The Software Industry
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Thankfully it only applies to Oracle OpenJDK, which is essentially Standard Edition. I'd be surprised if any large companies continue to use it, at my last place I had a migration task to move all JDK installations from SE to the Adoptium OpenJDK versions. Took me all of about a day and probably saved the company a lot of money since the company was international and had a lot of employees. I suppose the only companies interested would be those specifically wanting the Oracle support, but is it worth the cost? I don't think so. Some other platforms do similar things where they charge different models based on the size of your business, either by the number of employees or the average annual revenue.
My question was: Should software be priced differently than ordinary goods? What is the justification for it? The production process is similar. An automobile manufacturer has a design bureau to design a new vehicle; production engineers to manufacture the vehicle; test engineers who test the vehicle for safety, compliance with various laws, etc; and a marketing and sales group to advertise the new vehicle and sell it through dealerships; and a service organization that coordinates warranty repairs through the dealership. A software company has senior developers who design the software; development engineers who write the code; test engineers who test the functionality of the software; and maintenance engineers who perform fixes when errors are discovered. The production process is far easier as one has to only copy hundreds of CDs as opposed to an automobile where several body parts have to be pressed out of sheet metal; the body has to be welded together and painted; the engine has to be cast and machined; the transmission has to be forged and machined: and the entirety of parts have to be brought together in an assembly line to be assembled into a complete vehicle. But an automobile is not priced on the basis of whether it is a single user vehicle or to be used by a family of six. Why the difference then except that the software guys have the customer by the gonads and are willing to squeeze hard to extract money?
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Software is a product. Much like TV, automobile, washing machine, etc. The latter are tangible while software is intangible but that is not an important difference. Once upon a time, when you bought a software, you paid one price for it, no matter how many persons in the purchaser company used it. Then they decided to charge according to the power of the processor the purchaser company used. This is like saying you have a larger living room and so the TV is higher priced. Then they decided to charge price/user. This is akin to the price of the TV or washing machine being dependent on how many persons are in the household. Now, Oracle has gone one step further and its Java licenses are based on the number of employees in the purchaser company, including janitors or messenger boys they may employ. If a customer refuses to accept the new terms, which yield hundreds of thousands if not millions of dollars more in revenue to Oracle, Oracle is threatening an audit of those companies to determine if any of the contractual terms are violated by the purchaser. Companies have sprung up to assist the purchasers in questioning the findings of these audits. What makes software different from common household goods such as TV, automobiles, etc? What justifies differential pricing based on number of users? Other than the greed of software vendors.
Vivi Chellappa wrote:
What justifies differential pricing based on number of users?
You are comparing apples with oranges. When you watch TV you do not use it to make money. When you use someone's software product, in most cases it is to keep your business going. So if you profit from using that software then maybe the owner should get a share of those profits.
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Vivi Chellappa wrote:
What justifies differential pricing based on number of users?
You are comparing apples with oranges. When you watch TV you do not use it to make money. When you use someone's software product, in most cases it is to keep your business going. So if you profit from using that software then maybe the owner should get a share of those profits.
So a bar installs a TV intending to attract more barflies and the vendor charges per barfly/hour whether the barflies are watching it or not.
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Vivi Chellappa wrote:
What justifies differential pricing based on number of users?
You are comparing apples with oranges. When you watch TV you do not use it to make money. When you use someone's software product, in most cases it is to keep your business going. So if you profit from using that software then maybe the owner should get a share of those profits.
So, if I buy a truck from General Motors for my freight carrying business, I should share my profits with GM?
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Vivi Chellappa wrote:
What justifies differential pricing based on number of users?
You are comparing apples with oranges. When you watch TV you do not use it to make money. When you use someone's software product, in most cases it is to keep your business going. So if you profit from using that software then maybe the owner should get a share of those profits.
I think you make a good point.
Richard MacCutchan wrote:
When you use someone's software product, in most cases it is to keep your business going.
However, if you compare this to a car, the analogy falls apart bec it would mean we would charge Uber drivers, delivery drivers, etc. more because they earn income using the product. But, still you point is a good one.
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Software is a product. Much like TV, automobile, washing machine, etc. The latter are tangible while software is intangible but that is not an important difference. Once upon a time, when you bought a software, you paid one price for it, no matter how many persons in the purchaser company used it. Then they decided to charge according to the power of the processor the purchaser company used. This is like saying you have a larger living room and so the TV is higher priced. Then they decided to charge price/user. This is akin to the price of the TV or washing machine being dependent on how many persons are in the household. Now, Oracle has gone one step further and its Java licenses are based on the number of employees in the purchaser company, including janitors or messenger boys they may employ. If a customer refuses to accept the new terms, which yield hundreds of thousands if not millions of dollars more in revenue to Oracle, Oracle is threatening an audit of those companies to determine if any of the contractual terms are violated by the purchaser. Companies have sprung up to assist the purchasers in questioning the findings of these audits. What makes software different from common household goods such as TV, automobiles, etc? What justifies differential pricing based on number of users? Other than the greed of software vendors.
Back in the day when you bought software, you installed it and it never changed after that point. Now most software is updated regularly for bugs and security reasons. Those updates are work for the software company and it makes sense that the end user would have to pay for that. I'm not defending that Oracle licensing though. That sounds pretty shady and desperate.
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So a bar installs a TV intending to attract more barflies and the vendor charges per barfly/hour whether the barflies are watching it or not.
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So, if I buy a truck from General Motors for my freight carrying business, I should share my profits with GM?
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Back in the day when you bought software, you installed it and it never changed after that point. Now most software is updated regularly for bugs and security reasons. Those updates are work for the software company and it makes sense that the end user would have to pay for that. I'm not defending that Oracle licensing though. That sounds pretty shady and desperate.
In the past (and even now), there was/is an annual maintenance contract with the software vendor that paid for upgrades and bug fixes. It is like buying an extended warranty for your car. My question remains: what justifies per-user pricing? PS. I brought in Oracle as an example of egregious business practices that is enabled by per-user pricing.
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I think you make a good point.
Richard MacCutchan wrote:
When you use someone's software product, in most cases it is to keep your business going.
However, if you compare this to a car, the analogy falls apart bec it would mean we would charge Uber drivers, delivery drivers, etc. more because they earn income using the product. But, still you point is a good one.
If you shoot video in a National Park -- and someone, anyone ever earns money from that video -- the National Park Service wants some of that money. It ain't right.
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No. The extended warranty would be an optional cost of acquiring the vehicle. Profits are what remain after all costs are deducted.
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So, if I buy a truck from General Motors for my freight carrying business, I should share my profits with GM?
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I think you make a good point.
Richard MacCutchan wrote:
When you use someone's software product, in most cases it is to keep your business going.
However, if you compare this to a car, the analogy falls apart bec it would mean we would charge Uber drivers, delivery drivers, etc. more because they earn income using the product. But, still you point is a good one.
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Back in the day when you bought software, you installed it and it never changed after that point. Now most software is updated regularly for bugs and security reasons. Those updates are work for the software company and it makes sense that the end user would have to pay for that. I'm not defending that Oracle licensing though. That sounds pretty shady and desperate.
Kschuler wrote:
when you bought software, you installed it and it never changed after that point.
Well in over 50 years in this industry I never worked on any software like that. The frequency of updates may not have been as often as now, but it still happened quite regularly.
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Software is a product. Much like TV, automobile, washing machine, etc. The latter are tangible while software is intangible but that is not an important difference. Once upon a time, when you bought a software, you paid one price for it, no matter how many persons in the purchaser company used it. Then they decided to charge according to the power of the processor the purchaser company used. This is like saying you have a larger living room and so the TV is higher priced. Then they decided to charge price/user. This is akin to the price of the TV or washing machine being dependent on how many persons are in the household. Now, Oracle has gone one step further and its Java licenses are based on the number of employees in the purchaser company, including janitors or messenger boys they may employ. If a customer refuses to accept the new terms, which yield hundreds of thousands if not millions of dollars more in revenue to Oracle, Oracle is threatening an audit of those companies to determine if any of the contractual terms are violated by the purchaser. Companies have sprung up to assist the purchasers in questioning the findings of these audits. What makes software different from common household goods such as TV, automobiles, etc? What justifies differential pricing based on number of users? Other than the greed of software vendors.
Vivi Chellappa wrote:
What justifies differential pricing based on number of users?
I don't agree with differential pricing when it comes to greed. But, I think scaling pricing is great if it's done ethically. It gives smaller companies a chance to play ball. But, only if done ethically and not out of greed. Dunno about this situation in particular. I will say though that greed based pricing differences have been around for a while now. Hotels, Airlines, etc. will charge you more if you buy a ticket from an affluent area, for instance. So, the greed part is nothing new it's just being expressed through software now that the tech giants have fully embraced the dark side.
Jeremy Falcon
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Back in the day when you bought software, you installed it and it never changed after that point. Now most software is updated regularly for bugs and security reasons. Those updates are work for the software company and it makes sense that the end user would have to pay for that. I'm not defending that Oracle licensing though. That sounds pretty shady and desperate.
Except now every time I turn on my TV I have to install an update... literally. And to top if off, my TV shows me ads. All for updates I never wanted for crap I don't use... just to watch TV.
Jeremy Falcon
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But the concept is analogous. Just some people give special "clearance" to certain things like tech and the medical industry. And it makes sense that we devs would consider software special. IMO it shouldn't be that way though. One could think of software like a tool. And if I buy a screwdriver as a carpenter, should I share profits then? Don't get me wrong, some profit-based models aren't always bad. For instance, some game engines are free to use until after the company makes money off the game. Which makes the barrier to entry low. If it's done ethically though and not from a place of greed. But, this day in age, everyone is all about getting recurring payments from customers. Hell, they want you to get a "subscription" when going to the car wash now. The idea of just buying something is become a relic of the past... all for greed.
Jeremy Falcon
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If you shoot video in a National Park -- and someone, anyone ever earns money from that video -- the National Park Service wants some of that money. It ain't right.
Can I get in on this? I want some of the money for watching the video. :-\
Jeremy Falcon
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In the past (and even now), there was/is an annual maintenance contract with the software vendor that paid for upgrades and bug fixes. It is like buying an extended warranty for your car. My question remains: what justifies per-user pricing? PS. I brought in Oracle as an example of egregious business practices that is enabled by per-user pricing.
Vivi Chellappa wrote:
what justifies per-user pricing?
If a school purchases text books, they need to pay for each copy that they buy, even though the content of each book is the same. What's the difference with software?
The difficult we do right away... ...the impossible takes slightly longer.
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Software is a product. Much like TV, automobile, washing machine, etc. The latter are tangible while software is intangible but that is not an important difference. Once upon a time, when you bought a software, you paid one price for it, no matter how many persons in the purchaser company used it. Then they decided to charge according to the power of the processor the purchaser company used. This is like saying you have a larger living room and so the TV is higher priced. Then they decided to charge price/user. This is akin to the price of the TV or washing machine being dependent on how many persons are in the household. Now, Oracle has gone one step further and its Java licenses are based on the number of employees in the purchaser company, including janitors or messenger boys they may employ. If a customer refuses to accept the new terms, which yield hundreds of thousands if not millions of dollars more in revenue to Oracle, Oracle is threatening an audit of those companies to determine if any of the contractual terms are violated by the purchaser. Companies have sprung up to assist the purchasers in questioning the findings of these audits. What makes software different from common household goods such as TV, automobiles, etc? What justifies differential pricing based on number of users? Other than the greed of software vendors.
Vivi Chellappa wrote:
What makes software different from common household goods such as TV, automobiles, etc?
I'd say you're not giving enough weight to the distinction between tangibles and intangibles. Tangibles have limited lifetimes; automobiles, TVs, microwave ovens, smart phones, groceries, etc., eventually need replacing, often because some folks like to have the latest 'thing'. There's an on-going market for new widgets. The sales model for tangibles is not sustainable for software over time. Once most people who need a particular software app have it, it gets harder to sell them upgrades especially as the product matures, and the market for new purchases is never as big as the initial sales. I don't know that this justifies the model nearly every software company has adopted over the last decade, but I'm pretty sure that's the reason behind it.
What justifies differential pricing based on number of users?
If you're buying wine for an evening, are you buying one bottle for you and your partner, or for a party of 50? You gots mo' people, you needs mo' wine. That's where the gap between tangibles and intangibles is negligible.
There are no solutions, only trade-offs.
- Thomas SowellA day can really slip by when you're deliberately avoiding what you're supposed to do.
- Calvin (Bill Watterson, Calvin & Hobbes)
