cthulhu@athena.MIT.EDU (04/17/86)
From: cthulhu@athena.MIT.EDU Ah yes, the 'if you can't afford the software, get out of the market' argument. After spending almost $2000 on a computer, it's not so easy to just get out of the market... Anyway, I do believe that Amigaware prices will come down, but it certainly doesn't help to tell the software companies 'sure, go ahead and overcharge, we don't mind!' I have an Amiga, I have to believe prices will come down, because if they don't, I've just wasted a vast quantity of money. As for my 'rationalization,' I don't have anything to rationalize; my software library consists of originals and Pub. Domain... I am simply stating one vital fact: the Amiga can not, and will not succeed if software prices continue to follow the current trend in pricing while ST companies are making bold strides in lowering prices. Software companies may win by ripping the customers off in the short term, but in the end, everybody loses. - Jim
rb@ccird2 (04/25/86)
In article <1914@caip.RUTGERS.EDU> cthulhu@athena.MIT.EDU writes: >From: cthulhu@athena.MIT.EDU > >After spending almost $2000 on a computer, it's not so easy >to just get out of the market... >I have to believe prices will come down,... >I am simply stating one vital fact: the Amiga can not, and >will not succeed if software prices continue to follow the current trend in >pricing while ST companies are making bold strides in lowering prices. Well Jim, I hate to break the news, but... There is a mindset on the part of both customers and publishers that seems to be self defeating. To begin with, until the micro market started really booming, software was a "custom" operation. Frequently, an end user would go to a consultant, OEM, or vertical market integrator, and have them put together a "turnkey system" where all they would have to do is "flip the switch". If something went wrong, the hardware was upgraded, or a new feature was desired, the OEM would make the changes as part of the support package. When IBM-PC's were accepted by the MIS directors of major companies, those people expected the same software service they got with their mini-computers. Many little companies that thrived in the CP/M & Apple II days simply weren't geared for that kind of support. Customers were asking for free or low cost upgrades to both documentation and software, replacement and upgrades for upgraded hardware, and of course, bug fixes. Typical support costs for a company with 20 users of that software could easily run into the thousands. The response was simply to raise the price. Hence the $500-$1000 "integrated systems". Generally, software prices have been geared to a percentage of the hardware purchase price. If this trend continues, the ST will ALWAYS have lower priced software than the Amiga. Amiga, on the other hand will have most of the "Big Name" publishers coding for their machine. Many companies, willing to accept software at "Face Value" and provide internal support, distribution, and "hand holding", felt that it was morally acceptable to buy five or six copies, (to compensate for royalties), and make more copies of their own internally. In fact, many companies attempted to negotiate "royalty schedules" and were flatly refused. Unfortunately, the costs of getting software onto the dealer's shelves started to go up substantially. More advertising was needed to get dealers to accept the software, and more still to get customers to request it from dealers who didn't carry it. Furthermore, publishers didn't trust retailers or customers and so started to put copy-protection on the software. Of course, there were legitimate reasons for legitimate customers to make copies to hard disks, but copy-protection meant more calls to the publisher. There are ways to break the cycle. Borland has shown that it is possible to sell a product with minimal support and still have it accepted. Share-ware products have shown that, for reasonable prices, the product can be distributed at a much lower cost and still be somewhat profitable. Book-ware (software is free, but the documentation "book" can be purchased at the book store), has proven to be very profitable. One of the more interesting developments is the GNU products. Although these are "free to anyone", upgrades come out so frequently that customers order new copies about once a month, often taking turns ordering the almost weekly upgrades. Properly scaled, this would be like purchasing software for about $15 every month or two. The product is the advertising, and the advertising is the product. The usual response to problems is "have you tried the new release?" :-). They are also real good about posting notice of the latest upgrade availability (17.59 this week :-)). Problems are fixed, enhancements are made, and good things happen, but always to a later release than the one you currently have. Even more interesting is that you get source code. The irony of this is that although the product isn't intended to be a big money maker, it has turned out to be a good source of developement capital for other products. Imagine what would happen if this organisation wanted to make money :-). In the past, two approaches to developement were used. In one case, a start-up company would get lots of capital for an undeveloped product, hire a developement staff, create the product, do the marketing, and, if all went well, the revenue would start coming in before the venture capital ran out. In the other case, a handfull of developers would develope a product in their spare time and when it was finished, would get the capital, marketing, and publication facilities for a new company, these are the "kitchen table" companies. Unfortunately, many start-up venture companies did not get their product to market before the venture capital ran out, and many of the kitchen table companies lacked the marketing talent required for substantial success. Other "alternative procurement" patterns for software developement have also begun to crop up. Many are developing publisher/author relationships, where an author gets a working version together, puts it on a BBS, and the publisher agrees to pay the author royalties on the "Next Version", usually marketed under a new name. Several of the ST products fit into this category. There are several programs that were originally posted to the net (in binary), enhanced, and sold over the counter for $15-$20/copy. Considering the number of "underground markets" for quality software, I seriously doubt that the copy-protected, over-priced, over-advertised, over-supported "Big Name" products will continue to dominate the market. They will still have their place, they will still get most of the media attention, they will still be purchased by those who don't know any better, but they will be missing a lot of the "real market".