Abstract
Software as a service (SaaS) is a rapidly growing model of software licensing. In contrast to traditional software where users buy a perpetual-use license, SaaS users buy a subscription from the publisher. Whereas traditional software publishers typically release new product features as part of new versions of software once in a few years, publishers using SaaS have an incentive to release new features as soon as they are completed. We show that this property of the SaaS licensing model leads to greater investment in product development under most conditions. This increased investment leads to higher software quality in equilibrium under SaaS compared to perpetual licensing. The software publisher earns greater profits under SaaS while social welfare is also higher
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
