A fair price for software

How would you set the price for a software application?  When a customer purchases software, they are purchasing “Intellectual Property”.  These days, Internet downloads of applications are a common distribution channel.  So the consumer receives no physical object.  At work, I have purchased a single licence for software in excess of $1000 US dollars (at a time when the exchange rate meant that it was worth something!).  In exchange for the company’s money, I got an e-mail with a product key.  Everything else, I had already downloaded from the Internet!

Software and intellectual property are things that are very difficult to put a price on.  Those people outside the computer industry can’t relate to how much hard work went into the production of something they can’t touch.  It’s probably fair to say that even in a manufactured product, most people do not have a good level of comprehension of how much effort went into the building of the product. (Including the development of the product).  But with a physical object at least they can see the craftsmanship and feel as though the money they paid is worth something.  There is also the matter of “comparative works”.  If you were to purchase a television, you have some idea about how much it should cost.  Once you have decided on a feature set, screen size, technology etc, you will know approximately how much you could expect to pay.  In software markets where there is direct competition from various manufacturers, it appears as though the pricing is fairly well formalised as well.  – For instance, in the market for video editing software, most shrink wrapped products are around the same price
 
It would be a fair assumption that the cost of producing a television in a given quantity would be fairly similar, no matter who manufactures the product.  Therefore, the price at which they sell can be neatly aligned. By and large however, there can be a great disparity with respect to the cost of producing software.  The price at which it sells however, is determined by the level of competition, not the cost of design and production.  As a result, price does not guarantee quality, nor features, nor usefulness.  Whilst in most markets this is strictly true, shoddy products simply cannot continue to be sold at high prices: the market works it out and the product stops selling

The intangible nature of pricing software, plus the ease with which files are copied leads to an inevitable problem: Software Piracy.  Given the choice of “free” versus any dollar figure, most people will choose free.  You can build a commercial model that competes against “free” and does so successfully – that’s not an argument I’m trying to make.   The point is most people “in the know” will look for freeware and/or open source projects* that suit their needs.

I would argue that once you get away from the computing industry, the average person in the street would not have a clue about “Open source software” even if they consider themselves “computer savvy” / “computer literate”.  They would however, know about pirated software… 

Pirating software is not something that I can condone. Put simply, I have not heard an excuse that makes it in any way acceptable to me.  I feel this way, undoubtedly because it hurts the industry that provides me with a pay-cheque.  It’s akin to “stabbing my fellow developer in the back”.  Ignoring that software piracy exists is being naïve.  Outside of the actual software industry, there often seems a mentality that it is an acceptable thing to do.  Possibly this is due to the excessively low conviction rate for software piracy or a “safety in numbers”/“everyone else is doing it” mentality. The excuses start with things like “I’m only an individual and not using it for a business” / “I’m only going to use the software once”. The variations of this excuse are many, but most revolve around the fact that it is acceptable for them to pirate software as long as someone else pays for it.

So there is no good answer to “what’s a fair price for software?”.  The only answer I can offer, is “the price the vendor charges for it”.  There are almost always freeware/open-source alternatives to commercial software.  If you aren’t willing to pay dollars for a feature set, look for the alternative open-source solution.  It may be clunky (it may well not be too!) or unfamiliar, but that’s the price you pay, for not paying a price!

* – Yes, I am aware that “Open source” is not the same as “freeware” and depending on the open source licence used, the software can cost money.  Typically (especially for “home use”) it tends not to be…

One thought on “A fair price for software”

  1. Good article (though your page renders a bit off and I missed some parts).

    I’d have to agree that fair is indeed to most a subjective quality relative to one’s own perception at a point in time.
    Something a sales(wo)men or two might know all too well ;).

    True fairness on the other hand is something often equated to freedom and is a thing that people have and might still fight and die for.

    Some, including myself, would hope we could come to agreement on fairness and thus freedom, or freedom and thus fairness, without the violence.

    This is however not easy with software since the FSF, Stallman really, has incited a violence campaign towards those who get paid or look to get paid for their development efforts while Stallman and the FSF, get paid. He may have insinuated the violence was intended towards the “big companies” but his actions and those of the advocates and now many users have proven otherwise. There is a rampant violent tendency towards anyone who gets paid, except Stallman and those of the “charitable” FSF, for writing software.

    In spite of this fact there is still some light at the end of the tunnel. Underlying the violent tendency and the FSF’s excesive and violent demands on software developers to work for free while the FSF gets paid, the GPL is but a license and the Copyrights of of the code and it’s surroundg work, in spite of the FSF’s efforts to appropriate them, often remain those of the original authors/contributors of the work.

    Where this is true, where the authors have maintained their rights to their work they can in fact be paid.
    This means that GPL software, in some cases, instead of being seen as “free” and in spite of the FSF, can be seen as LOW COST or even FAIRLY PRICED software.

    Again, it’s not easy given what the FSF has done and still does and of course what the big software companies do.

    You need resilience. You need strength and above all you need unity.

    Not unity under a deceptive and mislieading entity like the FSF yet unity under a banner that represents integrity
    and your own commitement to well being and pariticipation in society.

    If anyone ever said it would be easy, it wasn’t me. was it? :_)

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