Text 5115, 224 rader
Skriven 2005-06-17 22:20:46 av Rich (1:379/45)
Kommentar till text 5114 av Geo (1:379/45)
Ärende: Re: Everyone should take a pay cut
==========================================
From: "Rich" <@>
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New software is not less expensive. Let's say you simply wanted to =
create a product that was competitive with what existed 10 years ago = instead
of competitive with today's software. It will cost more than it = did to
produce 10 years ago because for as many man years as it takes to = produce
those man years cost more today. It won't take you fewer man = years to
produce.
Your attempt at math is way off. You have several fatal flaws =
including your continued attempt to pretend that fixed costs have not =
increased dramatically, pretending that variable costs have not = increased,
pretending that the revenue to support the increased costs = and investment is
also unchanging, and that there is no inflation = either. This is above and
beyond your implication that a more = successful product should not actually be
expected to be more profitable = particularly since this is what provides the
motivation for investment = and innovation. In regard to competition, the
success of such products = and the dramatic growth of the market that you made
such a big deal of = create openings for competition that keep prices at the
right level.
Now, George, for your own businesses you are free to drop prices to =
progressively become less profitable, if you ever were. You are also = free to
enter any market where you believe that prices are too high and = sell a
competitive product for less. This is what Microsoft has a = reputation for
with Office being a prime example of a product that sold = for less than the
products with which it competed and as we have = discussed has continued to
drop in price while increasing in value.
Rich
"Geo" <georger@nls.net> wrote in message news:42b3a893@w3.nls.net...
"Rich" <@> wrote in message news:42b3988f@w3.nls.net...
>> much more labor is required for today's software because you get so =
much
more of it.
I don't agree, it's not "today's" software that requires more labor, =
it's
mature software that requires more because it suffers from the =
featuritis
problem of trying to add every feature anyone could ever ask for. New
software is inexpensive to make compared to the past.
>> When Microsoft Office for Windows was released in 1990 containing =
Word,
Excel, and PowerPoint it was $995. In 1991 Mail was added and the =
price
dropped to $750. Today, the current much more functional versions of =
those
applications are included in Microsoft Office Standard Edition 2003 =
for $399
SRP for full packaged retail non-upgrade with a street price 30% lower
=
(http://www.atomicpark.com/xq/aspx/microsoft-office-2003-standard/prodid.=
189
44/buy.software/qx/productdetail.html). Volume licenced copies are
obviously less expensive.<<
Ok, now lets try to figure out how many copies of office were sold in =
1990
compared to 2003. From 1988 to 1990 (figure a 3 year life time for a =
PC)
there were 44 million pc's sold, so lets assume a copy of office sold =
for
each one (zero piracy), that's 44 million copies of office times $995 =
equals
43 billion dollars maximum market size.
In 2001 thru 2003 there were 405 million pc's sold, times $399 equals =
a
maximum market size of 161 billion dollars or a 360% increase in sales =
if
you didn't gain any market share. So just based on market growth the =
price
should have come down to $276 SRP not $400, and that doesn't take into
account the fact that office gained a hell of a lot of market share =
during
that time period. If it's market share went from 40% to 80% (not =
unlikely)
then you can take that $276 down to $138.
PC figures from http://www.pegasus3d.com/total_share.html
Geo.
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<DIV><FONT face=3DArial size=3D2> New software is not less=20
expensive. Let's say you simply wanted to create a product that = was=20
competitive with what existed 10 years ago instead of competitive with =
today's=20
software. It will cost more than it did to produce 10 years ago =
because=20
for as many man years as it takes to produce those man years cost more=20
today. It won't take you fewer man years to produce.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2> Your attempt at math is =
way off. =20
You have several fatal flaws including your continued attempt to pretend =
that=20
fixed costs have not increased dramatically, pretending that variable = costs
have=20
not increased, pretending that the revenue to support the increased = costs
and=20
investment is also unchanging, and that there is no inflation = either.
This=20
is above and beyond your implication that a more successful product = should
not=20
actually be expected to be more profitable particularly since this is = what=20
provides the motivation for investment and innovation. In regard = to=20
competition, the success of such products and the dramatic growth of the =
market=20
that you made such a big deal of create openings for competition that = keep=20
prices at the right level.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2> Now, George, for your own =
businesses=20
you are free to drop prices to progressively become less profitable, if = you
ever=20
were. You are also free to enter any market where you believe that =
prices=20
are too high and sell a competitive product for less. This is what =
Microsoft has a reputation for with Office being a prime example of a =
product=20
that sold for less than the products with which it competed and as we = have=20
discussed has continued to drop in price while increasing in =
value.</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<DIV><FONT face=3DArial size=3D2>Rich</FONT></DIV>
<DIV><FONT face=3DArial size=3D2></FONT> </DIV>
<BLOCKQUOTE=20
style=3D"PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; =
BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV>"Geo" <<A =
href=3D"mailto:georger@nls.net">georger@nls.net</A>> wrote=20
in message <A=20
=
href=3D"news:42b3a893@w3.nls.net">news:42b3a893@w3.nls.net</A>...</DIV>"R=
ich"=20
<@> wrote in message <A=20
=
href=3D"news:42b3988f@w3.nls.net">news:42b3988f@w3.nls.net</A>...<BR><BR>=
>>=20
much more labor is required for today's software because you get so=20
much<BR>more of it.<BR><BR>I don't agree, it's not "today's" software =
that=20
requires more labor, it's<BR>mature software that requires more =
because it=20
suffers from the featuritis<BR>problem of trying to add every feature =
anyone=20
could ever ask for. New<BR>software is inexpensive to make compared to =
the=20
past.<BR><BR>>> When Microsoft Office for Windows =
was=20
released in 1990 containing Word,<BR>Excel, and PowerPoint it was =
$995. =20
In 1991 Mail was added and the price<BR>dropped to $750. Today, =
the=20
current much more functional versions of those<BR>applications are =
included in=20
Microsoft Office Standard Edition 2003 for $399<BR>SRP for full =
packaged=20
retail non-upgrade with a street price 30% lower<BR>(<A=20
=
href=3D"http://www.atomicpark.com/xq/aspx/microsoft-office-2003-standard/=
prodid.189">http://www.atomicpark.com/xq/aspx/microsoft-office-2003-stand=
ard/prodid.189</A><BR>44/buy.software/qx/productdetail.html). =20
Volume licenced copies are<BR>obviously less =
expensive.<<<BR><BR><BR>Ok,=20
now lets try to figure out how many copies of office were sold in=20
1990<BR>compared to 2003. From 1988 to 1990 (figure a 3 year life time =
for a=20
PC)<BR>there were 44 million pc's sold, so lets assume a copy of =
office sold=20
for<BR>each one (zero piracy), that's 44 million copies of office =
times $995=20
equals<BR>43 billion dollars maximum market size.<BR><BR>In 2001 thru =
2003=20
there were 405 million pc's sold, times $399 equals a<BR>maximum =
market size=20
of 161 billion dollars or a 360% increase in sales if<BR>you didn't =
gain any=20
market share. So just based on market growth the price<BR>should have =
come=20
down to $276 SRP not $400, and that doesn't take into<BR>account the =
fact that=20
office gained a hell of a lot of market share during<BR>that time =
period. If=20
it's market share went from 40% to 80% (not unlikely)<BR>then you can =
take=20
that $276 down to $138.<BR><BR>PC figures from <A=20
=
href=3D"http://www.pegasus3d.com/total_share.html">http://www.pegasus3d.c=
om/total_share.html</A><BR><BR>Geo.<BR><BR><BR></BLOCKQUOTE></BODY></HTML=
>
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