Fog Creek Software
Discussion Board




Businesses WANT to pay for softawre

Open Office 1.0 released
http://zdnet.com.com/2100-1104-897370.html

Interesting experpts:

OpenOffice has been a useable product for months, but the release of a 1.0 version is important from a psychological point of view, since many users and businesses are reluctant to adopt a product before it has reached its first "full" release.

...

Sun said it found that businesses were more receptive to a paid-for product. Industry analysts say moving to a pay basis (link: http://news.zdnet.co.uk/story/0,,s2107492,00.html ) could actually increase StarOffice's penetration in businesses.

MarkTAW
Thursday, May 02, 2002

I agree.  Price has a great deal to do with "perceived value".  A product I worked on many moons ago was seen as an "OK middle-of-the-road product", but the CEO had a great idea to "give away" the product for only the shipping and handling costs...which made us a profit of about $3 on each unit sold.  We managed to give away plenty of copies, but not as many as you'd think; it seemed that people now equated it to shareware apps, and they figured they could download any shareware app they wanted for free, so why would they pay $5 for one?  Needless to say, once we tried selling the product again, the sales were completely dead.

Kevin Tieskoetter
Thursday, May 02, 2002

It is amazing...  Some genius at our underfunded startup decided that we should pay $250,000 for something called "Track" (from Soffront Software) to use as bug tracking software.  Not to mention being overpriced, it performs its simple task all too badly.  It also suffers from Windows-itis.  When something doesn't work the common "answer" is either "did you reboot your computer" or "perhaps you need to reinstall it".

Bugzilla is free, integrates with our version control software and much more usabled and maintainable.  Go figure.

Nat Ersoz
Thursday, May 02, 2002

Hum, didn't you told us before how great TV boxes where and how quick all got developed without a glitch ?

It's now more difficult to believe...

Anonymous Coward
Thursday, May 02, 2002

There a certain amount of marketing-speaking Sun is engaging in. Certainly business would prefer *not* to pay for software, especially software they they already do not pay for like MS Office (commonly bundled with computer purchase). Sun is simply laying the groundwork for charging. I see more complaints about Windows at $99 than MS Office at $450.

That said, it probably makes sense for Sun to charge somewhere between $49 and $149 for an office suite like that. What will make or break it is file format compatibility with MS Office. What features it has is practically irrelevant.

pb
Thursday, May 02, 2002

http://www.cnn.com/TECH/computing/9903/12/cablemodem.idg/

"The success of the Toshiba and Thomson modems points to increasing competition from consumer electronics vendors in a field dominated by networking firms."

Consumer electronics companies now own the modem space.  Cable vendors GI/MOT and SFA have pretty much abondoned it, unable to compete in an open standards based world.

Regarding stupid mistakes?  There is no accounting for start up boards of directors who chose a forestry products sales manager for CEO.  And his babelicious girl friend as Marketing VP.  Yumm, yumm.

Which could always lead to a discussion about how some bad mistakes are more critical than others, and how to correct for them.  Thankfully, they don't  come around here no more.

Nat Ersoz
Thursday, May 02, 2002

"You get what you pay for".

When this mentality is changed, peeps will appreciate open source.

James Ladd
Thursday, May 02, 2002

Its cya and the fact that the buyer/company does not want to take responsibilty for almost anything. If your product is not selling increase the price, add some gui that doesn't do anything, make it fast, and offer a discount on the upgrade if they buy now.

Jeb
Thursday, May 02, 2002

"If StarOffice becomes a profitable business for Sun, enterprises will incur less risk and be more assured of the product's longevity,"  does it for me.

I think most business folks understand business better than most software folks.  I think businesses are willing to pay for value.  Wise software buyers understand that the purchase price is not always a significant part of the total cost of ownership.

I certainly don't think, "You get what you pay for" mentality will ever change nor will the desire to get more than you pay for.

tk
Thursday, May 02, 2002

>> "You get what you pay for".
>> When this mentality is changed, peeps will
>> appreciate open source.

Look at it another way. "Something is worth as much as you're willing to pay for it". If you were responsible for your company's (software) infrastructure, would you want to be using software that was perceived as worthless?

I realise it's a slightly unfair comparison, but the fact is that when you pay for software you're paying for more than just the executable. You want some sort of contractual assurance that any problems will be dealt with.

People also tend to confuse "no-payment" software with "Open Source" software. (Note avoidance of the word "free", which has two very separate meanings).

Penny Arcade sum it up rather nicely:

http://www.penny-arcade.com/view2002-04-29rl.html

Adrian

Adrian Gilby
Thursday, May 02, 2002

I remember back in the 80s when the standard word processor changed every 2 or 3 years.

It cost my company at the time a fortune to cross train all the staff from Display Write 4 to Wordperfect, and the file conversion was a nightmare.

Shortly after I left, they would have probably been forced to migrate to Word.

I shudder to think what moving over to Excel from 123 must have been like.

With Word, businesses have enjoyed over a decade of stability - upgrading to a new version of word was never has problematic.

Businesses do not want that headache again.  If they do go to the trouble of migrating to Staroffice, they don't want the trouble of having to swap again in the near future.

Now we developers know that this possibility is actually less likely, because the code is open source.  Even if Sun went belly up tommorrow, OpenOffice would remain because the source code has been distributed.

However, businesses still don't understand it.  They want the reassurance of a successful corporate entity.  This is why they are happier paying for a product.

Ged Byrne
Friday, May 03, 2002

"I realise it's a slightly unfair comparison, but the fact is that when you pay for software you're paying for more than just the executable. You want some sort of contractual assurance that any problems will be dealt with."

I agree - except when has this ever worked with office productivity applications?  What assurances do you have that Microsoft will ever fix a bug (or release it before the next version you have to pay for)? I guess you could always sue them...

Jeff Pleimling
Friday, May 03, 2002

As usual, it seems that Corel's Office Suite has been forgotten.

It's actually a very good product and is perfectly capabale of dealing with Word and Excel files. 

Paradox is no match for Access, but the rest of the suite is good.

Maybe I spend too much time supporting the underdogs of the software world :)  (I use Borland development tools and Corel productivity tools)

Brad

Brad Clarke
Friday, May 03, 2002

"I realize it's a slightly unfair comparison, but the fact is that when you pay for software you're paying for more than just the executable. You want some sort of contractual assurance that any problems will be dealt with."
Adrian, have you ever actually read the EULA that comes with any commercial software? Here is the idea of it, caveat emptor.

"I think most business folks understand business better than most software folks. " Tk, I wish I had the time to give some examples. I disagree with the word "most" most of all. Few companies have the time and money to investigate all of the options, test and then implement. Buy what everyone else is using, what I saw in the airline magazine or CYA. That is what business folks understand.

Doug Withau
Friday, May 03, 2002

The issue of paying for the software, or not does not necessary mean that the customer perceives it lacks value.

There is no question that some times the lack of price does mean a lack of respect.  I recall many years ago a acquaintance wrote a small program that fills out airline tickets for a travel agency. This tiny little program was not even a database, but *just* a little screen thing to fill out, and the place the airline ticket into a printer.

Back then, the poor travel agencies wrote these things out by hand. Having a “nice” printed airline ticket really looked nice and professional (like you were a *larger* travel agency).

I remember, since the program was SO cheap, he tried to sell it for 20, or $30 dollars. No one would purchase the program. When he boosted the price to over $100, it sold!

Hence, a case can be made for customer perception. However, the success of open source means that anyone with a brain knows the Linux, or something like Apache is a first rate and high quality product.

You don’t hear people saying that Linux is cheap, or not reliable, or not a great server platform. The fact that you can download red-hat for free does not hurt the perceived quality at all. The only real danger here is that now some people will begin to lack respect for the *effort* and talent that it takes to create good quality software.

Many people have no clue, or any sense as to what software is. To them, it is magic, and may not have any value. This I fear this type of thinking could hurt our industry. If people lack respect for the effort and talent to create software, then we indeed are inheriting a very bad lemon from the open source community. I suppose I should not be too worried, since if companies don’t think that good developers are important, they simply will not get good software for the money they spend.

The problem with Star-Office is that now the person has to *change, and that is work, and effort. In fact most people don’t care if you plunk down the newest version of WordPerfect (and pay for good money for it). The user in the office will not even bother to un wrap the new package. They already are happy and using word. Unless that WordPerfect has some new value, or gives me some reason to change, then I will not. There has to be some reason to change, and the change *must* be easy.

Thus, the issues is not so much one of price, but of what is the quality of the resulting product. I do believe that over time users can, and will figure out the difference between good products, and bad ones. The conclusion made by the consumer will be regardless of the price.

Now, the willingness of the consumer to pay for that better product is another issue.  We all know that Oracle is a great product, but do we want to pay for it? We all know that a new car is better, but do we want to pay for the newer car, and drive it? Most people want the newer car, but for a good many, the price is not worth it, and they drive used cars. Star Office has a Word compatible word processor. For many consumers, this is good enough. It might not be ms-word, but many will not care.

This is especially so if the consumer has to *pay* for ms-word. When Ms starts to enforce licensing more, then many consumers will probably consider Star-Office. On the other hand, I cannot believe the amount of software bundles that PC venders ship that that includes ms-word. It is even very common to see ms-works on the OEM software bundle (works is that cheap word, cheap spreadsheet etc). However, as part of those OEM bundles, ms-word is now often included (thus you actually get 2 word processors from ms). If MS continues this practice, then Word continues to be very affordable to the consumer anyway.

The real big issue here is going to be what the schools do.


Albert D. Kallal
Edmonton, Alberta Canada
Kallal@msn.com

Albert D. Kallal
Friday, May 03, 2002

Yes Doug I agree but

>>Buy what everyone else is using, what I saw in the airline magazine or CYA. That is what business folks understand<<

This happens but let me use it as a metaphor:  What "everyone else is using" is a conservative and proven business model based on trying to make a living and a profit.  Business folks rightly have more confidence in suppliers that use this model.

tk
Friday, May 03, 2002

tk,

Your analysis has problems as distribution costs get near 0.  When suppliers could get strangleholds on distribution, it made sense to buy what everyone else was buying.  It ensured your supplier wouldn't be the one forced out of the market.

However with software that even gives you the means of production and distribution, this strategy becomes less safe.  I don't particularly mind though.  $250,000...  I actually once sat and wondered how fogcreek could sell bug tracking at 40 bucks a head.  Now I wonder no more.  The price of Joel's reputation.

Kilroy was here
Friday, May 03, 2002

*  Recent Topics

*  Fog Creek Home