
Why Software is Expensive - edw519
http://itscommonsensestupid.blogspot.com/2009/10/why-software-is-expensive.html
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a-priori
The most important one is the last one: anything custom-made is far more
expensive than something that's mass produced. Would you go into a tailor and
expect them to make you a suit at the same price as you'd pay for a pre-made
suit in a store?

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jorgem
Actually, in much of the third-world, this is not true. Hand made is cheaper
than manufactured . I know it seems ass backwards, but the best examples I
know are in Mexico:

1) Guy selling handmade pots (or any handmade product) -- his product is
worthless. Imported electronics -- very expensive.

2) It's cheaper to have 30-50 guys using hammers and handsaws on a home
construction site, than to pay for power tools.

So to the third-worlders: Hand made is cheaper.

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mattmaroon
So let me get this straight, you're comparing pottery to iPods and from that
drawing a conclusion?

Hand made goods are almost never cheaper, even in Mexico. A handmade pot would
cost more than a machine produced one. It's just that the cheap labor makes
the production equipment an unjustifiable investment because the ROI is less.
It's less cheaper, but still cheaper. In general of course.

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bsaunder
_cheap labor makes the production equipment an unjustifiable investment
because the ROI is less_

I think that's his/her point. The manufactured pot would need to be priced
higher (to pay for the production equipment over a reasonable depreciation
period) in comparison to the hand produced pot that incurs no such overhead to
produce, just cheap labor. So in effect, yes, a manufactured pot would be more
than a hand produced pot.

I do think the commenter confused the matter by including imported items in
the argument.

Given unlimited future earnings, you are right that a manufactured product may
be cheaper to produce since there's much less labor cost, but in all
practicality I'm not sure it applies.

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roc
Price is determined by willingness to pay, not cost. The article talks about
why costs might be high. But price is determined first and from _that_
acceptable cost levels set.

Software is expensive because people pay it.

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bsaunder
Interesting perspective, but don't you think it takes two parties to establish
a real price? If you want to pay $5 and I want to provide the service for
$100, then no price is set.

To say that it's only the buyer's perspective seems to be ignoring the other
side (as you correctly point out the OP did).

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mattmaroon
These are actually just wrong. Computers are dirt cheap, for instance, and
most programmers who aren't working on games don't need one that costs more
than $1,000 for any reason at all. In fact they shouldn't want a cutting edge
one, they'd rather see how the software runs on the computers that will
typically host it.

The overhead costs of starting the next Google are significantly lower than
the overhead costs of starting a McDonalds.

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Confusion
OK, I'll bite. If a set of tests on a feature that I'm working on runs in 15
seconds instead of in 30, I'll save that 15 seconds dozens of times. The
benefits of a faster computer add up fast and shilling out a few hundred extra
dollars is well worth it. Luckily, my employer got that. Especially fortunate
since it doesn't seem like my Z61m will be replaced anytime soon (as we aren't
doing so well) and a 2GHz core-duo with 2GB of RAM is only now starting to be
limiting. If he had gone for a budget option, I would be tearing my hair out
by now.

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mattmaroon
Even an extra few hundred per computer is virtually nothing. You can outfit a
whole 5 man shop with top of the line Dells for what a McDonalds pays for one
deep fryer. My startup quite literally ran for about 6 months on what one top
of the line commercial fryer costs.

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tybris
software expense = development cost/customers

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jng
$200 expensive?

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nsoonhui
It's expensive by Malaysia-- a third world country-- and most third world
country's standard.

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hboon
I don't know if it's considered a third world country (I don't). But $200 is
not expensive in cities there.

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mbrubeck
"Third world" hasn't been meaningful since the end of the cold war.
(Originally it meant the countries that were aligned with neither the Soviet
Union or NATO.)

Now the fashionable terms are "developed" and "developing" (which basically
mean "rich" and "poor" and so are obviously two ends of a spectrum, not
clearly-defined categories).

