Subject: Re: Motivating support contracts
From: hecker@netscape.com (Frank Hecker)
Date: Mon, 14 Sep 1998 13:40:17 -0400

Russell Nelson wrote:
> Brian Bartholomew <bb@wv.com> wrote:
>  > When I discuss the price of software, I often get the response that
>  > program Y only costs $99 (or $45, or $9, or whatever programs of that
>  > type are costing this week) which is cheap, and why am I making a
>  > fuss?  I care because as a purchaser I want the cost of software to
>  > approach the price to create it, not to float up to some
>  > marketing-derived disposable income-related price.
> 
> Sorry, Brian, this is a foolish idea.  There are many other costs than
> merely the price paid to create software -- including at very least
> the price to distribute and market it.  These are costs that are
> incurred even for free software.  For example, every time I answer a
> question on the qmail mailing list, that is the price I pay to market
> qmail (oh, and my services, to boot).

To expand on this reply (with which I agree), you could also mean two
very different things by the "price [really, cost] to create software":
the incremental unit cost to create a new copy of the software, or the
overall cost to develop that software in the first place.

Only the incremental cost to create a new copy of the software is zero
or near zero.  The development cost is never zero, whether we're talking
about proprietary software or libre software.  For proprietary software
the development cost is borne by the vendor and recovered through
right-to-use license fees.  For libre software the development cost is
amortized across multiple individuals donating their time.  For any FSB
that does significant original development of libre software, that
development cost will have to be accounted for in the business model and
recovered in some way through the FSB's pricing of its goods and
services. 

Frank
-- 
Frank Hecker          Pre-sales support, Netscape government sales
hecker@netscape.com   http://people.netscape.com/hecker/