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Software product value model

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Created: Alexiv (25 May 2007)
Last edited: hamishwillee (27 Sep 2012)

Software product value model

Software product value – is a final result where some inputs observed as outflows (left column) are balanced with the inflows (right column). This value might be positive or negative.

Usually, it is believed that a successful software product generates positive value both for the developer and for the users

There are a number of the software users:
- end users;
- conventional users (partners): device manufacturers, service providers; distribution channel partners


Value from the developer’s point of view

- Direct costs
- Additional expenses

- Revenue
- Market penetration*

Value from the end user’s point of view

- Product price
- Possession costs**

- Core functionality satisfaction
- Additional functionalities satisfaction
- Usability and durability

Value from the device manufacturer’s point of view

- Costs
- Device resources consumption

- Ability to generate additional profit

- Ability to attract new customers and increase the loyalty of existing ones within the existing markets*

- Ability to penetrate the new markets

Value from the service provider’s point of view (mobile carriers, content providers, etc.)

- Cost of implementation***
- Operational expenses
- Resources consumption

- Ability to generate additional profit

- Ability to attract new customers and increase the loyalty of existing ones within the existing markets*

- Ability to penetrate the new markets

*Might involve positive or negative shifts for the reputation of the company on the market

**Possession costs - the costs of usage (implies necessities of additional expenses for the user like internet traffic consumption, charging, recycling, etc.)

***Cost of implementation – the costs related to the project implementation

This page was last modified on 27 September 2012, at 08:34.
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