Written by David Tebbutt, MicroScope 09/86 - scanned
BOYCOTT THE LOW-COST SOFTWARE BANDWAGON
Just over a year ago, I predicted in this column that the day of cheap software was almost upon us. If a year counts as almost, then I was right. To be fair, I think I was a bit ahead of myself.
There's no doubt though that the launch of Amstrad's PC1512 triggered some drastic price cuts. Until this £399 machine was announced, the software publishers couldn't think of a good reason to drop prices. And, without a decent excuse, it might have looked like an admission that their products were overpriced before.
The fact is that sales volumes in the pre-Amstrad days were not that huge, so product prices started off high. It was an unspoken, but very convenient, conspiracy that kept them high. US companies with their larger markets, and British ones with long-established products, could have dropped prices long ago, once they'd recovered their development costs.
Still, it's happening now and I must admit I'm wondering how much thought has gone into the exercise. Some companies, like Sagesoft and MicroPro have thought carefully about their pricing strategies and how they will avoid letting the customer down as a result of slimmer margins all round. Other companies seem to be just cutting prices because everyone else is doing it, and they're the ones who could be heading for trouble.
Some software is dead easy to sell, learn and use and high prices are unjustified. Once introduced, the price can fall, sales volume will rise and everyone will be happy, especially the customer.
Other software may be truly complex and will require more effort all round and the price should take account of this. Still, even with this second group of products, once the customer has mastered them support should no longer be required.
The third category of product trends to be complex, but it has two additional characteristics. It is central to the company's well-being and is subject to change. Accounting software and payroll are the most common examples.
The price-cutting mania, while understandable for the first category, seems to have spread to the other types of software too. Thanks to Alan Sugar, price has become the key issue, the hidden assumption being that payrolls, like all PCs, are equal apart from price. This is a very frustrating time for companies who know their products are better than the competition's or that the competition is a load of rubbish. They have to sit it out until the customer wakes up to the need for proper support.
The sensible answer is for dealers to boycott low-cost serious software and to stick to those products which give enough margin for a professional approach. Unfortunately, the chains of high-street consumer electronics and office product stores will flog anything, oblivious of the fact that they are doing the computer equivalent of selling a child a box of matches.
So where does that leave you, the dealer? Do you join the low-cost brigade, or hope that the world comes to its senses?
I think we could be about to witness a re-run of the home computer boom. Cheap hardware and software will suck in thousands of users who six months ago had no intention of computerising their businesses.
Many of these will be smart and realise that they have made a big mistake, and will use the computer they can afford to pay for help. Their disillusionment will spread and, after the initial boom, we will see a marked slowdown in sales as people take stock of what, if anything, they have achieved with their budget computer systems.
One thing could bring people to their senses earlier - a sticker on all serious software products, giving users some idea of what they're letting themselves in for. Perhaps tests could be carried out under the auspices of the newly-formed British Micro Federation.
After an explanatory paragraph, the sticker could categorise products under the following headings: ease of learning; need for updates; amount of free support; risk factor. The risk factor is there to remind the purchaser of how severe the business consequences of failure are likely to be.