Also, in my line of work, the person who ULTIMATELY ends up paying the price is usually the taxpayer. You see, costs of software trickle down to our clients, most of whom are either government themselves, or else are government contractors.
Yeah, but that's reductio ad absurdum logic. ULTIMATELY, the taxpayer ends up paying the price for every toilet flush in a federal building. $1,000 software ... or $10,000 software, for that matter ... is chump change in the grand scheme of business, especially with the government.
When I worked as a salesman at Best Buy (before I moved to the Geek Squad) this Air Force recruiter would ALWAYS come in and try to get me to sign up for the Air Force. I realize that choice would have been much better than selling computers to people who generally don't deserve technology, but if I really wanted to sign up for the USAF, I would have done it right out of High School.
Also had a few people talk to me about me coming over to their house to do some repair work on the side. I woulda done it... But some people here in Ohio are just scary lookin'.
Not at all. The cost of the software is only one to two levels away from the government (depending on whether we are a contractor or a subcontractor), whose budget is made from taxpayer funds.
If we have to buy a piece of software specifically for the project, and it will be of no use to us ever again, that is a direct cost, fully charged to the contract.
If we use a piece of software over multiple contracts, then that is included in the other overhead costs.
I've worked in Government contract regulation compliance. I've seen exactly how these things are supposed to be charged, as well as how they are charged, and I can vouch that it is a very direct (or indirect, in the sense of overhead not distance) line between the software costs and the price the client pays.
But, in an objective sense, if a company sells a software product, it's priced where the market will support it. From a similarly simplistic view, if the purchaser is able to use it as a tool to make money it wasn't more expensive than they can afford. As for licenses, my understanding is that it's meant to mimic a physical good, like a hammer or truck. Just like a truck, you can have one employee use it for a task at a time. There is no physical way to have two people use a hammer at the same time; software is intended to be sold the same way.
It just annoys me when customers of any sort think they're entitled to anything, or at least more than business partners who are willing to give qualitiy goods and services for their money.
edit: I didn't really want to start a debate about the ethics of software licensing. Just rant about customer hyper-entitlement.
But, in an objective sense, if a company sells a software product, it's priced where the market will support it. From a similarly simplistic view, if the purchaser is able to use it as a tool to make money it wasn't more expensive than they can afford.
As for licenses, my understanding is that it's meant to mimic a physical good, like a hammer or truck. Just like a truck, you can have one employee use it for a task at a time. There is no physical way to have two people use a hammer at the same time; software is intended to be sold the same way.
It just annoys me when customers of any sort think they're entitled to anything, or at least more than business partners who are willing to give qualitiy goods and services for their money.
You are kidding yourself if you believe that the market sets the price. In the case of software (where supply is technically infinite) the market-set price would eventually become extremely low. Now, the market DOES support the price, but that doesn't mean that price is where it "should" be, just that most companies are able to deal with it.
It DOES create a steep barrier to entry into the industries that require the software, though, which I personally find bothersome. Some one spoke of government grantsto start small businesses earlier, and while the socially liberal side of me thinks that it is great that these projects exist, the fiscal conservative in me is concerned that the government shouldn't have to be subsidizing these high software prices.
Finally, the licenses DO NOT mimic physical goods. You don't have to pay extra to allow a hammer to be used by some one else after the current user is done, but with software a floating license is more expensive than one which allows installation to only one computer.
I'm not saying that I am ENTITLED to anything more than the agreement I (or my company) entered in to. I obey the limitations of my license regardless of how I feel about them. I am just sayingthat yes, they are ridiculous and unfair, and border on extortion in my opinion.
I don't know about government software, but design software is very fairly priced. CS3 isn't targeted at a mass market, it's targeted at graphics professionals who, if they aren't imbeciles, will be using it to generate weekly turnover often in excess of the price tag. It isn't a simple program, it's a highly complex collection of software that immeasurably improves work-flow in a design environment. Furthermore, once you've bought into it, it's relatively cheap to upgrade and only needs to be upgraded on average every 3 to 4 years at most in practical terms (even if upgrades might be more frequent, they aren't essential immediately).
The only issue with the price tag comes with the dual expectations that design should be cheap and that the software should be easily available. It's not an issue of elitism. There are alternatives for non-professionals - if all you want to do is create a local newsletter or edit your holiday snaps you can buy limited edition versions of Photoshop or it's rivals and amateur DTPs such as Word, so it's not as if graphic editing is entirely out of the grasp of people on a budget. CS3 is several degrees of magnitude more powerful than those alternatives but so is the sound system at Wembley Stadium and you don't see me bitching about how much it would cost me to get a comparable system wired in at home legally.
Proportionally to the amount of work involved in creating it, the intended target market, the value it holds to them, the money they can make using it and the limited size of that market, software suites like CS3 are perfectly fairly priced.
The issue of the expectation of cheap design is another issue entirely. Designers fuck themselves and all other designers in the ass by capitulating to readily to the expectations of those who undervalue design. Design costs time. Nothing more, nothing less. It doesn't hold some magical, imperceptible value that allows you to extort customers. Nor should it be virtually free because it's just drawing pretty pictures. The reality is that good design is critical to modern businesses and at the same time takes a certain amount of time to create. This makes it a very simple issue to price fairly and sell without guilt, but there's a huge wave of designers who seem to think that pricing is an unfathomable art and charging anything more than the price of a cheap lunch is morally horrifying.
If you can't find people willing to pay a fair price for design, you're looking in the wrong places. If people aren't willing to pay you a fair hourly wage, why would you want to work for them?
Not at all. The cost of the software is only one to two levels away from the government (depending on whether we are a contractor or a subcontractor), whose budget is made from taxpayer funds.
The impact on the taxpayer is so miniscule that it just doesn't make sense to point to it as a net negative for high production software costs. When measured against expenditures for production itself, the second- or third-hand cost of production software would barely be a decimal blip on the government spending spreadsheet.
If we have to buy a piece of software specifically for the project, and it will be of no use to us ever again, that is a direct cost, fully charged to the contract.
Except that print shops wouldn't bid on video production contracts and that most contractors stay within their lanes or specialties. Moreover, contracts like those usually aren't awarded unless the contractor has done work in that field in the past. Thus, they're likely already to own the software.
If we use a piece of software over multiple contracts, then that is included in the other overhead costs.
Understood.
I've worked in Government contract regulation compliance. I've seen exactly how these things are supposed to be charged, as well as how they are charged, and I can vouch that it is a very direct (or indirect, in the sense of overhead not distance) line between the software costs and the price the client pays.
I understand what you're saying -- I used to do contract work for the Army and DoD -- but my point is, the costs are more or less insignificant when it finally gets down to the taxpayer. And, for the production contracts I've seen, the software costs are a small fraction of the overall cost.
I only have to pay $200 per year to keep everything upgraded for my work. Of course, that is all individual costs. Luckily that's like, 4 hours of accompanying voice lessons.
It DOES create a steep barrier to entry into the industries that require the software, though, which I personally find bothersome. Some one spoke of government grantsto start small businesses earlier, and while the socially liberal side of me thinks that it is great that these projects exist, the fiscal conservative in me is concerned that the government shouldn't have to be subsidizing these high software prices.
How much would it cost to get me started running my own design business?
A half decent computer - £2000
CS3 - £2000 (probably cheaper, but lets add in some extra software just for the sake of argument)
A website - £50 (I'll design it myself with CS3)
A deposit on a small office because I'm flash and don't want to work from home - £1000
A mailout to send to prospective clients - £200 (should easily get me a few thousand half-decent mailouts printed)
So....call it £5500. Screw government grants, I'll get a bank loan. Hell, the bank would probably give me an overdraft for that little money.
Now...I'm going to charge £35 and hour (pretty cheap, but I'm on my own so I have very few overheads). Estimate 30 billable hours. Subtract rent on that fully serviced office - what? £100 a week. Probably less, but lets say for argument. I'm taking in £950 a week. Even with interest, that bank loan is paid off the first year of trading.
Ok, so in America you don't have a National Health Service so you want to consider things like health insurance, but then CS3 is about half the price over there :P
Design is way cheaper to access than, say, running a store. Especially proportional to the potential profits. The software is expensive, but that and a computer are virtually your only expenses.
I only have to pay $200 per year to keep everything upgraded for my work. Of course, that is all individual costs. Luckily that's like, 4 hours of accompanying voice lessons.
You get paid $50/hour for accompanying voice lessons? Geez, how much does the voice teacher charge per lesson? Maybe I should've practiced piano more instead of doing homework.
As for SolidWorks, you get the upgrade with the cost of your maintainence subscription. We just upgraded our engineering department to 2008 - the whole "Now you can apply point forces in COSMOS without a work-around" thing is really nice. Yeah, the entry cost for the software package is really high, but it isn't up to SolidWorks to look out for small businesses, their responsibility is to themselves. If they figure an $8k price per seat is the peak of their profit curve, then they'd be stupid not to sell right there.
And it really does save time, especially in a joint manufacturing/design place. You make your CAD model, feed that model to the CAM software, add a little routing, put the raw material in the machine, and you quickly have an extremely accurate part.
Boilerbird on
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I only have to pay $200 per year to keep everything upgraded for my work. Of course, that is all individual costs. Luckily that's like, 4 hours of accompanying voice lessons.
You get paid $50/hour for accompanying voice lessons? Geez, how much does the voice teacher charge per lesson? Maybe I should've practiced piano more instead of doing homework.
As for SolidWorks, you get the upgrade with the cost of your maintainence subscription. We just upgraded ours to 2008 - the whole "Now you can apply point forces in COSMOS without a work-around" thing is really nice. Yeah, the entry cost for the software package is really high, but it isn't up to SolidWorks to look out for small businesses, their responsibility is to themselves. If they figure an $8k price per seat is the peak of their profit curve, then they'd be stupid not to sell right there.
Only if you keep the subscription going. I had it in 2006 but didn't buy it last year, which screwed me. My fault, though.
You're right about the cost to the individual taxpayer being miniscule, what I was getting at was more that by overcharging for software, people ar eventually just overcharging themselves. There is a LOT of waste in governmental budgets (I'm talking both National and local levels here) and while a thousand dollars here or there may not be a lot relatively, it does add up.
Please indulge me while I lament with you for a moment.
I don't know how closely you personally dealt with the DCAA, but when I was interning with Honeywell part of my job actually involved reading the DCAM, and putting certain parts of it into terms that the top executives of our branch (HTSI) could understand. I had a small advantage in that my father had been a DCAA auditor when I was young, and worked in consulting to government contractors since leaving the government, but it is still no small task.
I had to read a bit of the FAR, and DFARS, and CAS as well, but nothing will EVER compare to being forced to read the entire DCAM chapter on Indirect/ODCs.
As a seperate thought, I just want to clarify, since it's been burried in my other posts, that my biggest issue is not the actual price tag on the software, but the variable pricing on additional copies/licenses. The variable cost to the software firm of each individual license is essentially $0, meaning that the $TEXAS that they charge for them is pure profit (or, technically, pure contribution margin) which is ridiculous considering how exorbinant those prices are.
Evander on
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amateurhourOne day I'll be professionalhourThe woods somewhere in TennesseeRegistered Userregular
As a seperate thought, I just want to clarify, since it's been burried in my other posts, that my biggest issue is not the actual price tag on the software, but the variable pricing on additional copies/licenses. The variable cost to the software firm of each individual license is essentially $0, meaning that the $TEXAS that they charge for them is pure profit (or, technically, pure contribution margin) which is ridiculous considering how exorbinant those prices are.
agreed. I work for a state government and the budgeting headaches alone to get windows xp, office, and several other "necessary" programs on three or four hundred systems is a freaking nightmare every year when it's time for renewals.
I only have to pay $200 per year to keep everything upgraded for my work. Of course, that is all individual costs. Luckily that's like, 4 hours of accompanying voice lessons.
You get paid $50/hour for accompanying voice lessons? Geez, how much does the voice teacher charge per lesson? Maybe I should've practiced piano more instead of doing homework.
Yeah, I'm actually a reasonably cheap pianist. It depends on where you go, but in NYC it's about $100 a week for a lesson with the teacher and $100 for the pianist. Since I'm in State College, PA, my rate is a lot lower.
When you consider that I have 15 years of lessons, 4 years of playing professionally, ability in all western styles and a few eastern styles, and that I spend 2-4 hours a day practicing on top of up to 7 hours accompanying, then it starts being a little less absurd. Plus the people I'm accompanying aren't the "I'm going to take voice lessons for fun and maybe learn about music and so I can look good at a Kareoke bar!" crowd, they're the people who will be singing professionally, or have music as part of their job, so they can't just go to someone who's parents made them take piano back when they were 10 and then stopped but can play Journey.
You're right about the cost to the individual taxpayer being miniscule, what I was getting at was more that by overcharging for software, people ar eventually just overcharging themselves. There is a LOT of waste in governmental budgets (I'm talking both National and local levels here) and while a thousand dollars here or there may not be a lot relatively, it does add up.
Absolutely. I've noticed - especially in regards to video and print - that niche production contractors can swindle uninformed PMs and contracting departments for some pretty hefty sums. It must be frustrating as hell auditing a lot of that garbage.
Please indulge me while I lament with you for a moment.
By all means.
I don't know how closely you personally dealt with the DCAA
Out of Belvoir? Used to date a girl who worked there, way back when.
but when I was interning with Honeywell part of my job actually involved reading the DCAM, and putting certain parts of it into terms that the top executives of our branch (HTSI) could understand.
Holy shit. That thing is something like 1,000 pages, right? Ouch.
I had a small advantage in that my father had been a DCAA auditor when I was young, and worked in consulting to government contractors since leaving the government, but it is still no small task.
Man, one of these days I'll be able to rock a consulting gig. Flexible hours and a metric shitload of dough. Especially in the DC area.
I had to read a bit of the FAR, and DFARS, and CAS as well, but nothing will EVER compare to being forced to read the entire DCAM chapter on Indirect/ODCs.
That sounds absolutely nightmarish. I mean, government manuals and guides are dry enough already ... but auditing policy and procedure? How'd your head not explode?
Honestly, the scariest thing about the whole job was that I had something of an affinity for it. Luckily I didn't have to read the whole manual, just the entire Indirect/ODC controls section (I believe it is section 10 of chapter 5; this stuff is still burned into my brain) as well as a few other smaller bits and pieces.
And yeah, consulting is where I'd love to end up as well. Unfortunately folks want you to have some ammount of experience and expertise before they'll hire you as a consultant, so I have to put in my time in the "real" workforce for now. My plan is to try to get a position within the federal government after I complete my degree, and then use that as a springboard into consulting.
I've actually considered DCAA a few times, as crazy as it sounds. I'm already familiar with the manual, and my father still has a few contacts there.
My plan is to try to get a position within the federal government after I complete my degree, and then use that as a springboard into consulting.
That's pretty much what my old branch chief did and she's sitting pretty. From what I've seen, liberal arts majors with little experience can bring in $60,000-$85,000 doing defense contracting in the DC area. Specialized folks? Oh man. Some of the DoD RM and ORSA contracts are absurdly lucrative.
It occasionally feels like war profiteering - especially with no real end in sight for Iraq and Afghanistan - but at the end of the day, you're providing support to the armed forces without all the potential nastiness of enlistment.
It occasionally feels like war profiteering - especially with no real end in sight for Iraq and Afghanistan - but at the end of the day, you're providing support to the armed forces without all the potential nastiness of enlistment.
My father was a hippy in his youth who ended up working for the defense department. He rationalized it by saying that he was making sure that the government was not spending too much money needlessly on the things they were using to make war.
My grandfather actually worked in procurement for the Government, way back when, so if I end up taking a governmetn Job I will be carrying out a family tradition, of sorts.
You are kidding yourself if you believe that the market sets the price. In the case of software (where supply is technically infinite) the market-set price would eventually become extremely low. Now, the market DOES support the price, but that doesn't mean that price is where it "should" be, just that most companies are able to deal with it.
It DOES create a steep barrier to entry into the industries that require the software, though, which I personally find bothersome. Some one spoke of government grantsto start small businesses earlier, and while the socially liberal side of me thinks that it is great that these projects exist, the fiscal conservative in me is concerned that the government shouldn't have to be subsidizing these high software prices.
Finally, the licenses DO NOT mimic physical goods. You don't have to pay extra to allow a hammer to be used by some one else after the current user is done, but with software a floating license is more expensive than one which allows installation to only one computer.
I'm not saying that I am ENTITLED to anything more than the agreement I (or my company) entered in to. I obey the limitations of my license regardless of how I feel about them. I am just sayingthat yes, they are ridiculous and unfair, and border on extortion in my opinion.
Naa, the manufacturer sets the price. The market supports it, though.
And licenses are intended to mimic physical goods; someone else can still sit down at that computer to use the product. I do know on the MS side of things, volume licenses generally allow reassignment, and start at a 10% discount off retail; more for increased volume and depending on the reseller. OEM licenses tied to a single machine are an additional discount on top of that.
As a consumer or pro customer, do you not have free or priced-to-your-expectations alternatives? Choosing a specific option that you feel is best, then stating that the price was unfair sounds quite a bit like entitlement to me. And yeah, software standards and formats do make it difficult to break from many companies’ products, but that’s why the market supports those prices; you’re paying for ease of use, interoperability, quality, or standardization.
I do honestly believe a better option will, in the long run, unseat a worse-but-entrenched option, even if over a period of decades. Especially with something as modular and consumer-driven as software. I’d say Apple’s ever-increasing market share is proof; they have a much, much better handle than MS (or various Linux folks) of the needs of everyday consumers.
ability in all western styles and a few eastern styles,
Classical, Jazz, Folk, Pop, show-tunes? I'm at a loss for eastern styles of piano. Unless you meant something completely different.
Classical is really a few different styles, since there are different performance practices for each period, Jazz, Theater, Pop, Folk again is a few different since there are different styles for American and Euopean folk, and a lot of eastern styles from british colonies use piano as an instrument, and for that matter there is eastern-influenced music that is written for western instruments by western composers, which uses eastern performance practices.
Really what most pianists fail at is noticing the difference between Romantic, Baroque, Classical, Contemporary, and Early music. Hell a lot of pianists can't read basso continuo. Also a lot of classically trained pianists claim to be able to do Theater and just play it like it's classical music and it sounds awful.
Never saw that one. I'm guessing it was about employees feeling entitled to tips?
Oh shit. I don't want to start anything up. It was a question of: "To tip, or not to tip." in certain situations, and it turned into a heated argument that had everyone up in arms.
Never saw that one. I'm guessing it was about employees feeling entitled to tips?
Employees and socialists claiming tips are an expected portion of the salary, non-waiters and cheap bastards (like myself) who hate the fact that business has found a way to make the consumer directly pay for the food, the service and the wages of the staff all at the same time. Plus the argument of what amount is insulting versus generous.
Honestly both sides have merit and both sides get very heated about it so there's not much left to discuss aside from name calling.
AlienCowThatMoos on
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Nova_CI have the needThe need for speedRegistered Userregular
edited December 2007
How many of you guys saying software is overpriced actually work for a developer?
The software I developed goes out at $15K base cost. With additions, service and hardware packages, we've sold our software for upwards of $60K. Overcharging? Fuck you. Do you have any idea what it takes to not only develop something at an enterprise level, but sell it, support it and install it? Hell, take away the level of service we offer with on site installations done by us and something selling for 10 fucking grand is a deal.
Oh, btw, we don't make a ton of money. Overhead is brutal for development because the cost is borne up front. You spend a year and a half developing something that makes you no money until it is complete. So these developers take a real risk by investing capital in a project that may fail right out of the gate.
We don't make a lot of money off of our real expensive stuff. Most of our profit comes from tiny little custom software programs we write for handheld scanners and wireless RFID terminals. Personally, I think our flagship software is worth more than what we sell it for, but we're trying to bust into a market that's very competitive. And we still sell it for more than any of the costs you guys are bitching about.
someone else can still sit down at that computer to use the product.
That's a bullshit answer. That's like saying that in order for some one else to use your hammer you have to hand them your entire toolbelt. Like I said before, giving up my PC for some oneelse to use means that I can't get work done while they are using it. Additionally, while I happen to use a laptop, many people use desktops at work, meaning that some one else using their PC would entail them giving up their entire cubicle/office for that period of time. FAR different for handing some one else a hammer.
And yeah, software standards and formats do make it difficult to break from many companies’ products, but that’s why the market supports those prices; you’re paying for ease of use, interoperability, quality, or standardization.
That "justification" is EXACTLY how monopolies work. You don't HAVE to use what they offer, but if you do you are paying extra for the benefit of getting to have the one thing that does what you need to have done. The market supports it because of inelasticity, not because it is a fair market price.
I do honestly believe a better option will, in the long run, unseat a worse-but-entrenched option, even if over a period of decades. Especially with something as modular and consumer-driven as software. I’d say Apple’s ever-increasing market share is proof; they have a much, much better handle than MS (or various Linux folks) of the needs of everyday consumers.
Apple's market share is increasing in consumer homes, not in businesses. Sure, in the long run everything is elastic, but the virtual monopolies of companies like Microsoft or Adobe mean that the long run we're talking about is EXTREMELY distant on the horizon. Unless everyone were to switch at one time, it would be crazy for any one firm to suddenly decide to switch to an incompatable product to wht everyone else is using.
The software I developed goes out at $15K base cost. With additions, service and hardware packages, we've sold our software for upwards of $60K. Overcharging? Fuck you. Do you have any idea what it takes to not only develop something at an enterprise level, but sell it, support it and install it? Hell, take away the level of service we offer with on site installations done by us and something selling for 10 fucking grand is a deal.
How much does it cost you for each individual license that you sell?
THAT is my point.
Charge more up front, and allow customers greater freedom with how they use the product, or at least charge a fair rate for multiple licenses after the first.
I fully understand and appreciate that you need to make up developement costs, but the high prices on items with $0 variable costs (multiple licenses for the same piece of software) are completely unreasonable.
Evander, a company could just think ahead and figure out how many licenses they need, then buy that many. Having software companies charge more and make the licenses more flexible is actually harmful to companies who can, y'know, actually plan ahead. They have to pay more because you don't want to have to think about your usage.
Just buy as many as you need. Need a few, pay a little. Need a lot, pay a lot. It's easy.
How much does it cost you for each individual license that you sell?
THAT is my point.
Charge more up front, and allow customers greater freedom with how they use the product, or at least charge a fair rate for multiple licenses after the first.
I fully understand and appreciate that you need to make up developement costs, but the high prices on items with $0 variable costs (multiple licenses for the same piece of software) are completely unreasonable.
....? I know that software doesn't compare to other things, but going back to that Ford example, how much does it cost Ford to roll a vehicle through the assembly line. Anywhere close to the $30K you spend on a truck? So, does Ford offer a deal to companies "Hey, buy the first one at full price and all subsequent orders for trucks from us will be priced at cost of manufacture." Yeah. I doubt they do that.
So lets talk licenses. Our software is a database program. I'll skip the sales pitch and just say it's badass. We charge on a sliding scale based on how many people will be accessing the server at once. In other words, you only got a couple people that are gonna use it? Okay, here's the 5 simultaneous connections license. You gonna be running your entire company's assets through this with a need for 50 people to be online at once? Here's the unlimited license for $Alberta (Or $Texas if you're 'merican). Why do we do that? I mean, it doesn't change our cost at all if they have one person using it or fifty. So we must be fucking our larger clients right?
Wrong.
Guess who calls for the most support? Guess who wants us onsite more than anyone else? Go ahead. I'll give you three guesses but you'll only need one.
The cost of software development doesn't stop when the last line of code is written. We charge larger amounts for more users because we're charging for support.
However, let's get away from server software. Something like Photoshop where it's only one person at a time. Why can't a company charge full price for every instance of its use? Why is it wrong to expect a company that wants to use two things to have to buy two things instead of one and then just making a copy of it. If you could magically replicate a Ford truck at NO COST, would you expect Ford to just start giving away their technology after a single purchase?
You know what? Find a way to eliminate piracy and I'll agree software prices need to come down. But as long as another copy of the product can be produced by anyone with absolutely no cost to that person and 90% of the population has no compunction about doing it, software will continue to be priced the way it is.
Evander, a company could just think ahead and figure out how many licenses they need, then buy that many. Having software companies charge more and make the licenses more flexible is actually harmful to companies who can, y'know, actually plan ahead. They have to pay more because you don't want to have to think about your usage.
Just buy as many as you need. Need a few, pay a little. Need a lot, pay a lot. It's easy.
It's also wasteful. If one employee will only need to use that software one time in their entire career, it's a lot to spend for that one instance.
Not to mention that not EVERYTHING can be planned in advance. My company gets new contracts all the time, so we don't always know what we're going to be needing a year from now.
Finally, it still does nothing about the absurd variable pricing to variable cost ratio.
....? I know that software doesn't compare to other things, but going back to that Ford example, how much does it cost Ford to roll a vehicle through the assembly line. Anywhere close to the $30K you spend on a truck? So, does Ford offer a deal to companies "Hey, buy the first one at full price and all subsequent orders for trucks from us will be priced at cost of manufacture." Yeah. I doubt they do that.
Ford doesn't limit your usage of the truck. Additionally, when you buy the ford truck, you don't justbuy the rights to use the truck; you buy the entire truck itself and all of its componants. When you are done with the truck, you can resell it, as a whole or buy individual componants, or repurpose it however you like.
Software licenses are ENTIRELY different from Ford trucks, making the Ford Truck comparison irrelevant.
Evander, if I am understanding you correctly, then this is what you would like to see in enterprise level software:
Small Business A buys the software for one person to use. It costs 10k.
Giant corporation B buys the software for 200 people to use. It costs 10k.
This makes even less sense than what you're arguing against (cost per license).
edit:: I do think that shifting the licenses shouldn't cost more, though. That should be standard practice when dealing with software for a corporation.
It wouldn't be difficult to charge for tech support seperately from charging for the software, or charge differently for the software based on certain general tiers of users, rather than each individual user, to account for increased tech support costs.. I'll recognize that it could potentially be viewed as a variable cost, but I am sure that the average variable cost of tech support is FAR less than the variable pricing for multiple users.
The problem with this explaination is that you are saying that the fact that many people pirate software justifies oversharging the folks who don't. The only people being punished are those who are actually obeying the rules. Not to mention that high software costs, and restrictive EULAs, are some of the leading reasons behind piracy. By shirking responsibility for the state of the market, and passing the increased cost on to the consumer, you are just perpetuating the entire cycle.
Evander, if I am understanding you correctly, then this is what you would like to see in enterprise level software:
Small Business A buys the software for one person to use. It costs 10k.
Giant corporation B buys the software for 200 people to use. It costs 10k.
This makes even less sense than what you're arguing against (cost per license).
edit:: I do think that shifting the licenses shouldn't cost more, though. That should be standard practice when dealing with software for a corporation.
Honestly, I think what would make the most sense would be either tiered systems, or a system based in contracting the software to the company, rather than selling individual licenses.
Alternatively, I'd like a system exactly like it is now, except the intial cost is HIGHER, and then the cost for each additional license is lower. If licenses are going to be out of the price range for smal businesses, might as well run with that, and then make the multiple licenses priced more in acordance with what they actually cost the developer.
I honestly don't even mind the concept of only one person being able to use the software at a time, but the current standards for licenses are more restrictive than that.
ability in all western styles and a few eastern styles,
Classical, Jazz, Folk, Pop, show-tunes? I'm at a loss for eastern styles of piano. Unless you meant something completely different.
Classical is really a few different styles, since there are different performance practices for each period, Jazz, Theater, Pop, Folk again is a few different since there are different styles for American and Euopean folk, and a lot of eastern styles from british colonies use piano as an instrument, and for that matter there is eastern-influenced music that is written for western instruments by western composers, which uses eastern performance practices.
Really what most pianists fail at is noticing the difference between Romantic, Baroque, Classical, Contemporary, and Early music. Hell a lot of pianists can't read basso continuo. Also a lot of classically trained pianists claim to be able to do Theater and just play it like it's classical music and it sounds awful.
Yeah, sorry for lumping classical all together there. I'm a mediocre pianist at best. I took piano lessons from kindergarten through high school, and went to an arts school and studied it there. But until my senior year I was a terrible student. I finally buckled down and practiced then, but it's kind of too late. I wasted my impressionable years. Where do you accompany? Are you in New York? If so, have you ever worked with Arthur Marks?
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Yeah, but that's reductio ad absurdum logic. ULTIMATELY, the taxpayer ends up paying the price for every toilet flush in a federal building. $1,000 software ... or $10,000 software, for that matter ... is chump change in the grand scheme of business, especially with the government.
Also had a few people talk to me about me coming over to their house to do some repair work on the side. I woulda done it... But some people here in Ohio are just scary lookin'.
Not at all. The cost of the software is only one to two levels away from the government (depending on whether we are a contractor or a subcontractor), whose budget is made from taxpayer funds.
If we have to buy a piece of software specifically for the project, and it will be of no use to us ever again, that is a direct cost, fully charged to the contract.
If we use a piece of software over multiple contracts, then that is included in the other overhead costs.
I've worked in Government contract regulation compliance. I've seen exactly how these things are supposed to be charged, as well as how they are charged, and I can vouch that it is a very direct (or indirect, in the sense of overhead not distance) line between the software costs and the price the client pays.
It just annoys me when customers of any sort think they're entitled to anything, or at least more than business partners who are willing to give qualitiy goods and services for their money.
edit: I didn't really want to start a debate about the ethics of software licensing. Just rant about customer hyper-entitlement.
You are kidding yourself if you believe that the market sets the price. In the case of software (where supply is technically infinite) the market-set price would eventually become extremely low. Now, the market DOES support the price, but that doesn't mean that price is where it "should" be, just that most companies are able to deal with it.
It DOES create a steep barrier to entry into the industries that require the software, though, which I personally find bothersome. Some one spoke of government grantsto start small businesses earlier, and while the socially liberal side of me thinks that it is great that these projects exist, the fiscal conservative in me is concerned that the government shouldn't have to be subsidizing these high software prices.
Finally, the licenses DO NOT mimic physical goods. You don't have to pay extra to allow a hammer to be used by some one else after the current user is done, but with software a floating license is more expensive than one which allows installation to only one computer.
I'm not saying that I am ENTITLED to anything more than the agreement I (or my company) entered in to. I obey the limitations of my license regardless of how I feel about them. I am just sayingthat yes, they are ridiculous and unfair, and border on extortion in my opinion.
The only issue with the price tag comes with the dual expectations that design should be cheap and that the software should be easily available. It's not an issue of elitism. There are alternatives for non-professionals - if all you want to do is create a local newsletter or edit your holiday snaps you can buy limited edition versions of Photoshop or it's rivals and amateur DTPs such as Word, so it's not as if graphic editing is entirely out of the grasp of people on a budget. CS3 is several degrees of magnitude more powerful than those alternatives but so is the sound system at Wembley Stadium and you don't see me bitching about how much it would cost me to get a comparable system wired in at home legally.
Proportionally to the amount of work involved in creating it, the intended target market, the value it holds to them, the money they can make using it and the limited size of that market, software suites like CS3 are perfectly fairly priced.
The issue of the expectation of cheap design is another issue entirely. Designers fuck themselves and all other designers in the ass by capitulating to readily to the expectations of those who undervalue design. Design costs time. Nothing more, nothing less. It doesn't hold some magical, imperceptible value that allows you to extort customers. Nor should it be virtually free because it's just drawing pretty pictures. The reality is that good design is critical to modern businesses and at the same time takes a certain amount of time to create. This makes it a very simple issue to price fairly and sell without guilt, but there's a huge wave of designers who seem to think that pricing is an unfathomable art and charging anything more than the price of a cheap lunch is morally horrifying.
If you can't find people willing to pay a fair price for design, you're looking in the wrong places. If people aren't willing to pay you a fair hourly wage, why would you want to work for them?
The impact on the taxpayer is so miniscule that it just doesn't make sense to point to it as a net negative for high production software costs. When measured against expenditures for production itself, the second- or third-hand cost of production software would barely be a decimal blip on the government spending spreadsheet.
Except that print shops wouldn't bid on video production contracts and that most contractors stay within their lanes or specialties. Moreover, contracts like those usually aren't awarded unless the contractor has done work in that field in the past. Thus, they're likely already to own the software.
Understood.
I understand what you're saying -- I used to do contract work for the Army and DoD -- but my point is, the costs are more or less insignificant when it finally gets down to the taxpayer. And, for the production contracts I've seen, the software costs are a small fraction of the overall cost.
How much would it cost to get me started running my own design business?
A half decent computer - £2000
CS3 - £2000 (probably cheaper, but lets add in some extra software just for the sake of argument)
A website - £50 (I'll design it myself with CS3)
A deposit on a small office because I'm flash and don't want to work from home - £1000
A mailout to send to prospective clients - £200 (should easily get me a few thousand half-decent mailouts printed)
So....call it £5500. Screw government grants, I'll get a bank loan. Hell, the bank would probably give me an overdraft for that little money.
Now...I'm going to charge £35 and hour (pretty cheap, but I'm on my own so I have very few overheads). Estimate 30 billable hours. Subtract rent on that fully serviced office - what? £100 a week. Probably less, but lets say for argument. I'm taking in £950 a week. Even with interest, that bank loan is paid off the first year of trading.
Ok, so in America you don't have a National Health Service so you want to consider things like health insurance, but then CS3 is about half the price over there :P
Design is way cheaper to access than, say, running a store. Especially proportional to the potential profits. The software is expensive, but that and a computer are virtually your only expenses.
You get paid $50/hour for accompanying voice lessons? Geez, how much does the voice teacher charge per lesson? Maybe I should've practiced piano more instead of doing homework.
As for SolidWorks, you get the upgrade with the cost of your maintainence subscription. We just upgraded our engineering department to 2008 - the whole "Now you can apply point forces in COSMOS without a work-around" thing is really nice. Yeah, the entry cost for the software package is really high, but it isn't up to SolidWorks to look out for small businesses, their responsibility is to themselves. If they figure an $8k price per seat is the peak of their profit curve, then they'd be stupid not to sell right there.
And it really does save time, especially in a joint manufacturing/design place. You make your CAD model, feed that model to the CAM software, add a little routing, put the raw material in the machine, and you quickly have an extremely accurate part.
-So sayeth the wise Alaundo
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Only if you keep the subscription going. I had it in 2006 but didn't buy it last year, which screwed me. My fault, though.
Please indulge me while I lament with you for a moment.
I don't know how closely you personally dealt with the DCAA, but when I was interning with Honeywell part of my job actually involved reading the DCAM, and putting certain parts of it into terms that the top executives of our branch (HTSI) could understand. I had a small advantage in that my father had been a DCAA auditor when I was young, and worked in consulting to government contractors since leaving the government, but it is still no small task.
I had to read a bit of the FAR, and DFARS, and CAS as well, but nothing will EVER compare to being forced to read the entire DCAM chapter on Indirect/ODCs.
agreed. I work for a state government and the budgeting headaches alone to get windows xp, office, and several other "necessary" programs on three or four hundred systems is a freaking nightmare every year when it's time for renewals.
Yeah, I'm actually a reasonably cheap pianist. It depends on where you go, but in NYC it's about $100 a week for a lesson with the teacher and $100 for the pianist. Since I'm in State College, PA, my rate is a lot lower.
When you consider that I have 15 years of lessons, 4 years of playing professionally, ability in all western styles and a few eastern styles, and that I spend 2-4 hours a day practicing on top of up to 7 hours accompanying, then it starts being a little less absurd. Plus the people I'm accompanying aren't the "I'm going to take voice lessons for fun and maybe learn about music and so I can look good at a Kareoke bar!" crowd, they're the people who will be singing professionally, or have music as part of their job, so they can't just go to someone who's parents made them take piano back when they were 10 and then stopped but can play Journey.
Absolutely. I've noticed - especially in regards to video and print - that niche production contractors can swindle uninformed PMs and contracting departments for some pretty hefty sums. It must be frustrating as hell auditing a lot of that garbage.
By all means.
Out of Belvoir? Used to date a girl who worked there, way back when.
Holy shit. That thing is something like 1,000 pages, right? Ouch.
Man, one of these days I'll be able to rock a consulting gig. Flexible hours and a metric shitload of dough. Especially in the DC area.
That sounds absolutely nightmarish. I mean, government manuals and guides are dry enough already ... but auditing policy and procedure? How'd your head not explode?
Honestly, the scariest thing about the whole job was that I had something of an affinity for it. Luckily I didn't have to read the whole manual, just the entire Indirect/ODC controls section (I believe it is section 10 of chapter 5; this stuff is still burned into my brain) as well as a few other smaller bits and pieces.
And yeah, consulting is where I'd love to end up as well. Unfortunately folks want you to have some ammount of experience and expertise before they'll hire you as a consultant, so I have to put in my time in the "real" workforce for now. My plan is to try to get a position within the federal government after I complete my degree, and then use that as a springboard into consulting.
I've actually considered DCAA a few times, as crazy as it sounds. I'm already familiar with the manual, and my father still has a few contacts there.
That's pretty much what my old branch chief did and she's sitting pretty. From what I've seen, liberal arts majors with little experience can bring in $60,000-$85,000 doing defense contracting in the DC area. Specialized folks? Oh man. Some of the DoD RM and ORSA contracts are absurdly lucrative.
It occasionally feels like war profiteering - especially with no real end in sight for Iraq and Afghanistan - but at the end of the day, you're providing support to the armed forces without all the potential nastiness of enlistment.
My father was a hippy in his youth who ended up working for the defense department. He rationalized it by saying that he was making sure that the government was not spending too much money needlessly on the things they were using to make war.
My grandfather actually worked in procurement for the Government, way back when, so if I end up taking a governmetn Job I will be carrying out a family tradition, of sorts.
Naa, the manufacturer sets the price. The market supports it, though.
And licenses are intended to mimic physical goods; someone else can still sit down at that computer to use the product. I do know on the MS side of things, volume licenses generally allow reassignment, and start at a 10% discount off retail; more for increased volume and depending on the reseller. OEM licenses tied to a single machine are an additional discount on top of that.
As a consumer or pro customer, do you not have free or priced-to-your-expectations alternatives? Choosing a specific option that you feel is best, then stating that the price was unfair sounds quite a bit like entitlement to me. And yeah, software standards and formats do make it difficult to break from many companies’ products, but that’s why the market supports those prices; you’re paying for ease of use, interoperability, quality, or standardization.
I do honestly believe a better option will, in the long run, unseat a worse-but-entrenched option, even if over a period of decades. Especially with something as modular and consumer-driven as software. I’d say Apple’s ever-increasing market share is proof; they have a much, much better handle than MS (or various Linux folks) of the needs of everyday consumers.
Classical, Jazz, Folk, Pop, show-tunes? I'm at a loss for eastern styles of piano. Unless you meant something completely different.
Classical is really a few different styles, since there are different performance practices for each period, Jazz, Theater, Pop, Folk again is a few different since there are different styles for American and Euopean folk, and a lot of eastern styles from british colonies use piano as an instrument, and for that matter there is eastern-influenced music that is written for western instruments by western composers, which uses eastern performance practices.
Really what most pianists fail at is noticing the difference between Romantic, Baroque, Classical, Contemporary, and Early music. Hell a lot of pianists can't read basso continuo. Also a lot of classically trained pianists claim to be able to do Theater and just play it like it's classical music and it sounds awful.
Oh shit. I don't want to start anything up. It was a question of: "To tip, or not to tip." in certain situations, and it turned into a heated argument that had everyone up in arms.
Employees and socialists claiming tips are an expected portion of the salary, non-waiters and cheap bastards (like myself) who hate the fact that business has found a way to make the consumer directly pay for the food, the service and the wages of the staff all at the same time. Plus the argument of what amount is insulting versus generous.
Honestly both sides have merit and both sides get very heated about it so there's not much left to discuss aside from name calling.
The software I developed goes out at $15K base cost. With additions, service and hardware packages, we've sold our software for upwards of $60K. Overcharging? Fuck you. Do you have any idea what it takes to not only develop something at an enterprise level, but sell it, support it and install it? Hell, take away the level of service we offer with on site installations done by us and something selling for 10 fucking grand is a deal.
Oh, btw, we don't make a ton of money. Overhead is brutal for development because the cost is borne up front. You spend a year and a half developing something that makes you no money until it is complete. So these developers take a real risk by investing capital in a project that may fail right out of the gate.
We don't make a lot of money off of our real expensive stuff. Most of our profit comes from tiny little custom software programs we write for handheld scanners and wireless RFID terminals. Personally, I think our flagship software is worth more than what we sell it for, but we're trying to bust into a market that's very competitive. And we still sell it for more than any of the costs you guys are bitching about.
That's a bullshit answer. That's like saying that in order for some one else to use your hammer you have to hand them your entire toolbelt. Like I said before, giving up my PC for some oneelse to use means that I can't get work done while they are using it. Additionally, while I happen to use a laptop, many people use desktops at work, meaning that some one else using their PC would entail them giving up their entire cubicle/office for that period of time. FAR different for handing some one else a hammer.
That "justification" is EXACTLY how monopolies work. You don't HAVE to use what they offer, but if you do you are paying extra for the benefit of getting to have the one thing that does what you need to have done. The market supports it because of inelasticity, not because it is a fair market price.
Apple's market share is increasing in consumer homes, not in businesses. Sure, in the long run everything is elastic, but the virtual monopolies of companies like Microsoft or Adobe mean that the long run we're talking about is EXTREMELY distant on the horizon. Unless everyone were to switch at one time, it would be crazy for any one firm to suddenly decide to switch to an incompatable product to wht everyone else is using.
How much does it cost you for each individual license that you sell?
THAT is my point.
Charge more up front, and allow customers greater freedom with how they use the product, or at least charge a fair rate for multiple licenses after the first.
I fully understand and appreciate that you need to make up developement costs, but the high prices on items with $0 variable costs (multiple licenses for the same piece of software) are completely unreasonable.
Just buy as many as you need. Need a few, pay a little. Need a lot, pay a lot. It's easy.
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But this is PA, everything is already outta hand.
....? I know that software doesn't compare to other things, but going back to that Ford example, how much does it cost Ford to roll a vehicle through the assembly line. Anywhere close to the $30K you spend on a truck? So, does Ford offer a deal to companies "Hey, buy the first one at full price and all subsequent orders for trucks from us will be priced at cost of manufacture." Yeah. I doubt they do that.
So lets talk licenses. Our software is a database program. I'll skip the sales pitch and just say it's badass. We charge on a sliding scale based on how many people will be accessing the server at once. In other words, you only got a couple people that are gonna use it? Okay, here's the 5 simultaneous connections license. You gonna be running your entire company's assets through this with a need for 50 people to be online at once? Here's the unlimited license for $Alberta (Or $Texas if you're 'merican). Why do we do that? I mean, it doesn't change our cost at all if they have one person using it or fifty. So we must be fucking our larger clients right?
Wrong.
Guess who calls for the most support? Guess who wants us onsite more than anyone else? Go ahead. I'll give you three guesses but you'll only need one.
The cost of software development doesn't stop when the last line of code is written. We charge larger amounts for more users because we're charging for support.
However, let's get away from server software. Something like Photoshop where it's only one person at a time. Why can't a company charge full price for every instance of its use? Why is it wrong to expect a company that wants to use two things to have to buy two things instead of one and then just making a copy of it. If you could magically replicate a Ford truck at NO COST, would you expect Ford to just start giving away their technology after a single purchase?
You know what? Find a way to eliminate piracy and I'll agree software prices need to come down. But as long as another copy of the product can be produced by anyone with absolutely no cost to that person and 90% of the population has no compunction about doing it, software will continue to be priced the way it is.
It's also wasteful. If one employee will only need to use that software one time in their entire career, it's a lot to spend for that one instance.
Not to mention that not EVERYTHING can be planned in advance. My company gets new contracts all the time, so we don't always know what we're going to be needing a year from now.
Finally, it still does nothing about the absurd variable pricing to variable cost ratio.
Your face is outta hand.
/swish
Ford doesn't limit your usage of the truck. Additionally, when you buy the ford truck, you don't justbuy the rights to use the truck; you buy the entire truck itself and all of its componants. When you are done with the truck, you can resell it, as a whole or buy individual componants, or repurpose it however you like.
Software licenses are ENTIRELY different from Ford trucks, making the Ford Truck comparison irrelevant.
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Small Business A buys the software for one person to use. It costs 10k.
Giant corporation B buys the software for 200 people to use. It costs 10k.
This makes even less sense than what you're arguing against (cost per license).
edit:: I do think that shifting the licenses shouldn't cost more, though. That should be standard practice when dealing with software for a corporation.
It wouldn't be difficult to charge for tech support seperately from charging for the software, or charge differently for the software based on certain general tiers of users, rather than each individual user, to account for increased tech support costs.. I'll recognize that it could potentially be viewed as a variable cost, but I am sure that the average variable cost of tech support is FAR less than the variable pricing for multiple users.
The problem with this explaination is that you are saying that the fact that many people pirate software justifies oversharging the folks who don't. The only people being punished are those who are actually obeying the rules. Not to mention that high software costs, and restrictive EULAs, are some of the leading reasons behind piracy. By shirking responsibility for the state of the market, and passing the increased cost on to the consumer, you are just perpetuating the entire cycle.
Honestly, I think what would make the most sense would be either tiered systems, or a system based in contracting the software to the company, rather than selling individual licenses.
Alternatively, I'd like a system exactly like it is now, except the intial cost is HIGHER, and then the cost for each additional license is lower. If licenses are going to be out of the price range for smal businesses, might as well run with that, and then make the multiple licenses priced more in acordance with what they actually cost the developer.
I honestly don't even mind the concept of only one person being able to use the software at a time, but the current standards for licenses are more restrictive than that.
Yeah, sorry for lumping classical all together there. I'm a mediocre pianist at best. I took piano lessons from kindergarten through high school, and went to an arts school and studied it there. But until my senior year I was a terrible student. I finally buckled down and practiced then, but it's kind of too late. I wasted my impressionable years. Where do you accompany? Are you in New York? If so, have you ever worked with Arthur Marks?