Business Models in the Software Industry

Revenue share


The software vendor endorses the product of the revenue share partner. if the customer buys the partner´s product, the software vendor gets a share of the partner´s revenue.


Revenue share partnerships are also popular in the software industry and are usually used as door opener into other companies´ customers. Revenue share makes sense if the product offerings of the partner and software vendor are not competitive, but complementing.


Advantages of Revenue share are: software vendor participates in revenue that is generated by other companies, limited cost for software vendor for endorsing other vendor since cost of sales stays with the revenue share partner.




Business Model Canvas for Revenue share

The value proposition of this business model is clearly additional revenues for the partner, who does the revenue share with SAP. For the company engaging with revenue share partners, the generic model is not limited to specific customer segments. But depending on the products for the revenue share there can of course be customer segments.

Incentified by the revenue share, the company gets license, support and maintenance revenue streams.




Key activity is endorsing the partner´s software to start the revenue share, key partners are the software vendors providing the software. Key resources are the sales people hunting for customer contracts triggering the revenue share.

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More details and background information can be found in these two books:


Profit from Software Ecosystems

Title: Profit from software ecosystems

Author:

ISBN: 3842300514



Mergers and Acquisitions in the Software Industry

Title: Mergers and Acquisitions in the software industry - Foundations of due diligence

Author:

ISBN: 3732243818



(c) Dr. Karl Popp 2017


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