On Nov 22, 7:43 pm, "Peter Becker" <[email protected]> wrote: > In other areas software becomes a commodity and as long as it works > well enough the cheapest option is the best. Linux is getting there in > some areas (think netbooks), OOo is catching up. They both still > suffer from not being mainstream enough, but I give that another 2 or > 3 years and MS will find it harder and harder to raise their taxes on > new hardware.
You often hear that just because there's a free, good-enough open source version (Linux, Open Office, MySQL), their respective markets become commodity markets - not true, I believe. Check out this presentation: http://stephesblog.blogs.com/presentations/BrentWilliamsEclipseConV02.pdf (interesting from slide 30 on). A commodity is a product "where the buyer is unable to distinguish between products from different producers", there's no switching costs, and the lowest-cost producer wins. All of this is not true for most software - at least the markets Sun is in (operating system, database, middleware, tools). And ndustry profits are on average around 8%, so if software was a commodity, software profit ranges should be around that value too - but Microsoft has north of 90% for Windows and Office, and IBM has close to 88% in their last quarter, so they can't operate in commodity markets. > A major reason why shrink-wrap doesn't make sense for no software > customer is that it gives all the wrong incentives for the producer. > As someone selling shrink-wrapped software you make money by selling > new versions. Why would people buy new versions? Usually for new > features. So your first priority has to be creating new features. That > means bugfixing and other QA gets unimportant as long as there's not > too much complaining. It means that a general consistency of your UI > or other design questions are mostly irrelevant. It means that you get > MS Word, which IMO is a good example of how software should not be. > > Most customers are not yet aware that this business model is hurting > them, that's why MS has so much resistance against their ideas of > going for subscription models. It's probably noone trusting them > either, but that is another effect of the shrink-wrap model IMO. > Subscription makes sense for software. OSS+Support contract makes > sense for software. And in many ways those two are just two variants > on the same theme, especially when you consider the marketing idea of > having different prices for different people to get the most money out > of each of them: if you charge everyone the same you'll have people > who would have been happy to have spend more and others who leave your > product since they deem it too expensive. So you really want to > seperate the market into different price segments and having different > subscription/support plans makes that easy. It's just that OSS starts > with free community service and usually has a different attitude > around the project. But the boundaries are blury, companies like > Trolltech and IntelliJ have managed to produce non-OSS products in a > style very similar to the OSS ones. I can't follow your logic - don't you have to add features, too, for subscriptions so that people continue to pay their subscription license? Just look at the trouble Microsoft got in with their Software Assurance subscriptions - customers were outraged because they didn't get any new releases in the first three years (for many custoers it ended just before Office 2007 and Vista came out). In theory, it's easier to switch vendors with subscriptions, so the software has to get even more features to keep your customers paying. And if a vendor doesn't fix bugs, customers won't continue their subscription, but they won't buy upgrades, either. The problem with subscriptions is that you typically don't own the product, you're just allowed to use a product. I know, in the license / EULA it says that you don't own Microsoft Office either, but at least you have the DVD or the installer, so no matter what happens to the vendor or their payment, you can still continue to use the product (although you may not get updates anymore). And you typically have all the data, too - very important. Now with the subscription - what happens if the vendor goes belly-up? Then you paid for months / years but have no software anymore. Or if you want to switch vendors - can you take your data with you? And enterprises typically have annual budgets, so even with monthly subscriptions, you still budget and pay for the entire year anyway - and then it's not really different financially from buying software and software maintenance. Karsten --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "The Java Posse" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/javaposse?hl=en -~----------~----~----~----~------~----~------~--~---
