Can you charge for the software you are bundling with your hardware device?

Working for a high-tech company and selling hardware products or primarily hardware based solutions, read on.. While working with one of our customers who happens to be a leading high-tech firm and a market leader, one fine day I realized that the amount of money they were charging for their software was miniscule as compared to the hardware cost they were selling. And often the customer would negotiate well for the software cost, and they would end up not charging for it as well or giving more discount on already low cost. This was not a simple software, it took them quite a bit of time and money to build it but the positioning was more to sell hardware and the software comes bundled with it to manage the hardware.

So, how do you justify the value of software to your customer when you are primarily in the business of selling hardware?

You can go Freemium model. Give a base version free, and then add more performance and features to the advanced version of the software which lets user derive better ROI from the same hardware devices.

Price it Per User.Often works very well while selling to large companies. Automatic revenue addition when more teams start using the software.

Try SaaS pricing. Evaluate if charging monthly and offering a web based version for your software helps you in generating more sales and winning new business

Looking for more ideas on how you can price your software. Download this very useful short eBook from an industry expert Neil Davidson. Download eBook. (right now available for free, hard copy available at Amazon for $9.95).

So what is your experience with pricing software? Do Leave a comment.

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