Well funny you should make a reference to "Hello World" example, there is a
site out there don't know it off the top of my head, but there are thousands
of ways to write this little bit of code:-)
Yes Volume dictates the price of any application, and in MS for example they
receive a lot of the cost back in support. But they know that they can
charge whatever it costs in the US, because if they charge 5 times the price
people would not buy it, so do get the volume as you say it needs to be
competative and appealing to purchase.
Ok lets take the cost of something a little further, say I rewrote one of my
applications to be sold on the net. I would need to make sure I make
something out of it, for sure. However it will not sell if I was to charge
more for it than someone else could write it for, I mean what would be the
point. I am in the business of saving my clients money, and I always look on
the net for something that does what I am looking for or close enough that
can be modified and I am sure all you people do the same.
However if I look at the time it would cost me to develop (already done in
the design, planning stages) then why would I spend $00's of dollars more to
buy something that might end up costing me thousands in support, downtime
and code rewritting to develop it the way it should be. And this is the key
issue for my clients, and I will always adopt this method regardless:-)
And I agree with your calculations etc., but look at it from the above
statement. To create volume you need to capture the market, and you WILL not
capture the market if someone else can always do it cheaper.
regards
Andrew Scott
ANZ eCommerce Centre
* Ph 9273 0693
* [EMAIL PROTECTED]
-----Original Message-----
From: Gregory Gooden (Annex) [mailto:[EMAIL PROTECTED]]
Sent: 12 September 2000 13:27
To: '[EMAIL PROTECTED]'
Subject: RE: Hotel Booking Engine up
> -----Original Message-----
> From: Scott, Andrew [mailto:[EMAIL PROTECTED]]
> Sent: Monday, September 11, 2000 7:09 PM
> To: '[EMAIL PROTECTED]'
> Subject: RE: Hotel Booking Engine up
You brought up too many juicy points, so I couldn't resist to add another to
this thread <grin>.
> That is a fair comment to make, and I can say that the
> experince is the same
> here. I do contract work for companies who require my
> services, and the code
> I use always is written from scratch, for legal reasons. But
> because I have
> done it once before or even twice before I find that I can complete it
> faster the next time I need to do it, not to mention its
> always better the
> next time around as well.
Indeed!
> However without getting into any legal issues, I can look at
> something and
> see how its written without looking at the code. This makes
> me unique in a
> way I guess, because I find that it saves me a lot of trouble
> buying things
> when I can write the code from what I see on the screen in terms of
> functionality.
So you agree that when it comes to development, there's the writing of code,
and then there's the METHOD and USER INTERFACE that suddenly comes into the
picture.. (This can distinguish one developer from another actually).
We could both write a "Hello World" application, and I'm willing to bet that
they'd look VERY different in terms of method and look (because we're two
different people with different "angles" on it).
> So that it why I made the origianl comment, I have been
> programming now for
> 20 years, and in this time I have seen MANY shareware or
> modules like this
> one where I belive the price to be too high, only because I
> know the that
> the cost it would take me to do it would be far less, it
> would also work the
> way I want it to work and I would also have the source code
> to play with as
> well and could make the changes etc without the support of a
> 3rd person.
But what you're really saying (imho) is that you look at price (we're not
talking about value at this point) as a direct function of raw cost... I
have more points to make about that below..
> We now live a world that is connected by wires, geographic
> location and
> expereince don't really come into the picture. If I had the
> time, I could
> clean up my code to be released just as this person did and
> have it sell for
> $1000 (Aus) which is about $500 (us) we will always be
> competing on a world
> scale, so just because it took someone 1 hour or 20 hours is
> not an issue,
> demand is not an issue but being competative is.
Correct! You see lots of "overseas" development houses out there.. Some are
good, some are not (just like dev houses or developers IN the US)...
Supply and Demand certainly change as you widen the scale to a global
economy.
> All I am saying is that when marketing something, look at
> Microsoft for
> instance. If MS was to sell the Windows products nobody could
> afford them,
> because the R&D into developing these would be too high and
> nobody would buy
> the product. Good marketing is knowing how to sell your
> product, and not get
> a quick buck out of it.
Here's where the meat of MY comments are.
If Microsoft was going to make you a custom application, they'd charge a
MUCH higher price than we are talking about here.. but what MS counts on is
VOLUME. Volume creates a "long term" financial scenario that permits them to
sell you windows98 for a lowly 89 bux.
So back to this app that started the thread... The trick isn't "how much
could I make it for", the REAL trick is, "How do I maximize my income from
this work?".
That's where you make the jump from a developer to a businessperson.
Let's say I make a WIDGET, and it cost me 100,000 dollars to spec, develop,
market and support for the first year.
If the widget is CUSTOM (1 customer), clearly I'm going to charge OVER that
amount so that I can make profit. Let's say in that scenario I charge
200,000.00 so I can make a profit of 100,000.00.
But if I can sell that widget to multiple customers, why not sell it at
49.95? (this is presuming that I believe I can sell at least 5000 copies of
the software)... If you saw that the math is different (4004 copies required
to equal the first deal), you'll note that selling multiple copies involves
more costs, so that's where this hypothetical curve exists.
> I mean would you buy an application written in Coldfusion
> that cost more
> than CF itself, I know I wouldn't and would prefer to program
> it myself. I
> just wanted to point out that it may have taken 20-100 hours
> to develop but
> there are applications out there that took maybe 50 times
> longer with 1000
> times more functionality for less than the price of this
> application. People
> tend to foget this when setting a price for their products:-)
Amazingly enough, we sell a packaged application that is cheaper than
ColdFusion (operating under the "volume model" mentioned above), and found
that if we were TOO cheap, we sold less. Companies didn't like that the
application was less than the required OS software. Wierd eh?
> Anyway thats all I need to say on this subject.
Sorry I continued it.. It struck home on stuff that I've been operating out
of for years now. :)
Gregory
Your Mileage May Vary...
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