and B40) also have been made by blended with Conventional Diesel Fuel (CDF). Examination of the fuel properties for each blends including CDF and PME have been carried out. The performance of the fuels have been studied based on its wall temperature profile and gas emissions generated such as nitrogen oxides (NOx) and carbon monoxide (CO). The test fuels have been burned in the oil burner combustion chamber at different equivalent ratios and using three different oil burner nozzles (1.25, 1.50 and 1.75 USgal/h). From the test, PME is the lowest emission production compared to CDF but generate a low temperature. For example, at stoichiometric mixture with nozzle 1.25 USgal/h, NOx and CO generated by PME decreased of 27% and 30% respectively compared to CDF. PME has recorded about 12% drop in an average temperature compared to the CDF at the same condition. The higher fuel flow rate used, results more heat and emission generated. The results indicated may be benefits to using biodiesel in industrial processes due to less pollution production

Software dynamic pricing by an optimization deterministic model with presence of piracy

This project presents an optimization model for pricing a monopolistic software application with presence of piracy. The purpose is raising revenue produced by product’s sale with adjusting prices in a price skimming strategy and minimizing amount of piracy. The model is a multifunctional price skimming optimization with simplex method which accompanied by deterministic and stochastic methods for calculating time intervals of each segment. Linear functions are used to describing demand of each segment. In addition a linear piracy function is proposed to making piracy a dynamic parameter. The model has the ability to apply penetration pricing and controlling market share. Windows 7 is chosen for case study. Optimizing case of Windows 7 is resulted in 8.2 percentage increase in revenue, while value of net market share is virtually constant. Therefore the developed model demonstrates its competence in optimizing revenue by modifying prices with presence of piracy. Results show that to face with piracy, range of price skimming must decreased in a way that highest price need to be intensely decreased and also lowest one must be slightly decreased. By using this strategy lowest loss in revenue due to piracy can be recurred. Effects of an escalation in piracy on proposed optimization model are: increase in number of sale, demand, selling portion, market share but decrease in price, price difference between segments, and revenue. Time intervals between successive prices, which are obtained for Windows 7, is obtained by deterministic and stochastic technics which are shown to be nearly equal due to large number of customers

Software Versioning and Quality Degradation? An Exploratory Study of the Evidence

We present a framework for measuring software quality using pricing and demand data, and empirical estimates that quantify the extent of quality degradation associated with software versioning. Using a 7-month, 108-product panel of software sales from Amazon.com, we document the extent to which quality varies across different software versions, estimating quality degradation that ranges from as little as 8% to as much as 56% below that of the corresponding flagship version. Consistent with prescriptions from the theory of vertical differentiation, we also find that an increase in the total number of versions is associated with an increase in the difference in quality between the highest and lowest quality versions, and a decrease in the quality difference between "neighboring" versions. We compare our estimates with those derived from two sets of subjective measures of quality, based on CNET editorial ratings and Amazon.com user reviews, and discuss competing interpretations of the significant differences that emerge from this comparison. As the first empirical study of software versioning that is based on both subjective and econometrically estimated measures of quality, this paper provides a framework for testing a wide variety of results in IS that are based on related models of vertical differentiation, and its findings have important implications for studies that treat web-based user ratings as cardinal data.Information Systems Working Papers Serie

Software Versioning and Quality Degradation? An Exploratory Study of the Evidence

We present a framework for measuring software quality using pricing and demand data, and empirical estimates that quantify the extent of quality degradation associated with software versioning. Using a 7-month, 108-product panel of software sales from Amazon.com, we document the extent to which quality varies across different software versions, estimating quality degradation that ranges from as little as 8% to as much as 56% below that of the corresponding flagship version. Consistent with prescriptions from the theory of vertical differentiation, we also find that an increase in the total number of versions is associated with an increase in the difference in quality between the highest and lowest quality versions, and a decrease in the quality difference between "neighboring" versions. We compare our estimates with those derived from two sets of subjective measures of quality, based on CNET editorial ratings and Amazon.com user reviews, and discuss competing interpretations of the significant differences that emerge from this comparison. As the first empirical study of software versioning that is based on both subjective and econometrically estimated measures of quality, this paper provides a framework for testing a wide variety of results in IS that are based on related models of vertical differentiation, and its findings have important implications for studies that treat web-based user ratings as cardinal data.Information Systems Working Papers Serie

Framework for a sustainable ERP license model in an increasingly competitive software market

A research report submitted to the Faculty of Engineering and the Built Environment, University of the Witwatersrand, in fulfilment of the requirements for the degree of Master of Science in Engineering, under the supervision of Prof. I. Botef. Johannesburg, July 2015Enterprise Resource Planning (ERP) systems have notoriously complex license models. Whilst the ERP market has been dominated since the 1980‟s by SAP AG and Oracle Corp., this picture is changing with these software giants slowly losing market share to the more than 100 proprietary ERP systems available today. Many of these new entrants wield simpler, more transparent licensing models. This research aims to understand how the current ERP license models behave under varying market conditions with the goal of developing a “framework for a sustainable ERP license model in an increasingly competitive software market”. The research issues are addressed by modelling an actual economic firm with the aid of a software simulation. The aim of this simulation is to model how closely ERP license models link the benefit of the ERP to the cost of the license model. Simpler license models (employed by the new ERP entrants) demonstrated a comparable level of cost/benefit. The research concludes with a proposed framework for a sustainable ERP license model. Potential future research includes investigating the use of gain-share or profit-share models for future software license models

Market acceptance of cloud computing: An analysis of market structure, price models and service requirements

Diese Arbeit betrachtet menschliches Verhalten auf elektronischen Märkten. In diesem Zusammenhang wurden zwei Experimente durchgeführt, die das Auction Fever in Holländischen Auktionen sowie das menschliche Risikoverhalten im sehr hohen Wahrscheinlichkeitsbereich näher untersuchen. Im Experiment zum menschlichen Risikoverhalten wurde speziell die Bewertung hoher Gewinnwahrscheinlichkeiten durch die Teilnehmer untersucht. Hinsichtlich des Auction Fever wurde ein Referenzexperiment beschrieben, kritisiert und auf Basis dieser Kritik ein Folgeexperiment durchgeführt. Hierbei wurde beobachtet, dass Menschen ein vorher gesetztes Limit nicht konstant unterbieten sondern auch teilweise überbieten. Es wurden außerdem Einflussfaktoren für diesen emotionalen Effekt erarbeitet. --Verhandlungstheorie,Experiment