Open source software only comes in one edition: awesome.

Like I said, market segmentation in software does not necessarily have to be a bad thing. Consider a hypothetical text editor that comes in two editions. The "basic" edition has features like syntax highlighting, regex search and replace, etc. The "advanced" edition has a feature that allows you to open and save files not just locally, but also via SFTP. When it was first written, the editor didn't have the SFTP feature, the author developed it because there were some users who asked for it; they weren't the majority, but the author thought the idea was nice. Instead of incorporating that feature into the one and only edition, the author decided to offer two editions: a cheaper "basic" and a more expensive "advanced" edition. It was the author's idea of placing value on the effort involved in writing the SFTP feature. The majority of users can go on happily using the "basic" edition without paying extra for it, while those who really want SFTP can pay for it.

One way of looking at this market segmentation is to say that the author was greedy and imposed an artificial limitation on one of the editions in his product. Another way of looking at it is to say that the author offers two products that satisfy different needs at different costs. If we were talking about two products from two different authors, we would be comparing their features and prices quite naturally, without complaining about market segmentation.

However, when you're offering exactly the same product, with no differences, for two different prices, then you're just being greedy and taking advantage of your customers (which is something commonplace nowadays and most people, myself included, just accept it). Close to that is the situation in which you slap a truly artificial restriction on a cheaper edition of your product, not through a lack of feature, but through a deliberate crippling of that feature (e.g. the five-dollar edition can open only up to 3 files). The exception, of course, is a crippled free edition which allows potential customers to try your product before deciding whether to buy it. In that case, you're just being annoying ;)

That, in summary, is why I believe that market segmentation is an advantage, within certain ethical bounds.

Right. For example, if a totally hypothetical individual developed a collaborative knowledge-base system and offered it as a service, they might decide to arbitrarily segment the market based on page views.

Now, one might make the argument that there is actually a cost associated with page views whereas there is not a cost with having your software recognize all the memory on a third party's machine, but just between us businessmen we can agree that that is malarky. For one, the cost of a marginal pageview is too small to be measured but the price to the customer of that page view is about ten thousand dollars in the first year if it was their millionth-and-first page view in January. For another, the cost the 9 million page views separating tier #2 of the hypothetical service from tier #1 is far, far less than the pricing differential.

http://blogs.sun.com/bmc/date/20040828#the_economics_of_soft...

Amusingly, it looks like he'll be an Oracle employee since they are now buying Sun.

(Note, this is "just business" as far as I'm concerned, i.e. about .7 on the weasel scale. What saddens me is organisations too short-sighted or misinformed to see the trap they are lumbering into as they are too distracted by salesmen with slick powerpoints, particularly if they are governments wasting my tax dollars)

I'm sick of dealing with marketing weasel feature matrices

This line would be funnier if there were an ironic marker or perhaps some indication that it was self-deprecating humor. As it is, it sort of sounds like you mean what you're saying. Which would be... interesting in light of your own business model, announced like two days ago.

http://www.stackexchange.com/

Do you really believe those extra 10 GB and 65 projects cost 37signals $50 a month to deliver to you?

No, I don't. What I said was "they offer different plans whose prices probably don't scale linearly with the costs behind them (in other words, they don't get the same profit across plans)". I acknowledged that the price is not a linear function of the costs and that they get more profit from more expensive plans. My question was "why is that evil?"

Similarly, do you really believe that the cost of supporting 48 GB of memory versus 32 GB cost Microsoft $1000 per customer to build?

I'm sorry if I sound hostile, Jeff, but I read your post before commenting on it -- did you read my comment before replying? I said that the artificial memory limitation is completely ridiculous (unless there's a valid technical reason for it). As I explicitly state in my other comments, I believe that's unethical.

Here's the summary of what I believe, a Cliffs Notes edition of my comments: Having rich customers pay more is not unethical, crippling the features of your product to extort money is.

It reminds me of the founder/maintainer of a very successful programmer's website who said, "People will not read what you write [for a web-app GUI], not matter what you write, or how you write it". His frustration was maxed out. It occurred to me that one solution is to only provide buttons (i.e. actions) for what you actually want users to do. This constrains their choices to only valid ones. This amounts to a kind of "wizard" - but they've been very successful, so this isn't a bad thing. It also obeys the "don't make me think!" imperative, provided the GUI is designed-well... It also helps if the pricing options are also designed well. In fact, I believe it is worth sacrificing profit/benefit to the customer (or other efficiencies) if by doing so, you can make the choices clearer and simpler for the customer (eg. clarity can come from obvious patterns in the pricing, even if they totally don't fit the true demographics).

To apply this to successfully communicating the limits of each pricing option, where "successfully" means that the customer hears what you say, you could have a button for each limit. By consciously selecting the limit, the user would know what it is. Unfortunately, this can lead to frustrating backtracking when one choice constrains other choices in unexpected ways. One can muck around with different orderings of the choices, but I think that ultimately, the only real solution is to make the options match what the user would expect.

That is, change your pricing model to accord with what the user expects. Not vice versa. This is a kind of "pricing positioning", where the goal isn't to sell more, but to communicate better, by associating your product with a category, and then following the standard pricing approaches for that category - whether they suit you or not. The purpose is to communicate, and doing it well makes everyone happier.

For me, it's intrinsically valuable: successful communication is a joy in itself; miscommunication is suffering.

Anyway, SSDs soon. I will not be sorry to see the back of spinning magnetic media of any stripe.

Linux distributions, and even versions of Ubuntu itself, are not organized in a "tier" layout, where Tier N has X more features than Tier N - 1, or Tier N's features have X more capacity.

Linux distros and Ubuntu versions, on the other hand, are organized horizontally: They don't have better features (per se), but different features.