[lally] Re: SPLA

  • From: "kumar pandey" <pandeykum@xxxxxxxxx>
  • To: lally@xxxxxxxxxxxxx
  • Date: Wed, 7 Jun 2006 11:45:28 -0400

Remy sure what you said is logical.  The big assumptions are the number of
years and the number of upgrades.


On 6/7/06, remy <remy@xxxxxxxxxxxxxxxxxxxxxx> wrote:

Hi Kumar,

It would seem that MicroSoft would have this information based on the tons
of data they collect. T think another way to look at this would be in
of finance. If I purchase a piece of software for $100 today and I am
expected to upgrade the software for next 5 years at $20 per year, then I
can determine the PV of the upgrades plus the $100. That would be the
PV of that piece of software. if I were going to lease it, I would want to
make sure that the PV of the lease is equal to the PV of the purchase and
the upgrades.


>Hi folks, >Let me welcome you to the group by putting up a question which I have been >struggling with for the past few days. > >Many of you in the hi-tech world are probably aware that Microsoft has >developed its Services Provider License Agreement (SPLA) to sell software >on a pay as you use basis. this allows enterprises or web developers to >subscribe for the software on a monthly basis as opposed to paying a huge >upfront cost. The financial advantages are obvious to the consumers, they >get to pay off the software costs as business operating expense as opposed >to capital costs. > >My question is around pricing. Microsoft says their software under SPLA >is priced so that customers pay the same amount, over the life of the >software,in paying on a monthly basis, as they would have paid >upfront. Now, how does Microsoft or any other software developer be able >to predict the life of a software when technology is changing so fast? > >Does anyone have any idea what industry standards are? Does anyone have >any idea on how software could be priced and packaged differently. > >Any thoughts, insights will be appreciated. > >-- >Kumar Pandey >Chief Operations Officer >Flatburger Inc.

Kumar Pandey

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