Written by David Tebbutt, MicroScope 08/85 item 02 - scanned
FREE FOR ALL FIGHT TO SELL SOFTWARE (column)
Why pay several hundred pounds for a piece of software when you can buy the same thing for one hundred pounds? Why pay fifty pounds for a piece of software when you can get its equivalent free of charge? I don't propose to answer these questions. I pose them as an introduction to an industry sub-culture which seems to be gaining momentum and, ultimately, may pose a threat to the traditional software supply chain, right down to the dealer.
Rumour has it that there are some Lotus 1-2-3 clones in the offing. If it's true then I'm sure that Lotus is all ready with its big legal guns to blow the publishers out of the water.
It's ironic that a founder of Lotus is also a founder of Compaq, the company best known for its cloning activities. I refer of course to Ben Rosen. The clones, if they ever appear, will cost around £100 compared with a 1-2-3 price of £430. What do you think will happen? Will the dealers carry on selling 1-2-3 for its wider margin or will the new products take over? Would the increased volume at £100 be enough to make up for the lost margin? Will the sellers go for a mail-order or direct-mail campaign, and if so, where does that leave the dealer?
I ask these questions because, just at the time when we start to look to software and services for our income, we see the possibility of software revenue drying up. Software that needs to be maintained and supported will not be threatened. Anyone who buys a cheap mail-order payroll probably needs their head examined. Any vertical market package where the requirements change regularly is proof from the sort of threat outlined.
Having said that, it's worth noting that an American accounting package was advertised recently at $50. Over 15,000 enquiries were received from a single advertisement. In America it seems there is a 'what the heck' mentality. After all, $50 isn't a lot to gamble. In the event, the package proved to be robust and, following a favourable review in one of the magazines, sales soared.
Presumably because of the vast size of the country, Americans are much more inclined to deal by mail order than the British. Given a favourable review in a reputable magazine, I suspect we'd shrug off our inhibitions to save a few hundred quid. I know a lot of people who have gone for Turbo Pascal for example, and that is just the thin end of the wedge.
Let me tell you about Andrew Fluegelman, a hero in many people's eyes, who died recently. Andrew was the creator of a software concept called "Freeware". He hit on the idea of sending his file-transfer program, PC-Talk out into the public domain on disk and inviting satisfied users to send him a donation ($35 suggested). He sent the annotated source code and object code on one disk and a 70-page manual on another. The program and documentation was copied and passed around, chain-letter style, and before long Andrew needed two full-time employees simply to handle the cheques. Shortly before his untimely death he estimated that over 100,000 people were using this program. Even if only ten percent sent him the suggested fee. . . well, do the sums yourself.
I talked to one man in this country who tried the Freeware approach and it got him nowhere. Off went the programs into the public domain and back came. . . four cheques. He started selling his products through advertisements and he's sold hundreds.
There must be something about the British mentality that prevents us sending money once we have possession of a thing. Eric Bagshaw at the NCC wonders if it is because we are conditioned to getting things for 'nothing' courtesy of our tax and welfare state system. Margaret Coffey of Micro Decision wonders if it is because we have become used to getting software 'free' through magazine listings, an approach which didn't really take off in America. Many business people reckon that it's too much hassle to raise a cheque for a small amount of money. It could just be that in the USA people have more respect and concern for entrepreneurs. Whatever the reason, it probably comes as a relief to our software industry at the moment, but can it last? Can a leopard change its spots?
My guess it that cheaper software is going to become a very hot issue very soon now. Will the 'establishment' companies maintain their high prices in the face of mounting criticism? Can you imagine what would happen to the rest of the software business if just one establishment company, MicroPro say, dropped its prices to Adam Osborne's Paperback level?
I'm off on holiday tomorrow. I'll leave you with that thought.