[ILUG] Re: Monopoly

[Matthew French]

On Wed, Oct 17, 2001 at 11:13:23PM +0100, John McCormac wrote:
> Gerard J Keating wrote:
> > OK then, assuming a book costs about IEP20.00, will you write me a small
> > database system for 20 quid, please thanks..
> 
> Economies of scale: A book is a mass produced item. A database system is
> often a one off item. If a book was produced to be a one off or produced
> in very small numbers, then it would be very expensive. (It was that way
> before scriptoria and eventually moveable type printing.) There also has
> to be a demand for the product. 

Hmmm. I think it is not so much economies of scale, but the amount of
work that needs to go into producing software.

A book does not need to be tested or debugged. If it has a few typos
then nobody will mind.

A book does not have to be completely consistent and does not crash if
it is printed on the wrong kind of paper. If a chapter does not make
sense, then the reader can ignore it.

It is also true that a product is worth what people will pay for it,
but in my experience most software companies barely cover the costs of
developing their software.

This logic does apply to bulk products like MS Word or Windows. As I
see it most of the development cost for these products was covered a
long time ago and now MS are just adding a couple of new features,
using a little marketing and then the cash rolls in.

I expect that *when* people realise this and start moving to cheaper
software, MS will drop the price of their products to £5 a license and
still make a profit. Personally I think the amount of money they are
charging for XP and Office XP is both cynical and obscene.

- Matthew

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