August PLUG topic: Kylix

[David P. Schwartz]

Wayne Conrad wrote:

> > > On Wed, 25 July 2001, "David P. Schwartz" wrote:
> > > > With all that free (as in speech) code (and coding time) these folks give away, how DO they pay for rent and groceries, anyway?
>
> > Wayne Conrad wrote:
> > > The same way most developers always have...  by providing a service to our employer.  Not that many developers work on shrink-wrap software  Most developers work on internal systems which aren't for resale  And they will need me whether they make me write it from scratch or let me adapt open source tools to the job (this stuff just doesn't assemble itself, luckily for me).
>
> On Fri, 27 July 2001, "David P. Schwartz" wrote:
> > So, you're being paid for your programming time...
>
> Correct, I'm being paid for my time.  I'm not selling software.  An easy test of this is to ask my employer to pay me a fixed amount for each piece of functionality that I'm asked to provide, and I'll go home after I get done with it and send him a bill.  If my employer says no, then I'm not being paid for the software I write or configure.  I'm being paid for my time.
>
>   Wayne Conrad

Every product you buy, whether it be at the grocery store, the department store, wherever, has a portion of it's price going to the retailer, a portion going to the distributor(s), and a portion going to the manufacturer.  Some of the amount paid to the mfgr is for "intellectual property".  Nothing you purchase in a store costs even 5% of what you pay in terms of its raw goods
costs.  I don't get the issue people have around paying for software.

The only way companies can really make a profit is by gaining leverage on their costs of goods plus costs of manufacturing.  An average employee who's paid $10/hr in a mfgr job is part of a larger equation whereby the company is earning between 100 and 1000 times that.

The stuff inside a box of cereal costs less than the package, yet people seem happy to pay nearly $5/box for cereal these days.  A floppy disk and CD cost more to manufacture than the entire box of cereal.  Some people argue that the major difference is that cereal is consumable, whereas software is not.  I guess the same argument can be made about cars, that they're consumable.
So you don't mind paying $20k for a car that costs less than 20% of that in raw cost of goods.

If you measured the "consumption rate" of software by the number of times you used software, then maybe $5/use would satisfy you for most needs -- but would you pay that for your email service?

We are able to earn as much as we do as software developers because there is a far greater demand for our services than supply, and because the results of our labors are HIGHLY leveraged by the people who pay us.  If a company isn't earning 10x what they're paying us for our time, they're not being very smart.  If the results of our work were priced like cereal, then we'd be
earning $10/hr, and the company would be earning 1000x our pay off our efforts and we wouldn't be having this discussion about "selling software" because it would be designed to be consumable, like cereal, and sell for $5 per use.

-David