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A Study On Versioning Strategy Of Software Products With Network Externalities

Posted on:2009-04-04Degree:MasterType:Thesis
Country:ChinaCandidate:J YaoFull Text:PDF
GTID:2189360272990571Subject:Technical Economics and Management
Abstract/Summary:PDF Full Text Request
Network externalities is an important feature of software products. From the perspective of network externalities, the thesis discusses versioning strategy of software products systematically. On the basis of previous studies, the thesis demonstrates the necessity of versioning strategy from various angles and analyzes the multielements of versioning strategy.Combined with the features of software products and competitive advantages that versioning will bring forth, the thesis makes a qualitative analysis on the validity of versioning first. Then based on the network externalities and combined with the consumer utility function, the thesis continues to construct a game model to discuss the optimality of versioning. The results show that through versioning, software companies can get more profits, higher market share and charge a higher premium for the high-end version. Moreover, the thesis makes a mathematical analysis on the multiple effects of versioning to demonstrate the optimality in-depthly and finds out that appropriate versioning of software products has a positive impact on profits of software companies.In addition, by using the knowledge of marketing, the thesis discusses several aspects of versioning strategy including the basic principles, basic methods, quantity choice and pricing. Finally, the thesis also extends the model of chapter 3 to the case of K (K≥2) versions to get some conclusions about quantity choice and pricing, which appear to be consistent with one of the most common versioning in software products. The results show that software enterprises should provide moderate amount of distinct versions, and the high-end and low-end versions should be maintained enough "quality gap"; the low-end version is often priced low to expand the network size of software products, and the high-end version tends to be priced high in order to obtain main profits.
Keywords/Search Tags:Network Externalities, Software Products, Versioning Strategy
PDF Full Text Request
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