Tuesday, December 24, 2013

The Price of Software

This morning I was reading Robert Scoble’s Age of Context while waiting for my order to be ready at the fish market and came across mention of how inexpensive mobile apps have become. It brought me back to someone a profession of mine once said. This was back in the mid 1970s and computers were pretty expensive. I believe the university had just spent about a half a million dollars for a computer. Now the university had two computers. My professor predicted that in the near future people would spend more money on software than hardware. It seemed a daring prediction at the time. But of course he was right.

For the first few years of my career computers were still more expensive than software. A company might spend a couple of hundred thousand dollars for customer software but the computers still cost a lot more. Hard to believe today but that was the case for years. Computers did become less and less expensive. Software became more expensive at least as a percentage of total cost of ownership.

The PC era brought in a new time of less expensive computers. Software for personal computers was more expensive than the computers they ran on until Microsoft bundled the components of Office and dropped the cost of a lot of software through the floor. But software was still a big cost for businesses who required more software and at least some custom software.

Today when you talk about the cost of computers and software you have to look at different markets. Software can still be a huge expense for a business. With cloud applications hardware costs can become a very small piece of the cost of ownership pie.

For home users a lot depends on the user. Many people get buy with the software that comes with their laptop or PC and the software cost is buried. If one wants to do real work or play special games there is software to buy but volume makes the cost pretty low.  For phone and tablet users apps are ubiquitous and prices range from low to free. For many people the cost of the device is the second highest piece of the cost with the service/date cost being the highest and software often the lowest.

Of course a lot of free software isn’t completely free. A lot of it is advertising supported. We’re used to thinking of that as free though. Many apps cost companies serious money to develop but the give it away because it lets them make money in other ways.

For me I get excited about how inexpensive it is to write ones own software. Development tools are often free or low cost. With the price of computers and other devices so low the platform is available to a great many more people than ever before. No spending a quarter of a million dollars for a private computer or hundreds of dollars an hour for timesharing in this era. It’s a pretty exciting time to be involved in computing.

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