Why Software is Expensive | Hacker News Reader

Why Software is Expensive

itscommonsensestupid.blogspot.com

24 pointsedw51925 comments

The most important one is the last one: anything custom-made is far more expensive than something that's mass produced. Would you go into a tailor and expect them to make you a suit at the same price as you'd pay for a pre-made suit in a store?

Actually, in much of the third-world, this is not true. Hand made is cheaper than manufactured . I know it seems ass backwards, but the best examples I know are in Mexico:

1) Guy selling handmade pots (or any handmade product) -- his product is worthless. Imported electronics -- very expensive.

2) It's cheaper to have 30-50 guys using hammers and handsaws on a home construction site, than to pay for power tools.

So to the third-worlders: Hand made is cheaper.

So let me get this straight, you're comparing pottery to iPods and from that drawing a conclusion?

Hand made goods are almost never cheaper, even in Mexico. A handmade pot would cost more than a machine produced one. It's just that the cheap labor makes the production equipment an unjustifiable investment because the ROI is less. It's less cheaper, but still cheaper. In general of course.

cheap labor makes the production equipment an unjustifiable investment because the ROI is less

I think that's his/her point. The manufactured pot would need to be priced higher (to pay for the production equipment over a reasonable depreciation period) in comparison to the hand produced pot that incurs no such overhead to produce, just cheap labor. So in effect, yes, a manufactured pot would be more than a hand produced pot.

I do think the commenter confused the matter by including imported items in the argument.

Given unlimited future earnings, you are right that a manufactured product may be cheaper to produce since there's much less labor cost, but in all practicality I'm not sure it applies.

Also third point seems valid. In software any change can be made technically at any stage, at cost of work hours (that can be sometimes priced as low as 0$ in case of unpaid overtime) and the software quality. The quality is hard to quantify. You can tell apart perfect from usable from unusable, but software very rarely achieves perfect quality and usable software has fair margin from being unusable so changes rarely bring easily noticeable degradation of quality.

But changes do have cost. Developer time has to be paid one or another way eventually and degradation of quality raises maintenance and bug fixing costs. All this has to be (and is) factored in the price of the software.

On the other hand I think the first point is completely bogus. Computers are extremely cheap. Before personal computers I'd have to buy very expensive manufacturing machine to provide such value with so little work. If I had no money to start with I'd be forced to work for somebody who had capital to purchase the machine. I might never be able to afford one myself.

Actually software is extremely cheap because computers are cheap. Software that costs zero could not be possible if computers were expensive.

>Computers are extremely cheap. Before personal computers I'd >have to buy very expensive manufacturing machine to provide >such value with so little work.

That's because you not living in a third world country. In a third world country one brand new dell laptop ( not very high end one) can easily cost as much as the salary of a programmer.

In my country (that fortunately is not third world but also not the first world exactly) I can buy decent (not high end) computer for my monthly developer earnings and I consider this to be really cheap. There is no other machine so cheap that could provide me with way to produce so much value.

Cheep programmers = buy cheep PC's. You can get a lot of HW for 300$.

Edit: Ok, I understand the downvotes, but I spent a lot of time developing on HW far worse than what 300$ can buy you today.

  From dell:
  Starting Price  $269 
  Windows  
  AMD Sempron™ LE-1300 (2.3GHz, 800MHz, 512KB)
  2GB Dual Channel DDR2 SDRAM at 800MHz
  320GB4 Serial ATA Hard Drive

PS: I would still suggest 2 x 17+" monitors but those are not that expencive.

Maybe you are being downvoted for spelling cheap as cheep or maybe some programmers feel offended by your "cheap programmers" that sounds degrading. "Less affluent programmers can buy cheaper PC's" sounds better.

Actually, this is precisely what happened to me a couple years back. I was shopping for a suit, and have found a brand-name pre-made suit costing about $1000 (that's converted, I don't live in the US); then I simply crossed the street and ordered one at a tailor. I had to wait a week or so, but the cost was half the first one. (Of course, there were less expensive pre-made suits available too, but the price of the cheapest one I found was only about 15% less for than the tailor-made one.)

Software is so unbelievably cheap to mass produce. So, "custom-made" anything in software is just dumb business.

And, as your fixed costs (hardware, hosting, etc.) gets cheaper over time, but the people remain just as expensive, why do so many companies aim at "getting big", and don't really do anything about talent dilution?

You're right that software has a negligible marginal cost, but what you're forgetting is that it has high fixed costs. It takes significant time and skill to create quality software. And, since most custom software sells one unit, it's the fixed costs that matter.

Price is determined by willingness to pay, not cost. The article talks about why costs might be high. But price is determined first and from that acceptable cost levels set.

Software is expensive because people pay it.

Interesting perspective, but don't you think it takes two parties to establish a real price? If you want to pay $5 and I want to provide the service for $100, then no price is set.

To say that it's only the buyer's perspective seems to be ignoring the other side (as you correctly point out the OP did).

These are actually just wrong. Computers are dirt cheap, for instance, and most programmers who aren't working on games don't need one that costs more than $1,000 for any reason at all. In fact they shouldn't want a cutting edge one, they'd rather see how the software runs on the computers that will typically host it.

The overhead costs of starting the next Google are significantly lower than the overhead costs of starting a McDonalds.

OK, I'll bite. If a set of tests on a feature that I'm working on runs in 15 seconds instead of in 30, I'll save that 15 seconds dozens of times. The benefits of a faster computer add up fast and shilling out a few hundred extra dollars is well worth it. Luckily, my employer got that. Especially fortunate since it doesn't seem like my Z61m will be replaced anytime soon (as we aren't doing so well) and a 2GHz core-duo with 2GB of RAM is only now starting to be limiting. If he had gone for a budget option, I would be tearing my hair out by now.

Even an extra few hundred per computer is virtually nothing. You can outfit a whole 5 man shop with top of the line Dells for what a McDonalds pays for one deep fryer. My startup quite literally ran for about 6 months on what one top of the line commercial fryer costs.

software expense = development cost/customers

$200 expensive?

It's expensive by Malaysia-- a third world country-- and most third world country's standard.

... and US coders are wondering why companies are so eagerly offshoring their jobs. No tariffs or import duties on foreign-made software. Unlike produce, code doesn't even spoil in transit! (although there is evidence to believe specifications might)

Their GDP (PPP) per capita is between a third and a fourth of the US GDP per capita. That's not a third world country.

I don't know if it's considered a third world country (I don't). But $200 is not expensive in cities there.

"Third world" hasn't been meaningful since the end of the cold war. (Originally it meant the countries that were aligned with neither the Soviet Union or NATO.)

Now the fashionable terms are "developed" and "developing" (which basically mean "rich" and "poor" and so are obviously two ends of a spectrum, not clearly-defined categories).

that website he just described (without knowing details) would be done for between 70k - 500k at my company

Reply on news.ycombinator.com