Cutting edge software pricing model

Robert Lefkowitz has posted an interesting article at O’Reilly’s ONLamp in which he extends traditional option pricing theory to software products. His conclusion? “Perhaps a better way to position the change that OSS is making is this: we’re converting warrants on future maintenance and enhancements into options, which means that instead of having a sole supplier (warrants), we have created a third-party market (options) of these derivatives.” It’s a short article but makes an interesting read.

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