Customer-equity valuation in software markets

Abstract

The previous investigations revealed the importance of network effects for valuations in software markets. In the next step the findings on network effects are linked to valuations in software markets based on a customer-centric valuation approach. First, the background of customer-based valuation is presented. Then, a DCF customer equity model is outlined before a real options version is reviewed. As both models reveal the importance of reliable software market models based on solid adoption and diffusion models, these are investigated in the next chapter. Respective insights provide the basis for the development of a network effects framework for valuations in software markets at the end of this part.