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On software pricing

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ital2:
(EDIT May 8, 2017: Repair of the mix-up: Put #1 in frame 1 and #2 in frame 2, which should also change the title of this thread.)

Starting point of this thread has been timns'

Personally I have no problem paying a reasonable chunk of change for something that I am going to get a lot of use out of. The example of DOpus is a really good one. God knows how much I have used that software, and how many hours it has saved me both at work and at home. So is 80+ bucks a lot for that?

I think: no. I wouldn't blink at paying that for a decent pair of boots, say. Or a warm jacket. Or even a decent bottle of plonk. Hell, how about filling the car with petrol?

So I still struggle to understand why there's a very strange attitude to paying for software compared to just about anything else.

and several answers over there (all page 1 there): superboyac's software pricing table, nudone's answer and wraith888's own pricing table underneath it: http://www.donationcoder.com/forum/index.php?topic=25742.0 (all on first page there). So:


It is certainly correct that any price has to be viewed with respect to usefulness of the software, which can be divided into several aspects: frequency of use (quite cheap but not free tool used daily: no brainer), intensity of use (quite expensive file manager but which you use almost constantly*), returns of the use (either in terms of direct money* or in terms of productivity, in comparison with similar tools*), likeability (you just like the looks of some software while similar software may be cheaper... but the more expensive one may either even produces better results, since you really like working in it and thus you work better it, or just you have more fun with it which is also kind of a return even if it's not a financial one)...

*: Directory Opus has been mentioned in this respect and stands for other, business software in the following respects:

Perhaps it's quite time-consuming to set it all up in order to really take advantage of its special features, and if people don't have/take that time, the price extend may not be worthwile; this can of course be worsened by regular update prices, or update price extents (compared with similar software) when the user does not take/find the time/quietness to dig into these optimization matters. The above discussion on DO shows this: Perhaps there are possibilities, but they are not made evident or readily available, and so for those users in question, they are NOT available for the time being, even if they are there. From the developer's point of view, it's obvious that they should try to clearly communicate whatever is possible, and how that is possible, and it also should be made possible in easy, clearly defined steps. The DO help file is not bad at all, but they don't integrate realizations for special wishes into it, so that the user has to browse the forum, and more so, has to put together the necessary steps in order to get to it, which many users will not have the time to do, and ironically the users for which the price is no consideration at all. Simply put: If you just use it as the Windows file explorer but with two panes, a lifetime license of a competitor, at a price less than the initial price of the alleged superior contender, will do, and will do indeed for most people.

As implied in the paragraph before, an important factor is the existence or non-existence of competition in the field, and here again - but this does not apply to DO and its competition - the readiness-of-availability of extra features in that competition. I say this does not apply to file managers since the much cheaper file managers do not make readily available their extras either, so the problem of using them just as an explorer replacement with 2 panes is present there, too, and so it often comes to some sort of a feature list race, most of these features never being used. It's ironic and very understandable that those who dig deeper then quickly form sort of a select community for and in which the price is perfectly justified, and tout it, to people who don't have the leisure to get into it and for which the price, in view of the cheaper competition, is not justified. Here again, it's about the making readily available the extras, with and without the help, I mean by the help file and ideally even without needing it.

For direct monetary extent returns of some software over its competition, file managers may not be a really good example, but I'm sure many business software can trigger such direct surplus return over its competition, and then it's up to the developers or resellers to prove this / make this understable and plausible upfront in order to justify the price extent. End of *.

In general and except for software which immediately helps with producing monetary returns, public appreciation of software prices has very changed over the years, by the fact that by Microsoft products available to mass markets at incredibly low prices, the public does not see the individual programming effort, but the price in relation to the package, and this has never been as evident as nowadays since Microsoft Office 2016 is available UNDER 10$/euro (incl. even VAT) everywhere, including some totally incredible package for the price, which by that not only affects competing products (text, spreadsheet, mail and so on) but also software in other fields which often appear "poor", too basic in comparison, and spending some 100$ plus 25$ VAT for some simple software becomes indecent (EDIT: becomes "indecent": I wanted to express that in direct comparison, many users will have the feeling that it's "indecent"; the mention of clothes above is of interest here since at similar prices, you get similar quality, most of the time, while this rule, in software, by Microsoft, has been broken indeed; not by Adobe, though, since they charge indecent prices month after month for quality which is not superior in every aspect...) , running on a pc on which a complete Office 2016 runs for almost nothing. (On the Apple side (Mac, but not AppStore), this has been a little bit different, so developers like to program for Mac, and that often shows by better quality of the software.)

I'd like to give a recent example of a price roller coaster. IdeaRover is some academic text program possibly including citation management, but I don't know to what degree (maintenance, formatting...). It does not seem to be an "outliner" integrating resources and texts-to-write-from-those but manages with two different lists for the former and for the latter. (I had wanted to try it but it doesn't work on XP anymore.)

That program was 89$. Then it was 249$, but not for long. Now it's 99$. Which reminds me of an additional criterion which is the presence not only of cheaper competitors, but of free ones, most universities having one such academic writing software as a campus license.

Which reminds me of file managers where I use FreeCommander almost exclusively, holding some paid licenses for competitors, too, but those tools are totally dormant on my pc, so imagine they changed their price policy to a subscription model, ha!

ANOTHER EDIT: Sometimes, the value of the higher priced software is invalidated by missing or very poorly executed basic functionality. For example, xplorer2 may be superior to FreeCommander, but has not got any "favorites" management worth mentioning; even the Windows Explorer has got some much better one. The one in FreeCommander is not ideal either, but it's functional, as are for example the file rename possibilities, regular and RegEx, too, very intuitive and of big everyday use. So if I had properly appreciated/known these differences, I would never even have bought xplorer2. This is not to criticise xplorer2 which must have many qualities I don't even know, but it's another example of where when buying software at a certain price, you (sometimes wrongly) expect all the basics being there, and well implemented, when in fact it's perfectly possible they are (almost) missing, and then in your daily use, you replace paid software with freeware. Such experiences then also have the effect that when in doubt, you don't buy (but after an extensive trial perhaps, but which may never take place then, so the purchase will not take place either: in this respect, DO's trial of 60 days instead of the usual 30 is a smart move, since it gives you time to discover qualities you may have overlooked by a trial in a hurry), when before, you bought and weren't even in doubt about possible missing qualities.

ital2:
Talking of roller coasters: Bitcoin as a perfect example. In fact, nobody knows what the real value of Bitcoin is, except probably its creators. And I don't have any idea, but would be thankful for suggestions, why some software developers tout Bitcoin, by lowering their price for Bitcoin payment. Or do they, the touting I mean?

Could be that they muse that Bitcoin users are juvenile types (no pun intended) who otherwise would not buy at all? Or even another, quite exotic effect: They know that sympathy sells, too. So they think that 99 p.c. (be it 95, whatever) of possible buyers will NOT have access to Bitcoin (it doesn't make sense to go into it for a payment of some dollars where you'll spare some dime) BUT will say to themselves, Oh, that's a fine fellow, he even gives out discounts, so IF I had Bitcoin, I could spare a dime. That's really friendly, so I'll buy from him anyway, all the more so since what I lose by not getting the discount isn't that much!

We're speaking of a buyer here who without the discount (which (s)he doesn't even get) would not even have considered buying.

I call this the virtual-discount-purchase-trigger. (Which can of course come along in other forms, too, but that's another problem: Student discounts ain't that attractive to non-students for example...) - Remember, you just have to give it out to perhaps 3 p.c. of people who would have bought anyway, but it'll bring you possibly 10, 20 or 30 p.c. more customers, all paying full price, and which would have not bought without it being virtually there.

But even that can be wrongly applied. When DVD Anywhere passed hands, I decided I wanted to buy, at last, but only ways of payment were Visa or Bitcoin. I just have some MasterCards, no Visa, no Bitcoin, so I never bought since digging into Bitcoin (or applying for an additional credit card) wasn't worth it for me, and since, renting films has become free in the public library, so DVD Anywhere won't get my money anytime soon even if they accept MasterCard.

In this special case of media piracy tools, Bitcoin acceptance obviously was given out of necessity, not many banks wanting to be involved in such business, and so even them offered a discount for paying with Bitcoins, probably in order to induce to get non-Visa-card-holders into the Bitcoin system. (EDIT: In order to not lose the sale I mean.)

But, frankly, for all that fuss the discount wasn't sharp enough, so I happily do without DVD Anywhere (or was it AnyDVD rather? Anyway, the Elby successors.).


AND OF COURSE, in http://www.donationcoder.com/forum/index.php?topic=43777.0 (my second post there) I had described another price problem, which is more a problem for would-have-been-buyers than for the seller except when it gets too generally known: Price explosion, but in another variant: Not to an unjustified price, but starting from an exceptionally low price level, or simply from zero, longtime freeware getting normally-priced at some point in time: this latter phenomenon certainly is a problem for the developer, the more well-known the freeware was, the less users now will buy.

Let's hope for freeware developers that at some point, the operating systems will make further use of the freeware impossible, AND that they understand that their now paid version must offer BIG advantages over existing functionality. Gratitude ("Now I finally can pay after all!") doesn't work here.

But as said, nothing's worse than missed lifetime updates periods...


I FORGOT:

Some days ago, some mindmap program was offered half-price on bitsdujour, the one that has been endorsed (probably for free, for being the best, or then for something else?) by Tony Buzan, the inventor of the mindmap term.

Mindmaps come off a time where pc's were rather mainframes, so they were drawn by hand, and indeed, the software that Buzan endorses, comes with very hand-crafted-like shapes, which must have pleased him. It's in its version 20 or so now, and comes with lots of graphical bells and whistles, but functionality-wise, it does not seem to be that extraordinary; reviews are so-so. There's a lot of competition in that field in any case.

Bitsdujour customers are called "folks", and those "folks" were warned, even days before the big sale, that only 100 licenses were available - it now occurred to me I should have posted here at that very moment, to share my laugh, and it came as expected by me: After day 1, the "folks" were informed that the big day had been to extended to 48 hours! And of course, after almost 48 hours in full, Buzan's adopted child was always available for purchase.

At a price of some 117.50$ instead of 235 if I remember well, but where was the clutch? Since for 117.50 plus VAT, it would have been something nice-to-have, it's optical bells and whistles screaming "buy us!".

From the reviews it was evident that additional functionality (for example Gantt charts) were in quite early stages of development and needed quite a lot of polishing, and on the other hand, "folks" who tried to "help" with their business, told "folks" that paid updates were very regular, every year, minus 50 p.c. at the time of the update, less so afterwards, and so anyone who would have bought this as a nice-to-have would have faced life with a program of which major parts were not ready for prime time, AND if they wanted rather minor increments (as said, current version was 19 or something around that, so you could have expected it was sheer brilliance now after 18 tries, so if it was obviously not, further development would to be expected at that rather languid path), they would have to pay 117.50 or more every year from now.

That's a big, continuous deception with a big announcement I'd say, and so it was evident that most of nice-to-have-it-users would refrain from such a purchase, while on the other hand, professional users will probably buy something more professional, less cumbersome, less "handcrafted" (see the reviews).

I'm not speeking of "greediness" or something, 117.50 per year and per seat is nothing to whine about for a productive program in a professional environment, but annual updates, even correctly priced, and which after 19 years don't bring perfect results, in graphics and in functionality, yet, in a market of quite performant contenders, that's simply not good enough as I see it.

And the never-ending follow-up of updates of which perhaps some should have been free minor ones, does not produce a "worthy" product which then, for the casual user, will suffice for some years, it's not "rounded-up" enough but screaming for the next update, and the next, and the next, and they're all paid ones, at the (here) original price:

That offer was psychologically very near a subscription, and for the casual user, subscriptions fall flat. (And not even the scarcity incentive here could overcome that.)

tomos:
Yeah, it's tough getting the balance, I mean setting the best price in order to make money, and still sell.

With software I use often, I've started appreciating the little things more. Two examples would be Softmaker Office (it being for commercial use makes it a lot more affordable than MS Office) and DO. While I'm at times unhappy with non-implemented requests and/or what I consider strange UI decisions, there are features there that make the cost very worthwhile, especially considering I use them everyday I'm at the computer. FWIW I wouldn't consider myself a power user of either programme: I think it was Dopus 9 or maybe 10 I had customised to the eyeballs, but at some stage I went for a vanilla install -- there's functionality that I had before that I never recovered -- meaning I never took the time to find again. I never really recovered from that, yet the programme is still well worth it to me.

ital2:
timns' mention of clothing price (citation on top of this thread) has been a real eye-opener for me - as said above, similar clothing of similar quality: similar prices: you get what you pay for, more or less; there is a common perception of how much a certain clothing in a certain quality will/should cost -, and thinking about it:

In software, too, there is such a price expectation, too, but it's entirely dependent on other software prices, even on prices of software which is in a complete nother range: It's almost as if clothing prices were heavily influenced by car prices or vice versa.

This phenomenon has quite broad consequences: The availability of some "super software" for almost nothing devaluates other software, even other software kinds, and invalidates their price demands, except for cases in which some software is needed to earn money AND where all the softwares in/for that/those special business (needs) are priced more or less evenly.

From a productivity-worth point of view, prices would have been very different. In the beginnings, for example for a translator, there were typewriters / electric typewriters (several hundred $$), then electronic typewriters (over 1,000 to several thousand $$) - no real gain in productivity so far -, then electronic typewriters with disk storage (and some sort of text display, sometimes just several 80 character lines): These were up to 10,000 $$, and more if they were a little bit sophisticated (for example Wang).

They came with big gains in productivity for translators (or for office personnel having to type very long and quite plastic documents, but also, another way, for short business letter writing, thanks to "phrases", standard bits of text ready for multi-usage). For translators, though, the gains in productivity were much less than the additional costs (about 8,000 $$ more than their ancient equipment which by the move of buying modern hardware was rendered worthless), BUT they tried to buy it anyway since their files on disk were much more worth for their customers than were the hundreds of printed-out pages of their competitors.

And speaking of printed-out pages, printing them out correctly was very expensive since you had to use highly-expensive, 1-use-only carbon tapes in order to make them readable for the (15,000 $$ and more) reading machines in the publishing houses and other corporate customers. (Those reading machines, even if they were already present there, did not read printed-out texts without inserting new, additional typos, which made files-on-disk even more valuable.)

In other words, there was a time where the cost of equipment was either directly related to the productivity gains coming from it, or where for most would-be buyers of such equipment, the costs even surpassed possible gains. (For most translators of the time, it should have been less expensive to read the new print-outs from the files produced by the reading machines having read their print-outs, for free, than to buy a Wang - which were new enough for not being available used for lesser cost.)

The the introduction of the pc, and shortly afterwards or at the same time, of the earliest Apple machine, and it was the first time that hardware and software fell apart; the second time, many years later, this occurred with smartphones which today do all sorts of things for which some time ago you would have needed dedicated devices, one by one.

The same phenomenon I describe here for text, occurred for crunching numbers, and even, with some time delay, for vector and other graphics; the latter made that Apple had its chance beside the pc; graphics on pc's came much, much later only. Databases ditto: Rolodex and other cards were the norm for anybody who could not afford sort of mainframes.

In these early years, standard software (text, spreadsheet, database, graphics) was about 1,000 $ each, and it was evident that for anybody making even a little bit of money with any of these software kinds, the price of software, even though it was 1,000 apiece, was extremely acceptable, and affordable, considering their gains, once you had bought the necessary pc or Mac, and, since hardware development was incredibly fast, you were able to buy pc's or Macs used, for much less, very soon, so the necessary upfront cost for then having access to a Wang-in-pc and other production machines (spreadsheets and so on) was not necessarily 5,000 $ or more but just the half of that.

You could call this the democratization of productivity.

(Of course Wang went bust.)

From then on already, software prices went down, too, by means of individual developers also doing some development, and also from the availability of "used" software (when people switched from Word to WordPerfect or the other way round, for example) and from software "sales" coming from software producers which went to the wall or software products which were not longer developed but which were sold a prices making them of interest for people not wanting (and not needing) to pay 1,000 $ for each software; it's of interest in this respect that Microsoft (but not WordPerfect) succeeded in establishing their text format as a standard, so that anybody who had to sell their texts had no other choice than to buy Word, in the worst of cases even had to switch to Word, from WordPerfect (total investment just for text files 2,000 $ instead of just the 1,000 they had thought it was sufficient). Of interest here: The inability of WordStar to establish their format as the standard, even though they were first, and much cheaper even. Perhaps it's because they hadn't formatting but years later, when both Word and WordPerfect had it introduced in awhile.

Whatever, Word and WordPerfect both succeeded in upholding their very comparable prices for some years (in the beginnings, Word's victory was not yet foreseen, so most text buyers had both programs available, leaving the choice of format to their text suppliers, but WordStar, even though cheap in comparison, was never a contender), while, as said, those prices were incredibly cheap, compared with Wang and similar systems just some years ago.

And now you get almost the whole bunch from Microsoft for almost free, and almost the whole market is deeply affected by this, except for very special software where (or more precisley: as far as: see Excel) Microsoft software cannot help you: business software (besides text/mail/Excel), scientific software (beyond and besides Excel number crunching), special software for special professions (the translator example since now that they know it's possible, they (and their paying customers) have discovered urgent needs far beyond text processing), and so on.

It's fascinating that Adobe makes the exception: They, and they only, have succeeded in preserving a quite "general-public" market with high prices for them, and they are even much higher than in the past. This is due to 2 factors: For one, graphics software obviously ask for extreme coding (most graphics software from other publishers is not as sophisticated, obviously because they don't have the necessary development money), and for two, they did it all right, not having an operating system to rely too heavily on and to blur their minds, like Microsoft did; both tried to extinguish the competition, both succeeded in that. It has to be said that Microsoft's user and usage scopes were much larger (text, even spreadsheets) so that to deliver to the general public, they had to deliver products which also were then available, at general-public prices*, to corporate customers, while for many years, Adobe (and their competitors) provided software which wasn't yet asked for by large elements of the general public, too.

*: It's ironic that MS in all those years and even now made and makes available their software to corporations at much LESSER prices than to the general public, it's just that now those corporate licenses, too, by jurisdiction, have become to the general public, too. But the rule of price is, most of Microsoft's corporate software is also very useful for the layman, or more precisely, it's the other round: Most of layman's software would totally suffice for corporate needs, or in just other wording yet: Most of Microsoft's software is just not sophisticated enough in order to be sold at much higher prices yet since then cheap competing software would take over their markets insofar.

This is different for Microsoft Server, Exchange Server, SharePoint: have a look at their prices over there... So the problem obviously is: Whenever there is software which, for the general public and corporate needs, is almost identical, prices cannot be upheld, even while Adobe succeeds in it, partially - it's evident they will have lost lots of their former non-corporate customers by their price strategy, and it will be of the utmost interest to have a look when Microsoft buys some Adobe competitors, then injects the necessary money into them. (Ok, for vector graphics, no serious contender is left, but for the rest of Adobe's choice of products, that would work quite brilliantly.)

Now compare the whole Microsoft package for less than 10$ with a Wang machine for 10- or 20,000 $ (since their "cheap" machines didn't dig that deep into text processing), dollars of then!

And then try to sell some quite simple piece of software for 100 bucks. Even when we all convene that you get some 20,000 $ of development costs for your purchase price of 100$, and some 20,000$ of 1981's worth: If you don't need it desperately, and if it doesn't provide fun* for its money, you compare with the 10$ MS Office on your machine, and we know the result.

*: That's why the Chinese do so much media software, and why the most brilliant developers today often code games instead.

If it doesn't produce direct money, and if it doesn't give pleasure, and isn't even outrageously cheap, shelve it; freeware and almost-freeware from Microsoft provides for all they will need: 20,000 or 200,000 $ of development costs it isn't worth because you don't need it and think you know what nice-to-haves should cost. You think otherwise on the subject of "a decent pair of boots, say. Or a warm jacket.": Even if you don't need them since you've got more than you can wear out between now and the time of your death, they have agreed-upon standard prizes (as had software in 1985), and you either need them indeed, or they are attractive before your eyes, you WANT them, for color, fabric, for feeling good.

While most software nowadays, let alone for the Windows operating system, isn't attractive at all.

You thought TheBrain was functional? Come on! They sell on looks-n-fun. (But since it's not so functional in the end, they don't sell that much of it after all.)

Some days ago, I've been to some store where they also sell Apple. Impossible to have another look (yes, another look, so it wasn't important: Yes, that stuff IS sexy, so I stroll along whenever I'm there for other reasons) onto the iPads - iPads, I say, not IPhones: 4 girls between 11 and 13, and some around-12-year-old boy had the fun of their life (or day), bent over the pads: From just looking and touching, they were in heaven, so I didn't want to disturb them, and probably about 80 p.c. or more of the smartphone and related businesses are driven by that fun factor, not by business needs, and that's not even counting the non-availability of batteries after some years.

It's by need (and that's function of the competition, too!), or by real, sheer fun (include dreams, prestige and so on here) that you sell; anything else is always "too expensive" - that's why people complain about prices which, from a matter-of-fact point of view, may even be a steal.

If you want to get an idea of how to inject fun even into software-you-need, re-read my thread "Navicat Warning", more thoroughly this time; also some Mac software is fun to work with. Even most mindmappers (incl. the Buzan thing) don't understand that either: What fun could be driven from software which is so much less fun, and that more cumbersome, than handicraft?

ital2:
what you say about Softmaker Office reminds me of an aspect I missed, Underdog Assistance. I've written for hours and I'm tired, but this would be worth to be developed, it's not about being cheaper, being simpler or other "justifications", it's about identification with other people who are NOT in power while the like of Microsoft and Adobe clearly are. And it's fascinating because individual developers can try to trigger that Assistance from many a potential buyer, but most of the time commit mistakes which will break the spell.

It would be interesting to hear your "reasons" of the time which made you chose Softmaker Office over MS: Was it early enough for cheap MS Office licenses not being available yet? Since even at similar prices - around 100$ vs around 100$ for a MS "Home & Student" license it's evident for many people that their money go to the Underdog, not to the richest man in the world, even when they get much less functionality for the price - "I don't need the overkill", they silence their doubts in those cases: in fact, for political reasons, they then go against their own best interests (old laptops excluded here). No pun intended, it's just human and rather "friendly buying", you you tell us, your loyalty was unidirectional: They don't return the attachment of their customers, but just take advantage of it. (This aspect is one of the points I referred to by saying they break the spell by making mistakes, just having found your niche isn't enough, for a developer, they need to secure it, too.)

And what you have experienced with DO (which stands in for other programs here of course) is another aspect of what I said about not having the time/leisure to dig deep enough (again, in your case); when I had had that other, Win10 pc, for some days, every usage of (my) standard software was horrible, having made the installation, but not having all the thousands (!) of little tweaks - before, I had even taken note of many of them, in order to replicate them, but it just wasn't the real thing, and would have taken months, and hundreds of hours, to get even near there.

(Besides, I probably over-simplified my description in the other thread; some months ago, I had unsuccessfully tried to buy a new HP workstation with Win10 and a good XEON processor in the range of the i7, but they were already sold out at the very good price (1100€ but without graphics card yet), so now I had bought a used HP workstation, with a processor which is said to be similar to an i5 (and with that 4 GB graphics card, 400€, also with 16 GB server RAM), and that really was a big disappointment, independently of its instability / alleged motherboard fault.)

So going back to my old XP pc has been literally a relief for me, and I would pay a good price for a really good tool which was able to transfer my programs, with settings, to a modern pc, but from what I read about such programs, even from 7 to 7, 7 to 8, or 10 to 10, they are not strong, so taking it all from XP to 10 and hoping to get much help from such a program, would be delusional.

But what you report, discloses another very important factor in selling, and in pricing, too: It's quite easy for a developer to guarantee the transfer of all (!) the settings from one pc to another, but almost none even ever touches the subject, and it's with software that can be deeply personalized, and which will gain almost all its power from such extensive personalization that such transfer help is of paramount importance, and from one software version to the next, this should not even be a subject of worth mentioning. But you updated to 11, then, in spite of those goodies not available to you anymore? That's what I'd call an very loyal customer!

But then, if you really did, I admit that filing with DO's more fun than with, say, xplorer2, that's for sure, graphically and functionally, but then, the latter's developer is not that open to his customers' suggestions, either, he's a very (brilliant) technical guy (see his new search tool, specialized in meta data: wow!)


But now I finally must check the French election results now, I don't have the slightest idea yet (about the percentages, that is, I'd guess around 63:37 or even more apart (advantage: High Finance), so I'm not intrigued by the possible outcome, would have checked if I had had any doubt); software design being just too fascinating a subject for me, you even could speak of addiction.

EDIT:

Ok, ok, it's 65:35, and nobody here will believe me I didn't know 1 minute ago. That's life. ;-)

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