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‘It’s Not You. Software Has Gotten Far More Expensive’ (capiche.com) 84
Of the hundred business apps we surveyed, sixty-seven raised their prices an average of 98% in the decade between 2009 and 2019. Fourteen lowered their prices an average of 28%, and nineteen apps kept their prices the same… Notably, if the apps you used raised their prices, odds are their prices nearly doubled over the past decade. That’s perhaps even more noticeable than if all of your apps went up a few percent…
in an industry where we were long accustomed to getting more for less — an industry where that still holds for most physical products — software has gone up in price three times faster than inflation. That’s hard to ignore.
All of their data is available in a public spreadsheet on Google Sheets, and they ultimately argue that today free “most often a strategy, a means not an end. Apple gives away software to sell devices; Google gives away storage to get you to store more so you’ll upgrade.”
Loss leaders have been around forever. (Score:4, Informative)
by Mal-2 ( 675116 ) on Sunday September 08, 2019 @03:50PM (#59171910) Homepage JournalFree apps and services are the $2 milk that’s way at the back of the grocery store and generally sells out by noon — a loss leader to get you in the door so you have to walk by the candy and potato chips on the way out.
- …but can you EAT your 2 Dollar app and have it too? =)
The “Free” apps are often “free” for base options. That’s how they get you. If you look at the revenue generated by the top apps in the app store right now almost all of them are F2P.
I usually can’t tell, normally I don’t get further than “they want WHAT permissions?”
Same. Any app, whether desktop or mobile, that artificially wants permissions beyond the scope of what the software is expected to do is out. The biggest offenders being automatic updates/update checks, spyware/telemetry, location, camera, microphone, contacts, advertisements, in app purchases/crippled functionality/nags and elevated (admin) permissions.
This is why I get most of my software from open source repositories and all of my games from GOG.com. Most other software developers these days are nosy, en
And then it turns out, if I just refuse whatever isn’t what I want, I eventually find an app repository where everything is free, and if I don’t like the permissions I can download the code and change them before installing.
People say all this stuff about having cake and also eating cake, I say, learn how to bake.
Enterprise Versions have also been around forever (Score:4, Interesting)
Some of the examples they gave were also of applications raising their prices because they increased the services rendered. They gave one example of software going from $9.99 per month to $11.99 per month, but with four times more storage offered. Saying that is a 20% price increase is disingenuous. You could just as easily say it was a 70% price drop per GB of storage offered.
Our company’s Salesforce bill has more than doubled in the past five years, but we went from just using their CRM to also building client portals, utilizing their Marketing Cloud, and adding Mulesoft as part of our integration stack. So does that count as a 100% price increase, even if our per license cost for CRM licenses dropped?
It could be less if it wasn’t subscription based. Hard to tell. I know a lot of people are doing things “in the cloud” because that’s the latest thing to do. But it’s like leasing a car every 2 years vs paying once and running it for ten or twenty for maintenance fees only (I just got a new car after 20 years because it finally started to cost more than minimal maintenance costs… I think I saved at least a few times the cost of my new car doing it this way).
Depending on circumstance, it may be cheaper, b
These costs are not significant (Score:4, Insightful)
by jonsmirl ( 114798 ) on Sunday September 08, 2019 @03:53PM (#59171912) HomepageThese costs are not significant. Does it really matter if your $5/mth fee went to $15/mth when the human using the app is earning $3,000/mth or more? Only a single app surveyed was over $1,000/mth.
I thought they were going to say expensive things like the price of an Oracle DB licenses went way up, which it did.
Re:These costs are not significant (Score:5, Interesting)
by ShanghaiBill ( 739463 ) on Sunday September 08, 2019 @04:04PM (#59171932)Does it really matter if your $5/mth fee went to $15/mth when the human using the app is earning $3,000/mth or more?
Indeed. My wife runs an app business, and I had a hard time convincing her that if she doubled her prices she would lose 20-30% of her customers, but make far more profit on those that remained.
So she ran an A-B test with the higher price, and sure enough, her revenue went up by 50% while support costs declined. Now she is thinking of cranking the price up even higher.
It’s a delicate balance between market share (part of a long term plan) and profit.
It’s a delicate balance between market share (part of a long term plan) and profit.
Traditionally, this is true. But not so much in the app business.
Her revenue is 95% iOS, and 5% Android. In the Apple App Store, Apple takes a 30% cut of revenue, and they list apps to maximize their own profit. So if an app sells for $14.99, and a competitor sells for $4.99, it will still be listed higher even if it is half as likely to sell, because the expected profit for Apple ($4.50 vs $1.50) is more than twice as much.
So if you price to maximize your own profit, you will ALSO maximize Apple’s profi
Re: These costs are not significant (Score:3, Interesting)
Fascinating. So quality is an illusion within the Apple sphere. The higher the price, the more visible the app. And why not from Apple’s perspective? After all, once they expend potential market share from one developer, they cast it aside like a used husk and move the limelight over to someone else to promote.
I’m not saying your wife’s product isn’t any good, but damn, as an Apple dev you better have a good launch from day one!
The higher the price, the more visible the app.
No. This is wrong.
The higher the PROFIT, the more visible the app.
Profit = (price) * (probability of sale)
If you double the price, and sell 30% fewer, Apple’s profit is (2*0.7) = 140% of what it was before, so higher visibility.
If you double the price, and sell 60% fewer, Apple’s profit is (2*0.4) = 80% of what it was before, so lower visibility.
- I find it more useful to treat software sales as “mandatory donations”. It’s all fueled by goodwill of people since most of apps do not produce a quantifiable economic benefit for user. And most apps are what people can live without, or can pirate. And it’s all basically a deceptive game to convince people to donate more than they would otherwise.
My Stepfather owns a landscaping business, he sometimes complains about certain customers. I told him the same thing. Jack the prices up on your most pain in the ass customers, if they leave you win, if they stay you win.
- Except that humans in developing countries do NOT earn 3,000 Dollars a month or more – actually a fraction of that – and yes, a productivity app suddenly going from 5 Dollars to 15 Dollars a month matters greatly to them. Your typical business in the developing world CANNOT afford to keep up with price increases like that, because the IT budget has to be kept small so that the business can profit at all. And what happens when 5 – > 15 a month turns into 15 – > 30 a month for an app you have become dep
- You can actually charge different prices for users from different countries.
Re:These costs are not significant (Score:5, Insightful)
by barc0001 ( 173002 ) on Sunday September 08, 2019 @04:15PM (#59171954)The thing that matters to me is that we’re on this damn subscription treadmill at all. Buying software used to be a one-and-done purchase and then the license was yours. Now it’s an annual fee for far too many things. For example, yes Office 365 is ONLY $79 a year, but it’s every year. I *bought* a copy of Office 2007 for $200 back in 2006 and I still use it to this day because it does the job and it’s paid for.
If I didn’t have that physical copy (ANOTHER thing that’s becoming more scarce) then I’d either be shelling out annually or would have switched to Libre Office – which is OK as well, but there are still some annoying workflow differences. Plus, the SaaS model for software on your own machine constantly gets updates and things change without you expecting it, or some features just vanish. To be fair, some are added as well, but when something disappears on you when you least expect it and you need it, it’s a pain in the ass big time.
- Just refuse to participate. Invest your time in finding good quality free alternatives, and when you can’t then I guess you’ve no choice. I find Foss alternatives are often better than their paid alternatives.
- There is always options. We couldn’t find the CRM software with features we needed without monthly fees so we wrote our own. Cost more in the short term, far less in the long term.
I don’t care if there’s a free alternative as much as I care there’s a purchase alternative.
The purchase model is in decline because people want to pay once and then they expect to receive patches forever and get support for new OS releases. This forces the developer to have to support all of these older versions and that is just not a sustainable model for the software developer. Many apps now have a cloud component which incurs ongoing expenses. It be better in the long run to match revenues and expenses. The month fees keep everyone on the same, up to date version.
You sound like a developer who lacks a mirror.
The purchase model is in decline because people want to pay once and then they expect to receive patches forever
No. I hear this a lot, and it’s wrong because the people who are saying it lose sight of what’s really expected:
A product that works as advertised.In the pre-broadband days, this was generally done with good QA testing. Developers would have their product tested as best as they could, because patching commonly involved mailing floppies *and* support calls getting far higher as a result of those mailed floppies, so it made sense to do good QA.
Now, patching is eff
I find Foss alternatives are often better than their paid alternatives.
Sigh, no, generally it’s not. What you are doing is settling for an inferior product. If you think open source Office is “just as good or better” than MS Office you don’t really use Office to it’s full extent and therefore wouldn’t know the difference. So I suppose for you it’s “better” because it’s free. There is a reason people pay for software, and that’s because the companies that create them have more time and MONEY to invest i
There is a reason people pay for software
Because they are rich. Because they can. I am grateful to such people because yes they pay for the cost of future development. If the whole world just relied on the crack and pirate model there would be no new software development except for open source projects.
Of course always online client-server software subscription models are a way to try to avoid free riders entirely by not ever releasing the complete application itself. This means that the software is 100% useless without an internet connection and
- Software takes a long time to write and produce, and incurs support costs after release in an always online world.
Going to a SaaS release cycle provides a highly desireable predictable and stable income to budget for and budget against. $79 per year is probably more than what the software is worth given what people were paying previously, being it works out to everybody ugrading to the latest version at every release rather than a percentage running a specific release for a decade or more or $30 per year
SaaS software sucks. Constant buggy releases, ever changing UI, terrible documentation, expensive as fuck, poor support SEO, et al.
When you can’t charge more for support, you actually have to do a good job up front. SaaS is designed to produce crap so you string along users for support. No thanks.
> Software takes a long time to write and produce, and incurs support costs after release in an always online world.
I’ve been working in software development since the early 90s, started in packaged software and currently work for the SaaS side of things. The SaaS product I work on is one of those that would be practically impossible to “package” to end users, as it’s pretty much literally a real-time service. That’s where SaaS makes sense, not on 99% of the software packages and apps out there.
> Go
> The company are the end users.
No, the company is the company selling the subscriptions.
> When you’re making software purchases a monthly cost per user is much easier to budget for at (using Photoshop as an example) $10 per month than it is $700 every 2 years
But that’s a false dichotomy. Most people and companies weren’t re-buying Photoshop every two years, especially if they only used many of the basic features. Plus, it’s actually $20 a month now – paid in advance. There’s the other problem with
You’re correct. What we’re buying are:
1) the security updates to products, plus any functionality also thrown in, and
2) compatibility with anyone else we may need to share information with.
Security especially can easily be worth the cost.
Software I used to use at work ran something like $1200 originally, and upgrades (every couple years) were around $800. Then they switched to a subscription model–$2k a year. Once the new features of the subscription version were no longer as useful I just went back to my old version.
- by dissy ( 172727 )
If I didn’t have that physical copy (ANOTHER thing that’s becoming more scarce) then I’d either be shelling out annually or would have switched to Libre Office
Just a heads up, the office 2007 activation servers are scheduled to be taken offline this December (2019)
There are tools out there to let you backup your current activation files, if you don’t have an HD image or similar for where you have it installed.
But for new OS installs the physical copy alone won’t be enough, without one of those “other” programs typically reserved for software one hasn’t purchased and has a receipt for.If you have any files in an in between limbo state of compatibility needing both
Ah, good to know. Fantastic.. Thanks.
- Since they are talking business apps sure I fully agree with you. Though your comment on the individual human using the app that is makeing 3,000 a month or more, I’d point out in that category it could mean a lot different. A human making 3,000 a month is likely paying 1500 in rent/mortgage, 500+ in car payments etc… Bottom line is, after factoring in the must do to keep that 3,000+ a month coming in expenses (IE not having transportation, passing out from hunger, not being showered or well rested etc…
My household brings in over 10k a month and we still have to be careful where it goes.
Education is expensive, for a lonnnnnggg time.
Or Java licenses.
We use some software that is ~$500/month/seat and when compared to someone’s $6,000 gross margin, it is a huge deal. For reference, it used to be $85/month. If that software practically did the work we were paid to do it is one thing, but it is just drafting. Add in the other software they need for their job, and it is over 15% of gross margin.
Yes, because when your electric bill goes up that much, as does your phone bill, your TV bill, your water bill, your [insert things you use here] bill, you end up with significantly less money each month.
Same applies to software. We don’t use just one piece of software. We use many various apps. It’s no the individual cost that matters. It’s the cumulative one.
Self inflicted. (Score:4, Insightful)
by Dunbal ( 464142 ) * on Sunday September 08, 2019 @04:00PM (#59171922)They sold you on the idea of “software as a service”. You fell for it. Well, pay your rent, morons. They will keep putting it up until people stop paying it.- What I am concerned about is SAAS being extended to the actual OS on your computer – pay your rent, or your PC/Mac can’t run at all. This will be followed by HAAS, where you don’t OWN your computer or electronics anymore – you pay rent to USE your electronics. You may think “yeah right, as if that will ever happen”. People who are DUMB enough to go along with SAAS are also DUMB enough to go along with HAAS. Watch what happens around 2022 or so. You’ll start to see the first offers for RENTING various comput
You can also go the other way. I’m posting this from Linux.
I’d still be happy with Win7, but as the end of support draws near, it is time to reconsider one’s choices. Not sure if I’ll ever run Windows 10. I’ve just moved my office stuff and mail over to Linux. Most of my games will follow without effort, thanks to Steam. Yes, I see the irony:
Good multi-OS support for my games makes switching the OS easier, at the expense of having the games themselves on one of those Trojan Horses. Sort of driving out the D- You can’t predict HaaS because it has been a thing for a long time
Actually, HaaS was already here. Remember IBM in the 1960s and 70s? You think you owned those computers?
It’s not really about owning. It’s about control. I control all of my software because it is all either freeware or cracked DRM versions. I have zero moneys to spend on software. This has only very rarely presented me with a practical problem where I feel like I have the option to either crack some DRM myself or actually buy a license. This is usually because the software is sufficiently obscure that it is under the radar of the cracking guys. Obviously corporations cannot use cracked software. So they eith
They were forced to do it. Adobe just stopped making buyable versions of Photoshop and After Effects and all the rest, so you want want any version made in the last 5+ years you have to rent.
A lot of software just moved online. Can’t use last year’s accounting software because it’s all out of date now, and web is the only choice they offer any more.
A lot of development tools are going that way as well. Want to use parts made in the last decade? You have to rent the IDE.
They aren’t stupid, they know they hav
How did they get the older offline versions to stop working?
For those who still have them, nothing. For those who want them, they’re not available any more, outside of pirate channels.
People can’t buy Photoshop any more. It’s not an option.
How did they get the older offline versions to stop working?
By not issuing security updates. Eventually risk mitigation overcomes the upgrade / subscription cost.
The Suits Who Run The Show Are Different Now (Score:5, Interesting)
by dryriver ( 1010635 ) on Sunday September 08, 2019 @04:04PM (#59171930)I loved everything computing related in the 80s, 90s, and early 2000s. There was a constant sense of progress, of innovation, of clever things getting cleverer every year. There was a sense that the people building cool computing tech CARED about delivering something OBJECTIVELY GOOD. The last DECADE has destroyed that “I love computing” feeling in me – in my field, 3D graphics, innovation has virtually stopped. The suits who run the show are basically doing what Commodore did with the Amiga – not investing a penny in R&D or innovation, throwing the rest into obnoxious marketing, and trying to sell you the same ageing shit over and over every year, with FORCED SAAS subscriptions thrown in to make things extra shitty. Innovation in the 3D field is currently running at about 10% of its speed in the early 2000s. Things are almost at standstill. The engineers, mathematicians, PhDs and coders are NOT running this show anymore. Its MBAs and marketing heads looking at profit/loss spreadsheets that are calling the shots. It is 100% a repeat of the Commodore Amiga story – Commodore had something amazing with the Amiga, then was suddenly run by shitheaded managers who stopped all technical innovation and basically tried to sell people the now ageing Amiga over and over each year. Commodore went bust in the end and took an entire OS and computing platform with it. Last month, the open-source Blender software released V 2.80 with a brand new, actually quite usable UI design, and now almost the ENTIRE 3D community is mulling switching over to Open Source from their commercial 3D apps. Autodesk, Adobe, Maxon and others are charging 2K – 4K per license of their zero-innovation 3D software, and not delivering anything exciting anymore. None of these companies – run by suits – actually care what they are delivering for thousands of Dollars per license. So TFA doesn’t surprise me. Step 1) make people dependent on your product. Step 2) stop innovating. Step 3) raise the price in small increments each year. Profit.Apartment complexes have been doing this for decades. Two bedroom apartment – $980/month. 4 years later $1180 a month. Can’t afford it anymore? Then move out.
Two bedroom apartment – $980/month. 4 years later $1180 a month.
In my local market, it is even worth than that. My apartment that was $720/month in 2013 became $1110/month in 2017. It wasn’t even that good and it went up $100/month every year.
Can’t afford it anymore? Then move out.
Done that. I ended up buying a house in a better neighborhood not farther from my work. The house is bigger and after factoring interest, taxes, utilities, loss of opportunity on the down payment and mortgage, insurances, and maintenance of the property, it is about the same price as the apartment I used to live in today. (Because
While I don’t disagree with your general assessment, what killed the Amiga was that most of its software was aimed at the entry level model and that the very specific hardware meant that transition to newer models meant buying pretty much all your software again anyway, so why not move towards other architectures that are more resilient?
- by Dogers ( 446369 )Eh? How so? They were all compatible with each other save for 1200/4000 with AGA..
- Innovation in tech is no longer the goal, but rather, innovation in business or marketing strategy. Odd, how once MBAs flooded the leadership, engineering was sidelined. If the only tool you’ve got is a hammer…
I generally agree with the assessment. Prior to the late 90s computing was an ‘acceptable’ market but largely dominated by those who *wanted* to do it, not so interesting to those looking to just make money without an inherent interest in the technology. The late 90s bubble and subsequent collapse both piqued the interest of gold-seekers less inherently interested and paved the way for that mindset to take hold of the market in the following years.
Another problem in various markets is that we have been sp
It became the victim of its own maturity. As the MBAs come in, risk aversion sky rockets. What absolutely kills it (from the perspective of an accountant) is there is still no favorable (to the company) way to treat R&D. It’s still an upfront expense, period and forever. This means deep pockets, patience, luck, and proper planning get involved. And we all now how much Milton Friedman taught those MBAs about that type of long-term attitude.
If I had to propose a solution, something akin to a ex-post recog
I bought an actual copy of Office 2010 a long time ago. Every time I get a new computer, I move the license. There is zero new functionality in anything post Office 2010 that I actually need or care about. I’m very happy not paying an annual Microsoft Office tax each year.
I’m stuck with paying Adobe an obscene amount of money each years for Adobe Acrobat Pro. I need to edit a PDF about 5 times a year. For 5 hours of use, I’m paying $200 a year – every year. Then Adobe loads massive numbers of crap-war- It isn’t that hard to code an open document format from scratch and have it not tied to Adobe or any other SAAS crapware maker. Perhaps an open source effort should begin to create a PDF-like format that is better than Adobe’s and has many FOSS reader/editor apps for it. At the end of the day, PDF basically stores a page layout, fonts, vector graphics and text. If Desktop Publising Software in the home computer days managed to do pretty much the same, how difficult can it be for open source coders in 2019 t
- An Open Document Format wouldn’t be PDF. Besides, engineering a document format is only the first step. Adoption of the format for interoperability across the entire economic system is the critical element.
It’s been tried. “tetex” was just such a language and format, and it has supported descendant “texlive.. There was very, very little market compared to the directly printer-supported Postscript and PDF. I know of _no one_ in modern computing who publishes any documents in TeX based formats rather than PDF or more web-based formats such as MarkDown and RST.
What makes you think that “PDF” is an open document format? The name itself is short for Proprietary Document Format, for crissakes!
The Portable Document Format (PDF) is an open, ISO standard. Anyone can implement a PDF reader, or creator, without paying royalties to Adobe.
This is how software like Foxit and Nitro PDF are able to exist, and flourish.
https://en.wikipedia.org/wiki/… [wikipedia.org]
I’m stuck with paying Adobe an obscene amount of money each years for Adobe Acrobat Pro. I need to edit a PDF about 5 times a year. For 5 hours of use, I’m paying $200 a year – every year.
More fool you. I use PDFElement on my Mac. I think that was a $99 “one and done” license.
I don’t rent software. Next major version of MacOS fatally breaks Apple’s Aperture. I can either rent Lightroom, or not upgrade the OS (especially since the current version will still get minor/security updates)..
I’m not going to upgrade the OS…- Foxit Phantom PDF? I think that costs less than Adobe.
I held onto Office 2010 to the bitter end; the reason being Outlook and my PST archive of emails. I’ve been slowly weaning off it for the past three years and honestly haven’t touched it in six months. A few weeks ago I pulled the trigger. I uninstalled the entire suite and installed LibreOffice instead. Works perfectly for what I need.
Unless you need Outlook (MS Exchange is the gold standard in email, and they know it and charge accordingly) or depend on 3rd party Excel or Word plug-ins, LibreOffice will p
- In the early days (80’s and 90’s) Software companies sucked you in with low initial licence charge, but nailed you on the annual maintenance (CA and many others were guilty of this). Business customers paid even less up front (Volume Pricing discounts normally in the 25-45% range from list), but still got nailed on the maintenance. Now it’s the SaaS per seat model of gouging. No more maintenance to worry about Sir, just remember to pay us your monthly subscription fee .
- The advantage before was that hobbyists and the poor could get support at much lower costs for aging software everybody knew like the back of their hand. Buy a second hand copy of Office and you’re looking at sub $30 annual costs, $7 annual TCO for second hand software with third party support in the private sector was not unheard of.
This meant that computing was affordable at low wages, and people could work hard and get ahead by carefully managing their cash flow. Now you have businesses who hire peopl
Actually, in the early days the initial purchase price was HIGH. Then, they realized that once the install base reached the saturation point lowering new unit sales, that they’d have to make their money on upgrades, not initial unit sales. It wasn’t until users realized that they didn’t have to do every upgrade that the support/maintenance fees hit, and that’s when VLA, MLA, and all sorts of other alphabet licensing programs kicked in.
- by grasshoppa ( 657393 ) <skennedyNO@SPAMtpno-co.org> on Sunday September 08, 2019 @04:56PM (#59172036) Homepage
It’s not just the cost that’s gone in the wrong direction, but so has usability. Seems that each new version makes the software package harder to use, either through the introduction of new bugs or by the brilliance of a “redesign”. There are no UIX experts driving the ship of ANY software package that I’ve seen ( windows, apple included ), and it shows.
I’d be more than willing for software to get more expensive if it’s utility increased along with it, but that’s simply not the case.
Stop renting your software. Renters generally pay more in the long run.
- Still paying the same price I’ve paid since upgrading to Linux. All my software is free, as in free beer & as in freedom. And yes, it’s the only OS I use for work.
Hey me too.
Though I have paid some money for software in the past 10 years. A couple of Android apps that were worth the price; some were from FOSS advocates. Also some games that aren’t FOSS. So maybe I spent $300 in the last 10 years. So not so crazy!
- My rent goes up 4.5% every year but “inflation” is under 2%. Same for my healthcare expenses. The only thing that didn’t go up 4.5% (besides a few things that went up 5 and 6% like dog food) is my kid’s tuition and the only reason that didn’t go up is that they have an agreement that it’s locked at the price agreed on when she started. I still paid an extra $6k this year vs her freshman/sophomore years because of reasons.
Just think, in a few short months she can go to work making somebody else rich whil
- An increase from 9.99 to 12 bucks is easier to swallow than 700 to 1000 bucks
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