There are three main types of software development business models: on-premises, cloud-based, and hybrid. On-premises software is installed locally by the client and allows for customization but requires local IT support. Cloud-based software is hosted remotely and has faster implementation but the provider is responsible for outages. Hybrid models combine on-premises and cloud-based elements. Revenue streams include paid apps, advertising, subscriptions, and usage-based fees. Source code can be proprietary or open source.

1. Business Modelling
Subodh Poudel

2. Introduction
➔ Software development business models describe how businesses deliver value to
clients.
➔ It describes products that you provide and the way you get compensation.

3. Types
➔ On-premises software development business model
➔ Cloud-based software development business model
➔ Hybrid software business model

4. On-Premise
➔ presupposes that software is installed and functioning within an in-house
infrastructure of the client.
➔ have servers, database servers and storage locally.
➔ has been used by Microsoft, Oracle, and SAP
Pros:
➔ allows to customize the product, aligning it with client’ needs.
➔ allows simple integration with a client’s other corporate systems over the intranet.
➔ Infrastructural costs are covered by the clients

5. On-Premise
Cons:
➔ Implementation of a new on-premises environment requires a lot of time.
➔ The client must have its own IT support staff and in-house server hardware if you provide
corporate-level software.
➔ If on-premises software was customized, upgrading it becomes increasingly more complicated.

6. Cloud-based
➔ a method in which the software functions in the cloud service or at a hosting
provider.
➔ Amazon web service, Netflix
Pros:
➔ have faster implementation timeframes for clients
➔ remote access of product and information
➔ doesn’t require any initial setup costs from users
➔ revenue stream is mostly subscription system

7. Cloud-based
Cons:
➔ compatibility issues between cloud solutions and integration with existing on-premise
enterprise applications that your clients already have
➔ you are fully responsible for service outages that may occur

8. Hybrid
➔ combines a SaaS solution with an on-premise software application
➔ Adobe Creative Cloud combines on-premise products like Photoshop with additional cloud services like
libraries, presets, etc.
➔ Sensitive or highly regulated information (e.g. medical records) can stay on-premise
➔ while operations that don’t involve sensitive data can be conducted in the cloud
➔ On-premise has limited customization opportunities compared to that of a pure cloud version
➔ If software is accessible both from a web interface and an on-premise interface, the amount of front-end
development tasks significantly increases

9. Source-code Licensing
➔ Proprietary :To protect software from copying, companies use proprietary software, as
this software can’t be changed or reused by third-party users.
➔ Open source software business model is totally opposite — users get access to both
software and source code.

10. Revenue Streams
➔ Paid apps. Customers are charged for installing a product. Ex: Minecraft
➔ In-app advertising. The application is free,however,you sell app places for advertising. Ex: Facebook
➔ In-app purchases. The application is free, but you earn from selling products or services via an app.
➔ Subscriptions. Users pay annually or monthly a subscription fee. Ex: Netflix
➔ Usage-based software revenue model. Customers pay only for what they use. Ex: Facebook Ads
➔ Charges for support, enterprise services, and consulting.

11. Thank you !
Have a nice day :)