Why clients want software developed cheap.
Posted in general | Posted on 16-07-2008
A couple of weeks back I was asked by a client to quote for a 25 page ecommerce website. After looking at his requirements I quoted him $450, which is quite low by any standards. The client called me with a surprised tone in his voice and told me that in that amount he would be able to buy a new computer and he was willing to pay me not more than $200 for the same. This is not an isolated case, but one from a dozen or so client interactions. I don’t want to imply that the clients are cheap; all of the clients I have dealt with are very good business people. Its just that they don’t know the value of software; and one of the main reasons for that is piracy.
Piracy
A year ago a relative of mine got an assembled PC, which came with a 260GB HD, CDROM, AMD processor and about 12GB of pirated software. Software right from Photoshop, Dreamweaver, AutoCAD to Oracle. My rough estimation of the total cost of the software was about US $21000, while the PC cost was only around $900. This is a common thing here in India and most of the Asian countries. The result of this is that people have no value of software here.
Surprisingly many people think that the software comes free when you buy a new PC. Its like if you buy a wardrobe you get all the clothes for free.
A recent encounter with a businessman I know was a real eye-opener. This guy was telling me about the rampant growth of piracy in the music and movie industry and how he had never bought a single pirated movie or music CD. Being quite impressed with him, I asked him from where had he bought the Vista operating system that he was using on his desktop PC. To my chagrin he expressed surprise at my question. He said that it came bundled with the computer. Since his computer was also assembled by a local vendor, the copy of Vista was surely a pirated one. After telling him about the same, he replied that he thought the operating system and other software like Microsoft Office came free with the computer. After I told him that he was using software worth $1200 illegally he showed surprise, but nowhere was there a hint that he would go out and buy legal copies of the same.
Intangibility of software.
Software, unlike other things in our daily lives, is intangible in nature. You cannot touch or feel it the way you feel a book or a car. And therein lies the problem. Most people when they buy some product want to feel the thing they have bought. They want to possess it. Say you have bought yourself a nice music system. You can enjoy all the tangible pleasures a music system can provide. Unlike software it also has a return monetary value; if you wish you can sell it back to a friend for the same amount of money or at a reduced price. Not so with software, once you have bought it you cannot sell it to another person. Of course when you buy some software product, say Photoshop, you get monetary benefits by providing services to clients by using it. But people are illogical, there motto is - if you cannot see or touch something it should be free!
What we can do.
The only way to get out of this mess is to educate people around you. Whether they are school children, business people, home users or even those who don’t use a computer, we need to get them to understand the value of software; the amount being spent by companies on development; the hard work and toil of programmers and that their are alternatives like open source softwares if you want a free solution.
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The client in question (and a lot of people…) also probably doesn’t understand the huge difference between mass-marketed software (developed once but sold to thousands or millions of customers) and bespoke development… where you *can’t* resell his e-commerce site to someone else, so he has to pay for all of the work himself.
U know wht most of the ppl buying assesmbled pcs don’t even know that a software comes for a price and that you have to actually pay to get a key or serial number. The hardware firm selling assembled pcs installs all pirated stuff required by the client on the machine before delivery.
The analogy of a music system actually is more apt than you think. You still have to have an input (software) or all you hear is amplified noise. People who would never steal gasoline to make thier automobile run will steal software to make the computer run. Plus, it needs a “brand name” - clients want “Adobe Photoshop” or “MS Office” rather than “image manipulation” or “business suite” software, even when those others are free to use, have equivalent functionality and open well-supported file formats.
Do you really think people today are dumb enough not to know that they use pirated software on their machines in India? IMHO there are a other important reasons why they knowingly do so (not justifying it):
1. Software, like foreign edition books are still sold at Western rates (which is unaffordable to most people here). How did the software companies solve this issue in China? Give massive discounts (80% - 90%) to switch behavior. The Price-Volume curve of traditional economics do not seem to work because of near-monopolistic situation in, say, Windows. Its not as-if there is someone working on crafting each copy of Windows in costly California for me to be paying those $$$. Gods sake, its copied in Gurgaon. Why not charge me a reasonable fee? They fix price for 1 million copies and try to sell 100 million at the same (and then complain when people copy).
2. The kind of quality you get in the software you buy (and the licencing terms used - “you don’t own this stuff, only a licence to use it, which we can change any way we want and we are not liable for anything which blows up”) is not prevalent in almost any other kind of industry. Granted, software is hard to do. So is building a Mercedes (have you tried it?). Does that mean its okay for the car to mysteriously sieze up on the highway in unpredictable ways (and throw up a General Failure Error screen?). They would be sued out of existence and that is why it doesn’t happen.
By now its almost too late to convince people to buy because piracy has become a habit and ‘bad’ habits are hard to change.
Make it reliable. Make it useful. Make it cheap. Why would i not buy it?
Good point Ram, but you misinterpreted my point. I was talking about the software that ‘came along with an assembled PC’. Leave aside the IT literate crowd; ask any person from the general population if they have any idea of the cost of the pirated software they are using (take Microsoft Office or Photoshop for e.g).
Regarding the first point, even if the prices of the software came down drastically many people will still want to use pirated software because its FREE (pirated).
Take the case of pirated books floating on the roads here (pune). They are selling pirated paperbacks for $2-$5, which originally cost only around $10-$20. But many people still prefer buying pirated copies because they don’t see ‘anything wrong’ in that and it also saves them a few bucks.
Unless we try to change the mindset of the general public we the developers will be at a loss in the end.