Business Models in the Software Industry

A Reference Site for business models in the software industry

This is a reference site for business development in the software industry.

The goal is to provide you with crisp, up to date information on software business models based on the Business Model Generation approach.

Besides showing the interactions of a software vendor with the partner and with the customer, we use the business model canvas to reveal details of the business models.

Introduction to business models in the software business

Software companies usually have hybrid business models. Each of the business patterns used has its specific characteristics and the combination of them creates a hybrid business model with special characteristics. Related to software ecosystems, there has to be a fit of business models between the companies in the software ecosystem.
Hybrid business models might differ between software vendors to create competitive advantage. So the specific characteristics of hybrid business models might be used to differentiate from the competitors. But that differentiation between companies might also pave the way for a symbiosis in a software ecosystem.

Software vendors usually have hybrid revenue models. The structure of revenue models with their combination of revenue streams, often containing one or more non-monetary compensations, can be a source of competitive advantage in a business model. Related to software ecosystems, there are two aspects. One is, that there might be revenue models specific to the software ecosystem like software ecosystem fees or revenue shares. The other is, that

Revenue models can be used to fund business patterns or businesses that are not connected by causality. This funding might be used to create competitive advantage, e.g. by establishing lower pricing for other revenue streams. It might also be used to subsidize the software ecosystem, e.g. by donations of a commercial software vendor to the open source community.

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Background information used here

For more detailed information, please consider buying the following books:

Mergers and Acquisitions in the Software Industry

(c) Dr. Karl Popp 2017