[Search for users] [Overall Top Noters] [List of all Conferences] [Download this site]

Conference noted::hackers_v1

Title:-={ H A C K E R S }=-
Notice:Write locked - see NOTED::HACKERS
Moderator:DIEHRD::MORRIS
Created:Thu Feb 20 1986
Last Modified:Mon Aug 03 1992
Last Successful Update:Fri Jun 06 1997
Number of topics:680
Total number of notes:5456

88.0. "Attitudes regarding Software" by NY1MM::SWEENEY () Fri Jan 18 1985 00:09

There are editorials appearing in several magazines: Byte, Infoworld, Personal
Computing, etc that say "Everyone seems to think copying software is OK.  It's
not: it's theft." 

I've been argued with in the RAINBOW notes file for months regarding this. But
the pirates outnumber the authors by 20 to 1 in that file. 

The other note is for talking about the media and techniques of software
protection. 

Here I introduce the discussion of the attitude that some call a "ripoff by the
software producers on the consumer" and others call a "ripoff by the consume on
the software producers". 

What do the Hackers think? 

Pat Sweeney 
T.RTitleUserPersonal
Name
DateLines
88.1EDSVAX::CRESSEYFri Jan 18 1985 10:1114
    I think this is a big topic.  I don't mind discussing it her, and
    in the Rainbow file, and in Marketing.

    But I do think that there should be an entire notesfile devoted to
    
    	"The information industry and the law"

    It might be limited to laws to protect authors and artists, but it 
    could expand to cover such things as electromagnetic interference
    regulations and legal aspects of telecommuting.

    Any volunteers to the front?

    Dave
88.2TOPDOC::LYNCHFri Jan 18 1985 12:495
Re .1: There already is a file devoted to computers and the law...

	VIKING""::SYS$NOTES:LAWS

-- Bill
88.3ORPHAN::BRETTFri Jan 18 1985 15:119
When you see figures like "For ever $ we spend on Fortran, we make $50 profit"
I think I can tell you whose being ripped off.  Or are they, nobody is making
them buy it...

/Bevin

Of the $25,000 dollar Ada compiler project.  Lets see, it was about $2M to
develop so after the first 80 we're sitting pretty!
88.4ROYCE::KENNEDYFri Jan 18 1985 15:5213
It all comes down to the sustaining cost of the software. After 
a few years, most sites out in the real world are probably 
paying more money to SWS for support and consultancy than the 
capital cost of their software. These days we are not so bad at 
checking support agreements before we help someone. Indeed a 
while ago when I was with BP, the first I heard about our VAX 
support contract expiring (for about four VAXen) was when I 
rang up with a problem (contracts dept had ****ed us up!).

Make software cheap, but pass the real cost of the support onto 
the customer!

Hugh.
88.5SPRITE::MCVAYSat Jan 19 1985 12:024
 Reply <?> summarized the problem as "who gets ripped off".  
Manufacturers have a right to profits, but not exorbitant ones.  But 
just because a manufacturer may be gouging the customer is no 
justification for theft.
88.6SERPNT::GULDENSCHUHSat Jan 19 1985 14:3711
re: .5
I agree with the idea that high prices are no excuse for theft, but cannot
agree with the statement:

    "Manufacturers have a right to profits, but not exorbitant ones."

There is no such animal as "exorbitant profit"!  It can't be defined.  To
me as a consumer, 100% profit is "exorbitant".  To me as a stockholder,
500% profit is nice!

/s/ Chuck
88.7HARE::STANSat Jan 19 1985 17:4623
I believe software should be free.  (I belong to the Stallman school,
but the idea has been around long before that.)

Why can't manufacturers raise the cost of their hardware a little,
and then give away their software?  If the software is any good,
it will be an incentive for people to buy this manufacturer's
hardware.

Let consumers buy a total product, i.e. hardware plus software.
If I go out and spend 2 or 3 thousand dollars on a personal
computer, I don't want to open up the box, install it, and then
find it can't do anything.  As things are today, you have to
go spend another thousand dollars just to get software to go along
with the machine.

As far as authors go, let the authors (who want money rather than
recognition) sell their software to the manufacturers at the same
prices they do today.  If their software is good enough, the
manufacturers should be willing to pay for it and then add it to
their system's software as further inducements to buy their steel.

Such a procedure would also be likely to get rid of all the crap that's
out there in the marketplace now.
88.8LATOUR::AMARTINSun Jan 20 1985 15:4122
Making hardware vendors the only marketplace for privately written software
would not be likely to increase the overall quality of available programs.

A manufacturer would be unlikely to carry many programs which were similar,
nor would they be likely to want to constantly change the software they
offered to the public bundled with their hardware.  This adds up to making
it much harder for a "better" program to displace the current offerings.
(A high barrier to entry?).  It would be like the situation where *certain*
DEC operating systems only support a tiny subset of the terminals in the
world, and new kinds can't be added in; only worse.

If I were going to write some fantastic software for people with DEC computers,
I certainly would try and sell direct to them, rather than try to get DEC
to displace an existing product with whatever I had written.  Partially
because there is no coherent framework in place throughout the company for
adopting such products from outside, just a patchwork of kludges for different
product lines; and partially because no matter what kind of money deal was
made with DEC, it would be tough to come up with a believeable plan for
maintenance of the new software.

Would someone like to analyze this from a Darwinian angle?
				/AHM
88.9LATOUR::AMARTINSun Jan 20 1985 15:444
The central theme of the above was that the manufacturers would settle on
mediocre products, and that that offerings would stagnate.  I wasn't sure
all that I wrote added up to that point.
				/AHM
88.10LATOUR::AMARTINSun Jan 20 1985 15:5315
By the way, how does the Stallmanian kind of "free software" differ from
software which is truely free, and how do they differ from software which
has its price bundled into the price of a system, where you can't see it?

I remember that RMS wants to fund development by appreciative user showering
the wizardly developers with gifts.  And that it sort of requires the wizards
to live on bread and water until the new paradigm gets established.

"Grants" from manufacturers were solicited in order to provide people with
some sustainance.  I can see such grants leading into a slavery that
RMS would want to avoid, though.  And I wonder if the grants could turn
into blackmail ("Face it, the O/S is public domain, but only *we* understand
it, and unless you cough up some bucks you'll never see that device driver
written for it you so desparately need").
				/AHM
88.11RANI::LEICHTERJSun Jan 20 1985 23:3781
I've found myself of two minds about the issue of "software theft".  On
the one hand, intellectually, I believe in software as intellectual property,
and can defend the concept.  On the other, I find while I just will not steal
a physical object, even a trivial one - hell, I'm the guy who tell's cashiers
they've undercharged me - I just can't feel that I'm doing something wrong
when I move a piece of software from one system to another, for my own
convenience.

Arguing that software deserves protection, on analogy to books, is like all
other arguments by analogy:  A fine place to start a discussion, but never a
final answer to anything.  It's quite explicitly legal for me to tape radio
or TV shows.  Why not use that analogy?

It's a fact that most people just don't seem to feel that copying software is
theft.  Then again, most people don't feel that photocopying stuff is theft
either - though it often (legally) is.  (It's almost always a violation of
copyright to photocopy a piece of music, for example.  "Fair use", in this case,
is so restrictive as to be just about non-existent.)  It's all very nice to
argue that people SHOULD feel this is theft, but if they don't, and you fail
to convince them that they should, laws will not work to stop them any more
than laws prevent people from speeding, or engaging in homosexual behavior
(illegal in many states), or, for that matter, engaging in oral sex (illegal
in a couple of states, too.  For that matter, so is "fornication".)

Back when a friend of mine was in law school, he saw the following interesting
argument about what kinds of property rights the law must protect:  Trademarks -
unique signs of the manufacturer of a particular object - have an inherent
value.  If the manufacturer is known for the quality of his products, the
presence of the mark makes the object in question more valuable, since people
will have faith that it is worth having.  Hence, there is no need to CREATE
a new class of property, the "trademark"; the value is already there, and it's
up to the courts to protect that value.

Nice argument.  When I first heard it, I was rather impressed with it.  On
later reflection, though, I realized that it was totally bogus.  A trademark
has no inherent value unless it cannot be counterfeitted.  If anyone can
freely and easily attach the trademark to their own goods, no one will ever
identify the trademark with the manufacturer.  Now, the difficulty of counter-
feitting may be related to the form of the trademark itself - very rarely the
case for "trademarks", but consider signatures - or because the legal system
chooses to protect the marks.  In choosing to protect trademarks, THE LEGAL
SYSTEM ITSELF GIVES THEM A VALUE THEY NEVER HAD.  (Actually, what it does is
transfer the value of the manufacturer's reputation to the mark.)  So, the
previous argument is circular.

"Property" deserving of protection is not something that exists in a vacuum.
Things have to be ACCEPTED as property.  At one time, a human being could be
property; today, we don't accept that.  (In fact, there is something of a
trend toward a converse view:  JOBS are now viewed as property in some ways.
Hence, people can be protected from arbitrary firing since that would be a
deprivation of a property right they have in their job.)  My property right
to real estate does not allow me to prevent airplanes flying over it.  It
isn't possible to own navigable waterways.

It's clear that most people today have not really internalized the idea of
software as property.  Partly, this is exactly because it's so easy to dup-
licate sofware; it doesn't feel as if you are depriving anyone of anything
by doing something so trivial as copying a floppy.  Partly it's because
software is so intangible a thing anyway that putting down real money for
it seems odd.

The large software manufacturers are trying to push the opposite point of
view, and they are succeeding with the courts and the legislators - at least
for the moment.  However, if they don't succeed in convincing people that
copying is WRONG - as opposed to illegal - the laws will turn out to be
unenforceable.  So far, the software manufacturers don't seem to be getting
very far.

I suspect that the software manufacturers will fail.  I don't think people
will EVER come to accept software as property.  Yes, the courts will be
effective in preventing large-scale copying and sale; but they won't stop
the little guy who copies for himself and some friends.  Instead, we will
see a continuation of various means of copy protection.  I suspect they
can't be made completely effective without imposing unacceptable costs,
but some will survive.  Also, what WILL happen is that the successful
software makers will be those who evolve from suppliers of disks with bytes
on them to providers of services to customers - like training, high-quality
documentation, updates, access to data bases, and so on.  These things are
not easily stolen, and, further, they FEEL like property.

							-- Jerry
88.12HARE::STANMon Jan 21 1985 05:5212
Re 8:	I did not mean to say that programmers not belonging to
	a company shouldn't sell their software to that company.
	That's okay. Free enterprise and all that.  It's just
	that I believe that the software the company provides
	to its users should be free to the users (i.e. bundled
	with the hardware) in most cases.  Now and then, an
	extra-cost layered product should be all right.

	But I think it's ridiculous to pay a large sum of money
	for a computer only to find that it doesn't come with
	much software and you have to start laying out more
	and more money just to get appropriate software.
88.13EDSVAX::CRESSEYMon Jan 21 1985 12:4133
I think rock concerts should be free.  The artists oughta love their work,
and humanity, so much that they would just *want* to play their instruments
and sing for the pure joy of it.  Think of all the good *exposure* they'd
get.

I think stereo system manufacturers ought to include hundreds of tapes and
discs with their equipment to get you to buy it.  After all, what good is
it to buy an expensive stereo, only to get it home and discover you still
need to buy something else before you can play music on it.  Oh wait! I
forgot that you can listen to broadcasts with a stereo.  I think that the
companies that support broadcasting ought to do so without putting all those
annoying commercials in between the program material.

I think college textbooks should be free.  After you pay a very high price
for tuition, you discover that you still have to fork over more money for
the books you need to learn the subject matter.

For that matter, I think that medical treatment and other essential
services should be free.  Don't doctors take an oath to promote health?
How can they square that with taking *money* for their services?  Likewise
firefighters and policemen.  These people are supposed to be dedicated
public servants.  They should be willing to put their lives on the line
for you and me just becasue they have a sense of duty.

Teachers?  If they really loved the kids as much as they say they do,
they would volunteer to teach and earn money elsewhere at a *real*
job.

As soon as we all agree to work for nothing, we can implement all of these
fine ideas, and many more.  I'd also like to set up a skating rink for the
poor souls in hell, but I have to wait until some ice forms.

Dave
88.14NY1MM::KURZMANMon Jan 21 1985 17:3510
Re .-1: so I guess our fireman, doctors, policemen, computer people, etc.,
are all hypocrites.  What a great statement about our society. (or is it
capitalism versus socialism?).

computer hacking is just the tip of the iceberg about 'system hacking'
(the system being the overall environment around the computer).

But you say it much better.
Great job.

88.15LATOUR::AMARTINTue Jan 22 1985 11:0815
Re .12:

I know you didn't mean that only employees of a hardware vendor should be
able to write the software for that vendor's machine.  But I thought you
were proposing that the industry be turned around so that the manufacturer
is the prime focus for providing software for their machines, and that few,
if any, packages be available from third parties.

I assume then that you are willing to have the price for all sorts of garbage
bundled in with the systems that you have no intention of using.  How does
bundling software compare with unbundling it compare for the ability to make
large profits on the software?  ("Gee, we have to support this big programming
department for you customers" vs. "Oh, you wanted to take a DIRECTORY LISTING
of your files after you created them?  That's *extra*").
				/AHM
88.16LYMPH::DM_JOHNSONMon Feb 04 1985 11:34213
Thought this might be interesting as a way to enforce no piracy:



The Rick Bennett Agency, Inc
Advertising and Public Relations
1829 McCluhan Way
San Jose, CA  95132

Contact:  Rick Bennett, President
	  (408) 258-2708


For Immediate Release:
----------------------

SAN JOSE, CA.. February 19, 1985 -- Appearing today, for the first time, 
wa a radically new solution to one of the most serious problems facing
the software industry:  Unauthorized duplication of licensed software
products.  Rick Bennett, president of the Rick Bennett Agency, Inc., and
a principal in Mother Jones' Son's Software Corporation, has been doing
market research on his software "protection mechanism" since 1965, and 
believes it will wliminate a major percentage of illegal software 
duplication activities.

The protection mechanism is a special contractual clause, the soulcatcher
clause, which is part of the MJSS software license agreement.  It simply
states that, upon violation of the program license agreement, ownership
of the violator's soul passes to the software vendor.  Further, the
software vendor may "negotiate the sale of said soul to the first
smoking, blood-drenched apparition with fangs (SBDAWF) that meets our
price.  The SBDAWF may collect your soul at any time of his/her/its
choosing."

Bennett explains the evolution of his soulcatcher clause:  "Traditional
diskette copy-protection mechanisms just make people mad.  They are not
that hard to crack, and create an adversary relationship between
customer and vendor.  Electronic "keys" for computers will make customers
equally mad, and will probably limit potential success of a software
product.  I've been working on a contractual solution to this problem
since I was a college freshman in 1965.

"One of my college buddies loudly and often proclaimed he was an
atheist.  One evening, while reading Alfred North Whitehead (as most
all college freshmen get around to doing), I decided to test his
committment to atheism.

"I went to his room and offered him a quarter for his soul.  The
argument was simple.  If he really was an atheist, he'd think me
a fool for wasting a quarter and accept my proposition.  But if he
were really an agnostic,merely a doubter, he'd refuse my quarter.
Overcome by intellectual pride, he took the quarter and I bought
his soul.  The fun started about a month later.

"He really wanted his soul back.  Part of my experiment was to see
how badly.  By the end of the semester, he paid $100 for his soul,
and admitted that he was an agnostic after all.  That got me thinking
about the possibility of putting a soulcatcher clause in certain
types of legal contracts.

"over the years I'ver purchased many souls.  With only on exception,
the previous owner always wanted his/her soul back, and is willing
to pay a premium.  The one above-referenced exception was a stranger
next to whom I was sitting on an airplane, and he's probably been
trying to find me ever since.

"Recently in New York, one of my friends had occasion to buy a soul at a
black-tie dinner party.  He sat next to a former nun, who claimed now
to be an atheist.  Familiar with my soulcatcher story, he offered here
a quarter for her soul.  The entire room went silent until the
negotiation for the nun's soul was concluded.  By the end of the
evening, she bought he soul back for $10 and admitted to the entire
group that she was abdicating her atheism."

Bennett concluded:  "Ive been waiting for an advertiser to try this
approack ever since I got into the computer business in 1969.  It's
worth a try, since the software industry is really out of ideas for
protecting their intellectual revenue.  I finally found both a software
product and some investors willing to bet on the soulcatcher clause.

"My experiments worked on the hard-core minority, so maybe the average
citizen will have the same reaction.  As a bit of insurance, the
Twilight Zone theme plays from the computer's speaker each time the
program is loaded.

"As the investors approved the final ad copy, someone lifted a line
from the popular movie Ghostbusters.  He said, 'Perhaps, we'll have
a success of biblical proportions.'  All I can say is, the first
SBDAWF that knocks on my front door will have to follow me through
the hole I make as I go crashing out the back of my house."

=====================================================================

From the attached ad copy:
-------------------------

FOR $30 YOUR COMPUTER WILL RESPECT YOU IN THE MORNING

Your computer thinks you're a real moron.  So do the big-ticket
software packages like Synphony, 1-2-3, Wordstar, etc.  Every
morning, when you boot your IBM PC or compatible, both hardware and
software treat you as if you had a two-digit IQ and the reflexes of
a turnip.

First, you plod your way through all those nested menus.  Once into
your application, the software thinks you're too ignorant to care about
multiple-keystroke commands.  And the hardware assumes a screen cursor
that moves at ten characters per second is the fastest thing you can 
handle.

Even before you invoke insulting software packages, the system assumes
you are one lousy typist who can't possibly exhaust the capability of
a 16-character type-ahead buffer.  If you do get more than 16 characters
ahead, it just throws all those characters away.  But then, someone as
stupid as yourself can't possibly be doing anything important.

And heaven forbid you should want to leave your computer unattended.
If some co-worker doesn't blither by and inadvertently reformat your disk
or type garbage into your spread sheet, you should still plan to return
soon.  Nobody [!?] has seen fit to protect the phosphor on your screen with 
a blanking mechanism.

Announcing Mother Jones' Son's Software
---------------------------------------

About thirty-two years ago, Mrs. Jones was just getting over a large
bellyache.  She gave birth to a son, Morris.  Several months ago,
Morris got rid of a large bellyache of his own.  He gave birth to
about 2000 lines of assembly language code that slapped a little
respect into your computer.  For $30 you can adopt one of Morris's
babies.  For a little more, you may even have the source code.
Then you can reall do some genetic engineering on your rude little
bucket of sand.

We call the package "MJ".  It gives MS-DOS much more respect for you.
A serious attitude adjustment.  It downright burns new synapses into
Symphony, 1-2-3, Wordstar, and every other package we know of.
It even gives Sidekick a kick in the rear end.

...

Mother Jones' Son's Software Pedigree
-------------------------------------

Morris Jones' brilliance became legendary at Amdahl.  Singlehandedly,
within 90 days, Morris wrote the design-entry and simulation program
that produced the Amdahl 5860.  That accomplishment earned him the
title of Principle Engineer.  There were just a few such individuals
in all of Amdahl.  As you might guess, there's now one fewer.

As for MJ's 2000 lines of PC brain surgerym hos good is it?  Let's
putit this way.  Most of the really good silicon surgeons learned
assemply language by studying other people's well-written assembler
source code.  MJ code is good enough, tight enough, that we're not at
all ashamed to make it available to you.  An evening with MJ source
code could will beat a whole semester of reading the swill you'll
find in the local college book store.

Copy Protection and Program Licenses
------------------------------------

If it weren't enough that your system treats you like a moron,
how about those absurd copy protection mechanisms?  And license
agreements you sign, knowing you have no choice but to violate
them or risk going out of business?

MJ code is not copy protected.  We even offer you the source code.
Copy the software for your friends, if you wish, provided you send
us the discounted price when you do.  Here;s our individual program
license agreement...:

	You agree to treat this software as if it were a book, with
	the exception that you are granted the right to make backup
	copies.  You are free to take it with you to another
	computer, provided there's no possibility somebody might be
	using it on your computer.  You are free to loan it to
	someone, provided you cannot use it while it is on loan.
	You are free to sell it, so long as the new owner agrees to 
	all these conditions.  Unlike a book, you may even copy it
	and give it to a friend, provided your friend signs this agreement
	and that you send us the list price of the software less tha
	$10 in handling and processing you've saved us.  If you build
	our source code into your own integrated application, for
	resale, we won't be unreasonable in negotiating a royalty
	arrangement.

	As for warranties, you may return defective software within
	thirrty days for a replacement.  But just like any other
	self-help book, its value to you is what you make of it.
	No matter how badly it damages your life, or that of your
	customers and friends, we're not obligated to do anything
	about it.

	Now for the, ah, fangs.  Vilatye this agreement and our
	attorneys will see to it that life on earth, as you know it,
	is completely ruined.   Also, you agree that, 30 days after
	you violate this agreement, ownership of your eternal soul
	automatically passes to us, and we have the right to
	negotiate the sale of said soul to the first smoking,
	blood-drenched apparition with fangs (SBDAWF) that meets
	our price.  The SBDAWF may collect your soul at any time
	of his/her/its choosing.

Given the remotest chance some supernatural entity could actually
enforce the "soulcatcher" clause, you'd be a real bozo to take
any chances.  But then we give you more credit for intelligence 
than does our competition.  So does Mother Jones' Son's Software.

Mother Jones' Son's Software
6310 Cabellaro Blvd.
Buena Park, CA  90620

(714) 522-7762
88.17DAEMON::GENTRYWed Feb 06 1985 00:4910
Getting back to the subject of pricing, the thing that I find
unreasonable is that a given piece of software will be priced
differently based not on what functions it provides, but rather
on the price of the HARDWARE on which it will run.  This is
regardless of the fact that it is EXACTLY the same software.

Why should a piece of software be priced on way if it is going to
run on an LSI-11/03 and a different way if it is going to run on
a PDP-11/70.  Both kits consist of the exact same collection of
bits.
88.18VIKING::WASSER_1Wed Feb 06 1985 13:116
RE .-1
	REMEMBER!  Prices are set to maximize profit. If you can increase 
	the price without losing a proportionally greater number of customers, 
	your profit has gone up!  It seems that the more a person has paid 
	for hardware, the more they are willing to spend on software (sort 
	of like throwing good money after bad).
88.19ERLANG::CAMPBELLWed Feb 06 1985 15:074
It's also true that on, say, a Pro-350, chances are only one person is using
the software.  On an 11/70, there may be 20 people using it at once, and
hundreds who use it from time to time altogether.  It makes sense to me
to charge more if more people use it.
88.20EDSVAX::CRESSEYWed Feb 06 1985 16:0733
RE .17 and following:

    There is a third factor to consider as well: cost.  The cost of
    software, like anything else, can be divided into fixed costs
    and variable costs.  Fixed costs are the same total, whether you
    sell one license or fifty thousand.  Variable costs are incurred
    on a per unit basis.

    The largest fixed cost for a software package is likely to be
    the engineering effort required to develop and debug it.  The
    largest variable cost is likely to be the distribution medium and
    the cost of writing the software onto it.  The fixed costs for
    software are a very large percentage of the total costs, compared
    to say the costs that go into an automobile. (This is why authors
    will go broke if they get no legal protection from pirates).

    Before you make any profit, you have to recover your costs.  The
    way you plan on recovering your fixed costs is by dividing your
    fixed costs by the EXPECTED number of units that will be bought.
    If software is written to run on more expensive hardware, the
    usual expectation is that fewer units will sell, and therefore
    the fixed cost per unit will be higher.

    With regard to software that will run on both a PRO and an 11/70, and
    that consists of the same identical set of bits, you could argue that
    the engineering costs should be allocated in proportion to expected
    license sales, so the effect would drop out.  However, a significant
    share of engineering expense is actually TESTING the bits on the
    intended configuration, to ensure that it really works.  The cost of
    certifying some software on a given configuration should be borne
    by those customers who buy licenses for that configuration.

    Dave
88.21LOGIC::PUDERFri Feb 08 1985 01:514
You forgot one variable cost: support. (You do support your software, don't
you?  :-)

	Karl.
88.22EDSVAX::CRESSEYFri Feb 08 1985 09:3313
    Naah. Only key-sheeters need support.  :-)

    I was not trying to be complete, just illustrative.  Some vendors 
    "unbundle" their support to varying degrees.  That complicates the
    picture.  I thought that illustrating variable costs with something
    that is inherently part of what is sold would be clearer for
    this discussion.

    I shouldn't have identified media and reporduction costs as the
    "major" variable cost, though.  Any warranty support you provide
    will probably eclipse production costs.

    Dave
88.23ERLANG::CAMPBELLMon Feb 11 1985 17:2420
You left out what is actually one of the largest costs, at least in the micro
world:  marketing.  One full page ad in Byte costs over $10,000.  Let's say
you take out full page ads in the major rags (Byte, Infoworld, Personal
Computing) and some business-oriented publications (Business Week,
Inc.).  Do this for a year and you're looking at a $1 million plus
advertising budget.  Then figure out how much of a cut the software
distributors are going to take (about 30% of retail), markup for the
retailer (another 30%).  This stuff gets into serious money real quickly.

A while back Byte was running an ad for itself which showed a reduced
black-and-white reproduction of an ad for Canon personal computers,
over the caption "This ad drew 2,358 responses".  (Not sure of the
exact number, but it was between 2,000 and 3,000.)  Now, in this kind
of advertising, if 1% of the responses actually result in a sale, you're
doing pretty good.  That's 23 systems.  It cost them $10,000 to get
about twenty sales, or $500 per sale.  That $500 has to go into the
price charged for the product.

- Larry Campbell
  Eastern Research Lab (Hudson)
88.24EDSVAX::CRESSEYMon Feb 11 1985 18:2626
    I'll say it again.

    I was trying to explain the idea of fixed costs and variable
    costs, not come up with a comprehensive list of costs, or even
    include the major costs.

    I know that marketing is a huge cost, but it would have been
    a poor choice of an example to include in my discussion, because
    it does not help clarify the distinction between fixed and variable
    costs.

    In fact, advertising costs (which you called "marketing costs")
    muddy the waters considerably, if you have more than one product
    to sell.  Many ads are ads for the company as much as ads for its
    various products.  How to you allocate the cost across the various
    products in such a case?

    Advertising costs have some of the qualities of a fixed cost, and
    some of the qualities of a variable cost.  In particular, if you
    take out an ad for a product that are already selling, you would
    like to recover the cost of the ad, not from the TOTAL sales, but
    from the ADDITIONAL sales the ad makes possible.

    I'm completely lost now.  How do advertising costs influence
    the question of whether software should cost more if it's for
    an expensive machine?
88.25DAEMON::GENTRYThu Mar 07 1985 23:0315
I'm sorry, I don't believe it is right to charge more because more
people may use it either.

Are you willing to pay 4 times as much for the same car I just bought
just because you may have 4 people in your family where I have one?

I know this is a simplistic argument, but the idea of differing prices
for the same bits annoys me.  I feel it is unfair to someone.  It
prompts people to come up with ideas like

	"That person just bought kit x for price y for his 11/03.  I
	 have an 11/70.  I should go out an get an 11/03 so I can
	 get the software at a reduced price, then run it on my -70."

Yes, it is illegal, but you have to catch the person at it.
88.26FKPK::KONINGFri Mar 08 1985 15:079
Then of course you may end up with cases like Unix, where if yo buy a
16-user version it costs less than the 32-user version -- and only works
for up to 16 users!

Seriously now, there's only one rule for software prices (in civilized
countries, anyway) : whatever the market will bear.  If you don't like
the prices, write it yourself or find a cheaper supplier.

	Paul
88.27--UnknownUser--Sun May 26 1985 16:000
88.28AKOV03::ROYALSun May 26 1985 16:003
If sodftwre was are was written without "bugs", had COMPLETE documentation, and weren't "pufed up" fed up" with sales hype, pirating would be a dead issue.... Actually, pirating is a misnomer, as most people I know "pirate" a program only
 to try it ourt
to see if it is good (does what they want, in a reasonable fasion.). I will personaly BUY ANY good software package that I think is worth the $ asked for....
88.29NY1MM::SWEENEYMon May 27 1985 23:359
re: .-1

What YOU think really doesn't matter.

No one is forcing you to use or buy the software.

If you don't like the terms of sale, don't buy it.

Pat Sweeney
88.30SYBIL::BURROWSTue May 28 1985 01:3329
The terribly garbled message in 88.28 read:

                                ---------------

If software was written without "bugs", had COMPLETE documentation, and weren't
"puffed up" with sales hype, pirating would be a dead issue.... Actually,
pirating is a misnomer, as most people I know "pirate" a program only to try it
out to see if it is good (does what they want, in a reasonable fasion.). I will
personaly BUY ANY good software package that I think is worth the $ asked
for.... 

                                ---------------

For those of you not used to hacking VMS and NOTES, here are two rules to
remember when writing notes.

	1) Back Space doesn't delete text it merely moves the cursor, so
	your original garbage is still in the file.

	2) Although the cursor automatically returns to the left margin when
	you type beyond the end of a line, no carriage return is put in the
	text. Many programs (such as the first base level of VAXnotes will
	display it wrong.

If you forget these, your note will be unintelligible by the majority of
readers. This will not lend anything to the hacker mystique you probably
wish to project in this file.

JimB.