Product Pricing Primer

If you have several competitors and yours is somewhat better, price in the middle. The lowest price will be perceived as the stripped down model even if it is the best. Think refrigerators or televisions. The highest priced one will raise the perceived value of the class.

OTOH if you are selling against an entrenched corporate seller, try an entirely different model. If he is selling a license for $50K per machine, try per seat per year. It lowers the cost of entry but has the potential for huge revenue.

In the software business cost has nothing to do with pricing except that eventually you want your revenue to cover your cost. Cost is for atoms. Software is electrons.