Slashdot Mirror
Why are Businesses Willing to Spend More for Software?
"I recently had a the chance to bid on a contract, which I didn't win because of my estimated project cost. The winner of the bid had an estimated cost of $15,000 whereas my estimated cost was around $5,000 for the same project. The contract was not a complex project: a system comprised of database-generated web pages, with file submission and minor document management features.
I had, in about 8 hours of preliminary work, 50% of the website and associated back-end completed and had the rest of the site roughed out for what they wanted. The work is simple and I think almost anyone who has done similar types of site designs would agree with me.
The reason I got for not winning the project was that my proposed bid was seen as too low.
Does this make any kind of sense to anyone? Why would a company prefer to spend $15,000 on a project instead of $5,000."
It's not that higher prices imply quality, it's that lower prices imply shoddiness.
slashdot!=valid HTML
..and especially this time of the [fiscal] year, people are sometimes looking to spend more money so they use up their whole budget (otherwise they get less money next year).
having evaluated bids like this a lot, i'll have to put "evaluated" in quotes. you don't have time to really go in depth and really check out each bid. if you get five bids, one is for $100,000, one if for $1,000, and the other three are for $10,000, that makes it an easy first cut down to the middle 3, because obviously the 100K people are insanely out of our budget, and the 1K people are obviously missing something.
this is how most government contracts work. ignore the high bidder, ignore the low bidder, and hope for the best when you pick one of the middles at near-random. you just don't have time to be thorough when you evaluate a bunch of bids.
MORTAR COMBAT!
what do you think the Chiefs talk about when they golf with and have lunch with their friends that are Chiefs at other companies? They one-up each other with how much they spend. A company that can afford to spend more is seen as more powerful. It's the same old pissing contest, just in a different venue.
Businesses assume that the low bidder will do shoddy work, and you get what you pay for. In tangible things like building contractors, the rule of thumb proves true. Cost cutting usually is quality cutting.
The Uncoveror: It's the real news.
I would imagine most places have a budget for how much they're allowed to spend for a certain project - I know my office follows this. The upside of this is, they can't go over that spending limit. The downside is, they have no incentive to save any of that money.
Of course, the ideal thing to do for the project manager is to get the most bang one can for the money available. But what you often see instead is the project manager going for the bid that comes closest to the company's estimate for how much it would cost them to do the work themselves.
!#@%*)anks for hanging up the phone, dear.
Surely the higher prices the development firms charge act as some sort of insurance policy? If you're producing software for a large company, and it goes wrong, your development company will be sued for ALOT of money. By charging higher rates, you are not only giving across an assurance of quality, but also ensuring your own company can afford to handle it if anything goes wrong.
I suspect that for the majority past history of poorly designed 'on the cheap' products plays a serious role in these types of snap judgements.
Just the same... if your product isn't selling, and your selling it cheap - question your product (or your saleforce) - not the potential customers.
http://windows.scares.us
Possible reasons:
1) You appeared amatuerish. Cheap often *does* mean its a little bloke sitting alone in a room hacking out stuff. There no guarantee you might just get bored and fuck off.
2) Did they offer more? Putting in extra features, and charging for them, is commonplace.
3) Are you sure you actually lost on price? Was their bid of a higher quality, and you were fobbed off with the price as an excuse?
4) Did they offer support? Updates? Full IP/Copyright? Training? Sort of comes in with number 2..
Cheaper does not always mean 'the same thing at a lower price'. Theres a reason for the 'cheap and cheerful', and 'you get what you pay for' adages after all.
http://twitter.com/onion2k
Freud was asked a similar question as to why would he charge for therapy since his main focus was simply to help the patient. His reply was - to paraphrase- the therapy would not work as well because the patient needed to put something of value into it. Low or no cost software can and should work, but we will have to show a dollar value for it: Savings over current development plans might be just what the bean counters need to see.
Firstly, you assume that the client was honest with you when he told you that you lost the job because your price was too low. A lot of times clients will say that to small contractors in an attempt to avoid hurting their feelings when really, the reason is that they don't think you're good enough to do a good job, and THAT'S why you're charging too little. You have to know your market. If you went shopping for (say) a wedding ring, and some guy offered you a perfectly beautiful ring for 1/3 what they were selling elsewhere, what's the first thing you would do ? Run off and have it appraised, because YOU would be sitting there wondering what was wrong with it. Businesses are no different, except there is no appraiser for software.
There's also psychological data that shows that people tend to hold dear those things that they have invested more in. Social psychologists have demonstrated that an excellent way to increase someone's opinion of you is to get THEM to do something for YOU, and often times the more onerous the task, the higher the resulting opinion. One interpretation is that they internally conclude they must like you more, in order to explain to themselves why they would do something difficult for you. Conversely, if something comes easily, it won't be valued as much, and people know this at some level.
Your competitor is obviously smarter than you are: They know they can charge more!
My firm does Landscape Architecture, Land Planning, and Architectural Visualization. We run into the same thing all the time. Because we're much smaller and leaner, we can generally offer better service, better product, at a MUCH lower cost than larger firms.
.
The catch-22 of the whole thing is that the client will bitch about how much money you're costing them . . . then you'll hear through back channels at the end of the project that they aren't happy because they don't think they paid enough for the high quality product they got.
I've got untold colleagues in other professions who have had essentially the same experience. I think it boils down to this - people want to feel violated. There's a mindset of "if it doesn't hurt, it can't be good" . .
just2cents.
anything i tell you will cloud your opinion.
Yeah, that's not expensive, time-consuming, or illegal at all...
(It's called 'shilling' and it's a type of fraud)
"Tell me doctor, with all of your defenses, are there any provisions for an attack by killer bees?"
Maybe it's the same with software. "If it's that cheap, you couldn't have done a very good job."
Business people don't think in terms of how "hard or easy" a particular project is. It's about gaging what a potential client percieves as the value of that service. I was told by friends who have been running their own business for 20 years you have to give a high bid, but let the client know the price has room for adjustment. If you're quote is much higher, 90% of the time they will contact you to ask "why is your bid so high?". Whereas a substantially lower bid gets tossed out.
So the lesson I learned after having made the mistake is to bid high and then adjust the price later. In the end, it says two things about the service you provide:
1. your time is valuable
2. you take your profession seriously
Having a lower bid most often is precieved as "amatuer".
This question reminds me of the story about 'K Swiss' shoes in Hong Kong.
In the early 90's K Swiss was doing badly in Hong Kong and the sport shoes were pulled from the market. They did some research and relaunched as a premium brand at three times the price - with the same product.... they sold like you would not believe... they sold many times the previous number of shoes.
It is a problem. If something is too cheap - it is under-valued.... if it is priced high then its perceived value is increased. There are implications for Open Source projects here. If the product is free, is its value nothing as well?
I have had this happen to me the other way around. I bid the $15k and they took the $5k bid. The site never got built. No even close.
They told me it was a price based decision, I heard from back channels it was because the $5k bid came from a "friend".
Just remember that most sales are made based on the decision makers *feelings* about the project and about the bidders. If you never get a chance to talk to the decision maker directly about why you didn't get the contract, you can never know why he/she made that decision.
Disclosure: I am a student, not a contractor or consultant. I have worked closely with Professional Engineers and managers who have worked with as and with a variety of consultants and contractors so I have picked up a few tidbits of knowledge.
I think that expensive consultants and contractors with fancy contracts, names, etc give a sense of implied value. The businesspeople who hire them do know a lot about business but not software development, and thus cannot gauge the real value of a project in terms of a software developer's time until they either do some development themselves or get screwed over enough times by consultants.
The story below has been modified slightly to protect the innocent, but the meanings/morals in it are unchanged.
Now a certain very large company I worked for recently had hired, before I had come on board, a well known worldwide consulting firm to develop some software for them. And the end of this and with ~$20k paid to the consultants (which was at about the time I was hired,) the company I worked for was quite unhappy with the work the consultants had done. They already knew they would be unhappy about half way through the project. Although (according to my sources) the consultants had built what was asked, it was at first insanely buggy, and even after the bugs were fixed, the entire design behind it was flawed.
That is one reason why I was hired. The company had learned its lesson and redefined its criteria and constraints. Then, working as a ~$20/h university student, I built something much closer to what the company wanted and they seem to be quite pleased.
So here is the moral of the story as I see it: One main reason (but not the only reason) why companies will pay too much for software is because the don't understand software development values and what makes something easy or hard to develop. Only by getting screwed over a few times (i.e. by trial and error) will businesspeople and managers really learn how to gauge the value of software development. Until that time, they will believe that high cost == high value.
I worked for a place that did something similar. There was a hardware shop (my side) and a software shop, where the owners were the two biggest billers.
You're (mostly) smart people, fill in the blanks. Most people here have worked in the tech industry long enough to have seen plenty of crooks.
For scams the mob ain't got nothing on tech.
If I go out and charge $20/h to do consulting, I can't get any business, but if I go and charge $200/h, I can get a fair bit of businesness!
This is CRAZY!
What I get from customers is that those who charge more most have something more to deliver because they charge so much. It is the same stupidity that means a person in a three-piece well-fitting suit can open a bank account with obviously bogus ID, while a hippy with lots of good and valid ID gets the runarround.
If things look rich, then people, especially business people tend to trust them more than things that don't look rich. This is a major flaw in the only society I am familar with, North American Society.
ttyl
Farrell
CAN-CON 2019 - Ottawa's only book oriented Science Fiction Convention! October 18-20, Sheraton Hotel, Ottawa, Canada h
You'll ruin it for everybody. Just sit back, and bill the extra hours while you play quake, no one will tell, really.
___
Cogito cogito, ergo cogito sum.
Why skimp when the potential returns are so high? Case in point: our company spent 25k from Nov01 to Feb02 developing a new software product for a relatively niche market. It's so far made them over half a million, without too much of a marketing push, and can probably make twice that again before we have to consider any further development work beyond bugfixes.
Bearing that in mind, budgets on the order of 15-30 grand for even small projects (which ultimately this was) are pretty easy to justify, and quotes for smaller amounts make people worried ( and often rightly so).
-- Proud descendant of semi-nomadic cattle-herders.
In the eyes of a business (or its PHB, at least), cost is seen as directly proportional to the quality of a product.
This isn't just true in terms of software, but extends to all industries and products. Take a regular cup of coffee as an example:
You walk into a shop and pay $3.00 for a cup of coffee. You'd expect it to be a pretty decent cup of coffee, right? What if you bought a cup of coffee for $1.00? Would you expect it to be more or less good than the $3.00 cup of coffee? The majority of people would expect the $3.00 cup of coffee to be nicer than the $1.00 cup of coffee, but until they taste them both, they don't know.
If a business asks for quotes for a project, and someone is outbidding you 3:1, then they are likely to perceive your project as being underdeveloped, whether or not this is true. :-(
If a project needs to be completed within a certain timescale, it stands to reason that the company will pay over the odds, rather than going with the cheaper option and running the risk of having to pay for someone to take over a project if it goes tits-up, along with the added time that situation implies.
When I bid on a project often I come lowest because of my hourly rates. However, people are not irked because I always break down all of the costs. Typically the client will get a spreadsheet of features and their individual costs. Of course there is a padding built in, which both parties realize.
When you bid do you break everything down? Breaking it down is about two days of work depending on the size of the project.
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
It's more a lack of understanding of how people work on these things.
If they got one bid in radically below the going rate for the work they will probably think there is somthing wrong with the bid, either they are cutting corners or they are pulling a fast one. They will have already set aside a budget for teh project so it really isn't a big issue to them payin less but they will worry about the quality on a lower bid. It probably comes from a building mentality whereby if you see a builder giving yo ua low quote you will worry about the quality of teh bricks and craftsmen he has.... Unfortuantley people don't realise software doesn't work to the same mirco model....
Working for the (other) man
Randal: The expensive kind.
Leonardo snatches fuming box of Descreto Burritos from Randal
Leonardo: I must have them... ahh, exquisit!
Leonardo turns green after having taken a bite, but forces himself to take bite after bite.
I've seen this sort of behaviour all my life. I doubt it will ever change. It seems like to me though it is a lot like the ol' East/West Arms Conflict of yester-year. One great big penis envy match.
How Robert Cialdini, who has thought more about this kind of question than all of Slashdot put together, might break down the problem, according to the six principles set forth in his remarkable book "Influence, the Psychology of Persuasion":
Authority - This software comes from the acknowleged leader in the field.
Reciprocity - We want people to pay us a ton of money for our own products.
Consistency - We paid millions for our network, we're not willing to pay six figures for the software?
Social Proof - Everybody else is buying this software, there must be a reason.
Scarcity - It's the only solution in its price range, must be unique and valuable.
Liking - They have the best (paid) salesmen.
I work at a recently profitable startup, and we had a very similar experience. Initially, we had a low cost package deal that covered what our clients needed. The problem was, they all thought it was "too good". Essentially, they mistrusted it because they thought we had to be cutting corners somewhere to provide it. So, we itemized everything, doubled the prices, and all of a sudden they all wanted to buy it. Not a damn thing changed from a technical perspective, but our customers found our pricing more acceptable.
Basically, because they can't do what we do, they want to believe it is valuable. Buisness people gauge value using economic measurements, like cost. It is important to recognize this, and not undervalue your own work (you don't hear about accountants cutting prices because it's easy for them).
CYA - Cover Your Ass. Its a blame-culture thing.
Business don't see the support structure behind Open Source - without that support structure, there's no-one to lay the blame on when things go wrong (Software is always the root cause of problems from a manager's point of view). So, somehow, just having the option of turning around to IBM and give them a royal bollocking is worth the exorbitant price.
Our company has recently switched from using Netscape's IPlanet to IBM's HTTP server -- on the basis of IBM's product being much cheaper per CPU than IPlanet (and it comes with Websphere 4). Did we mention IBM's HTTP's server is basically a rebadged Apache? Yep. Did we say Apache was Open Source? Yep. "Can't use a free webserver to run a professional website."
A few months earlier we were using an out-of-date copy of JRun on the main webserver. Something didn't work. Called the support line - being a product that Allaire no longer supported, there was no valid support contract. So the co bought a few copies of the supported JRun 3.0 (hence buying a new support contract and licenses). The bug was found, in one of the JSP's - not the servlet engine itself. And we still have shrinkwrapped copies of JRun 3.0 gathering dust in the filing cabinet. And we still run JRun 2.3.2.
How's that for logic!
Well, the school i used to attend had a hack-in problem (IIS). We offered to set them up a linux-firewall using iptables with stateful inspecting and everything on it.
They declined the offer saying 'that they only trust something that costs money'.
Who will ever understand...
Business pay obscene amounts of money not just for the software, but to have someone to blame and pass the buck to when it doesn't work right.
Do not underestimate the CYA factor.
Software Wars
I've stopped (mostly) thinking about how much it will cost me to do something, and instead think of what it's worth to the company, and charge THAT rate. I don't do it to companies that I've done a lot of business with, because they already know they will get good work for a fair price.
If I feel really guilty about what I charge, I give them back enough so that I don't feel too guilty, and tell them it's a discount because of unexpected savings doing the work.
It's a fine balance to chage enough so that they know the work will be there, vs. estimating so much that I lose out. Sometimes I want to send two estimates: One for how much I think I need to make, another for how much I think it will take to be considered a player.
Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.
You: I'd like to buy that car.
Cardealer: Ok, excellent choice, that'll be 50 dollar.
You: What? Why is it so cheap? What's wrong with it?
Cardealer: Nothing, it's perfectly ok. Nothing wrong with it. First owner, has had regular checkups, handles like a dream, 50 bucks.
You: Erm thanks, I'll go somewhere else.
Be wary of any facts that confirm your opinion.
Volkswagen hadn't sold well in the US since the Beetle (the original). So they added some chrome, made them look more like luxury cars, jacked the price $10,000, and now everybody wants one. It has gotten to the point that they are considering dumping Audi and competing with BMW and MB with the VW marquee.
The masses are the crack whores of religion.
Suppose your a manager of some sort.
If you choose the lowest bidder and it doesn't work out, it's your fault.
If you choose the highest bidder and it doesn't work out, it's the contractor's fault.
And remember, it's not your money that your spending. It's budget money. And where do you, Mr. Manager, want to be at the end of the budget year?
Slightly over budget with good results. That way you get a bigger budget next year.
What's a sig?
A rough estimate that keeps getting repeated to me is that an employee costs the company 3x his salary. This includes his salary, corporate tax, rent on space, facilities, HR people to support him, benefits, managerial oversight, pension contributions, etc etc. So if you figure an average developer is getting paid $50k a year, and that is costing the company $150k in total costs, are you really saving that much money if you buy WordPerfect office suite for $500/seat instead of MS Office Professional for $1000 or $1500?
Also, capital costs (such as software) can be depreciated over time to realise tax savings for a company whereas an employee is a cost centre -- he costs the same each month and will until he leaves. Most of the new economy ideas were bunk, but the concept that the people are important is true...they end up costing the company much more long term.
Finally, say you're buying a large enterprise product like Peoplesoft or a portal or MS exhcange for 10,000 users. How many people, no matter how efficient the product is, are going to be required to support that product throughout a year? How much consulting time? Even after a $10 million web platform deployment at my company, I can comfortably say that by end-of-life that we will have paid much more in labour costs to support it than the physical or software costs in total.
John Maynard Keynes: "When the facts change, I change my mind. What do you do?"
Yes, you are cheaper, faster, and do the same job...but maybe your solution wasn't really "right".
Perhaps you *needed* to install Win2000, SQL server, and IIS--your technology was "wrong." Or perhaps you needed to have an office address, an answering service, or a listing in the Business Journal--your business status was "wrong". Or perhaps you aren't related to the company president's golf buddy--your social status was "wrong". In any of those situations, you wouldn't be given the job if you paid THEM for the privilege of doing it.
Of course, there might be the notion of perceived value at work here as well. Because you came in SO cheap, you obviously can't bring the same "level of expertise" as the "big guys". Maybe your system would "work"...but it obviously won't be a "quality solution." Maybe they're looking for someone that they can (and this is my favorite term) "partner with"
(Reminds me of the story of the street artist who was selling "bare" watercolors for $10, and starving with only 5-10 sales per week. Some kind person set him up with a small stipend to purchase frames. The story goes that he then began selling 20-50 framed prints per for $50-$100. Same art, cheap-o frames, and 10x the perceived value and appeal.)
Or, perhaps the people involved aren't spending *their own* money, and they're trying to build a little buffer against blame. If a company charging $15,000 for a $5,000 job fails, then obviously the contractor failed to deliver. If an individual charging $5,000 fails to deliver, then obviously the people that chose that individual over a higher-priced but "more capable" company are lacking in business sense.
At any rate, it doesn't matter. You're out of the running, and chances are, due to those "unstated requirements", you never would have been granted the contract. Suck it up, try again, and work on building your reputation as someone worth "partnering with". Then perhaps you'll be on the *right* side of the equation.
Management will spend large amounts of money to cover their ass. They have lots of money but only one job.
When outsourcing was a new phenom, we (a large corp where I worked) decided to outsource a billing system rather than buy a big expensive system. Big back pats for the manager who came up with this one. The corner offices were expecting to see big results so they could justify outsourcing the whole shop. Instead, the project ran out of money and died on the railroad tracks with Amtrack on the way. Next thing I know, the manager is cruising a shopping cart on the parkway with a sign saying "Will Leverage Synergy Across the Enterprise For Food".
After that, the managers spent the big dollars on software.
If you aren't part of the solution, there is good money to be made prolonging the problem
At my company [part of a global publishing company] bids are also evaluated against known metrics. They do a function point count, figure the number of hours and then budget accordingly based on staffing and timeline. They have thousands of projects cataloged and they can (based on each developers metrics) come fairly close to what we are telling them. Your bid was probably way too low compared to the # of hours that the project was expected to take. They don't want to give the project to you and have you unable to complete it becaue you bid to low. I don't care who you are the first %80 takes %20 of the time to do the last %20.
If that didn't kill your bid, mabye your elitist attitude did.
Don't get me wrong, I've seen buisness spend more money on internal development than I had ever expected, but they won't pay for simple computer upgrades for the developers..... weird.
Whether it is software development or paving the parking lot, if you've been burned in the past by going with a bid that is one-third the going rate, it is unlikely that you will go there again. Business do want to save money, but, more importantly, they must prevent damage to their operations and infrastructure. Saving $10k doesn't do you much good if you lose $20k in downtime when you have to take systems offline to fix them. That concern is a big part of the mix.
-- Slashdot: When Public Access TV Says "No"
I know it happens around here a lot. Did the company that won the bid already have the "paperwork" taken care of with the contracts department based on previous jobs? Many times it is worth $10K not to have to go through all the hoops of working with a "new" consulting company. Much like you had their website mostly "templated" out (thus your bargain rate), they could have already had the winning company "templated" out with a previous contract in place. I have done many RFP's with new companies -- and have been surprised at what it takes paperwork wise to get someone new setup. (billing, waivers, proof of insurence, conduct policies, network id's, mail accounts, etc...etc..)
(+1 Funny) only if I laugh out loud.
They care about how much it will do for them. If an app is going to make a company a million dollars a year, why not pay someone really good $10,000 even if you think you could do it in 16 hours?
Maybe it is easy, but so what? It makes absolutely no difference how easy it is to the overall value they get.
The only thing you'd need to look out for is idiot MCSEs with over-inflated egos, but beyond that, it's probably better to go with someone with more experience, a better presentation, whatever if you've got the money.
autopr0n is like, down and stuff.
Occasionally, organizations invite bidders to the table just to keep the incumbent honest or maybe they just liked your competition better.
I have helped companies secure millions of dollars in technology business and based on my experience those purchase decisions tend to follow a similar pattern.
An individual or team responsible for making the decision will pick a solution early in the purchasing process and then go into the "Switch". In this mode they become less rationale and very emotional about promoting their choice. Once they have switched, it can be very difficult to change their minds.
It usually comes down to relationship. Do you have a strong sponsor/inside coach at the client/prospect? Without the right one your batting average will be pretty low. Communication leads to trust and when people trust you, it is easier to get things done, including winning contracts.
Cheers,
Winnipenguin
X-Corporate Soldier
Sweet Sally sullied shameful Sammy's shining sig
When shit fucks up, whoever commissioned it wants to be able to use the excuse, "But, I paid good money for this!"
You can't pass the buck when there's no buck. Why do you think CTOs love MS and are scared of OS? Because you can't say that you spent top dollar unless you do spend top dollar. It divests the commissioning employer from having to be held accountable if your work sucks; if they went for your contract, the dude above him could easily say "Well, of course it fucked up, you didn't spend a shitload of money on it."
The fact that theres little correlation between price and quality has little to do with the fact that its way easier to be unaccountable for a project if you pay a premium price. Its totally backwards, but hey, so's this continent, so just think of it as being a neccessary bit of stupidity for consistancy's sake.
(BTW, this is why its so hard to break into new markets using price as a differentiator. Yet another example of how classical free market economics don't exactly model the real world. When you are a newcomer to an industry, its hard to undercut the competition using price because people don't want to be left in a situation where they have to explain to their senior manager that the reason shit fucked up was that they went for a bargain.)
"Old man yells at systemd"
because it costs less to live there. It's almost like you're paying them more in terms of psudo-'feel good' quality you get simply from paying a lot.
autopr0n is like, down and stuff.
To most business people, talking with a developer is like talking with a doctor. They don't understand the other person's black art, and they have no way to judge the person's competence, other than their standing in their professional community. And most business people treat the health of their business at least as seriously as they treat their own personal health.
So... Faced with life-saving surgery, assuming that you have the resources, would you choose the doctor who charges $5,000 or the one who charges $15,000?
To paraphrase George Carlin (?)... Somewhere out there is the world's worst doctor. And somebody has an appointment with him first thing tomorrow morning.
What probably ended up happening, is that the winning company bought the buyer. It is a very common practice. They are taken out to be smoozed at some kind of sporting event, or given tickets to a concert.
Kickbacks are a huge part of the reason that you may have lost the bid. The reason you were given was simply to "let you down easy."
The next time that you are up to bid and give them a $15k price tag that matches your competitor, you might still lose out. Then they will say something like, "What they were offering was much more robust, yadda, yadda, yadda."
Sure, it is unethical as all hell, but that is unfortunately part of doing business with many companies these days. I guarantee you that if I was the buyer that you were working with, you may well have gotten the contract. That would have depended mostly upon what you could show me in comparison to what the other company would be able to show me. I am more concerned with saving the company money, that is what my job as buyer is.
Vendors that offer me special 'tickle my ear' incentives are told, flat out, that if they wish to continue doing business with me, then they will offer me only the best product they can at the lowest price that they can.
Sorry to hear that you lost the contract. Unfortunately, some businesses have very unethical buyers and that is what hurts their bottom line more often then not.
Good luck, but also make sure that you don't put yourself above offering a special incentive to your potential clients. Of course that does mean that you will need to start padding your quotes and may still end up losing some jobs. Look on the bright side, at least those are somethings that you can write off durring tax season.
-.-
If you ignore the other uses of a tool, does that make the tool less useful, or you less useful?
Another: Wrong!
That accountablity should be part of the service agreement, not the fact that you wrote the software. I mean, if charging lots of money means you will jump when the customer said "jump", then why isn't Micorsoft look like a jack-hammer going up and down very, very fast?
ttyl
Farrell
CAN-CON 2019 - Ottawa's only book oriented Science Fiction Convention! October 18-20, Sheraton Hotel, Ottawa, Canada h
I don't pretend to understand it, but the phenomenon is real and not limited to software. OTOH, it's not universal, either; the company for which I work now seems excellent about carefully considering the merits of any purchase - be it talent, software, hardware, or what-have-you - and while they don't skimp on valuable tools & talent, they count low price as a good thing.
OK,
- B
http://www.bradheintz.com/
- updated
When a client buys a product from Company X, they buy more than just the product. They buy into Company X itself. They ask "Can we do business with these folks? Do we like them? Do we trust them? Are they our kind of people?" They go by gut instinct as much as anything else, and so you must learn this lesson in business: People buy people.
I don't care how good you think you are, it cost money to create quality. I highly doubt anyone could create a quality bug-free product like you are describing in less than a month and be fully implemented, FULLY TESTED (everyone forgets about test!) and determined ~bug free and ready for release to consumer(s).
... let alone just for functionallity). Right there you are in for about $4000.00 in just labor for one person.
The amount of time spent on testing should be at least as much as the time spent on design and implementation if not more!
If you want to release a product that is ready for consumer consumption you cant just slap some code together and expect a Microsoft quality (subjective) product.
Database design (even simple) and web development (at least what you are describing) should take no less than a month for design work (a week for layout and design/prototyping), implementation (1 week to implement final design), and test (2 weeks... including different environments, browsers,
And we haven't said anything about the document management piece. Are we talking just file storage? version control? access control?
I would say $15000 is closer to the mark depending on the complexity but in my opinion that's even a little low.
Ascalante: Your bride is over 3,000 years old.
Kull: She told me she was 19!
A lot of contractors, especially government ones, have to spend their entire budget or face having it cut when the contract comes up for renewal. I've seen this stupid behaviour in the military and large companies. It can sometimes be a prestige issue since you raise your "importance" by controlling bigger projects and assets.
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
Actualy, Freud probably just wanted money to buy more blow. He just didn't want to admit it.
autopr0n is like, down and stuff.
In my experience the big corporations don't want to pay $500 or $2500 for software because they're going to want some hand-holding, repeated site visits for training and troubleshooting--a lot of extra time above and beyond cranking out the code. They may not come out and say it, but they know you can't afford to do much hand-holding at those prices.
In a way you could say the $500 bid is for shoddy work, but they look at it more as paying $500 for a raw pile of bits that they can't use without some bright geek hanging around for comfort. Or fine-tuning.
It works best if you have two expensive products that work together then you point your fingers at both vendors at once. With two or more gratuitously expensive contracts/software a PHB can race to to the a pay raise on the next job or retirment while the vendors publicly fight, their superiors none the wiser.
If a PHB has a dozen contracts to blame he dosn't even have to try.
Inteligent, capible business people seem to turn into uneducated newbies as soon as a CUm-peU-Tor is mentioned. "Snake oil 3.0 here, get your snake oil 3.0"
Time and experience and open source will fix industry lies, but perhaps you should think of a hiring a salesman to pitch for you in the meantime.
Novel theory: Modern Man evolved from psychopath
This is a phenomenon documented in economics. Means pretty much what you think it means. Particularly in fields where value is difficult to measure objectively, the maxim "you get what you pay for" wins out over "caveat emptor."
If your bitterest enemies are people who hack the heads off civilians, then I would say you're doing something right.
"Nobody every got fired for buying IBM."
Now that same philosophy has simply changed slightly. Just replace IBM with Oracle, or Microsoft.
The truth is more important than the facts.
-Frank Lloyd Wright
I believe that is the term you are looking for..
There have been a lot of responses to this from people saying that the reason this guy's bid was rejected was probably because he was amateurish or wasn't good enough, or couldn't offer support, or whatever.
At my company, we have an approach to business that is unfortunately rare in the IT industry. We are honest with our clients. We think it is better business to get a client and keep them for ten years than to make a fast buck on a single contract.
This approach has cost us business in the past (but also is good long term - we have an extremely high client retention rate). But one thing is for sure, when we have lost a client because of this approach it has always been because the client doesn't know what they are doing.
Example. About six months ago we bid for a job against several other companies, incuding an IBM shop. We spent a long time listening to the client and finding out exactly what they needed, and then wrote a proposal which fulfilled their requirements along with an honest costing of the work involved. The IBM shop gave them an off-the-shelf proposal that was actually completely inappropriate for their requirements, and was costed at about five times what we quoted, and was the highest bid.
IBM won. When I quized the CIO (a clueless PHB) about why they chose the IBM shop, it had nothing to do with the contents of their proposal at all. The CIO didn't understand it. He went for their bid just because it was IBM.
Second example. A client approached us and wanted two different web sites created for promotions. Again, we did a proposal, and said that their web hosting requirements would be adequately covered by one of the standard packages from a company like Verio. The competiting proposal contained costing for buying and installation of in-house web servers, as well as an upgrade of the company's network connection to support the site. This meant that their bid was twice as high as ours, had a very high on-going cost, would cause them loads of hassel, had implications for their network security etc. etc. However, they couldn't believe that a $40 a month hosting package could possibly do what they required, when the competing company was saying that they needed to spend tens of thousands dollars on hosting. Again, the main issue was that they didn't have the internal experience or knowledge to assess the proposals.
We almost lost it because of the hosting issue. I persuaded the company that the best way ahead was for them to give us half the job, and the competing company the other half.
With the hosted web site, they have never had any problems. It's always up, and it does the job. Their internal web server has caused them loads of headaches and expense which I'm sure you can imagine.
Because we won their confidence, this company now gives us all their IT development work, and we practically write their IT strategy for them.
Sometimes, when a CIO accepts the highest bid, it is because he doesn't know what he is doing and feels safest with the highest bid.
This is a common situation across industries.
Companyes generally have an idea what the cost will be any quotes that differ widely are thrown out. This is a common thing, why is this person so much higher or lower then the competition.
Lets say you are looking for a "loaded computer", you expect with all the toys for it to cost about $1k. You skim some adds, you see a few for around $1k, you see one for $4k, you see one for $300.
I don't think you'd hesitate long to think that the $300 is a cheap one cutting many corners, even if the specs are the same, you would be wary of purchasing it.
It's a bit of a game, yes, but generally it goes like this: look at the value of your services, and look at the class of your customer. You can't ignore that different customers require different levels of service.
There are three balancing points you need to look at when setting a price for goods or services:
a) what's it worth to them (1 customer)
b) how much are you worth relative to your peers in ways that MATTER to your customer
c) what's the benchmarked rate for this class of service
Sales skills involve convicing your customer of your estimates for (A) and (B), and also keeping (C) in mind as you haggle. You'll need a "benchmarked" rate such as those at RealRates to keep your feet on the ground.
Notice how the stock market uses a stock ticker listing the last bid/offer prices for issues? That's because people need a benchmark to know what others are charging, what tactics to use, what the trend is, etc.
It's not so simple that "companies buy outrageously priced services and products". What's outrageous to one person is acceptable to another, because DIFFERENT customers have DIFFERENT needs, many of which are intangible. You can't purely quantify price on technical quality alone, though that's a major factor.
A perfect example: J2EE servers tend to be fairly costly, compared to jBoss (free). This is the subject of many a flamewar: why do people keep spending the $$ on IBM WebSphere or BEA WebLogic? There are a lot of people that are certain of the imminent world triumph of jBoss, but I'm not so sure (even though it's a solid product). There are a LOT of intangibles that go on when purchasing a mission-critical product. To keep this brief, I'll focus on one: TRUST.
Do you (as a Manager Director or VP of a company, responsible for the company's performance) trust the jBoss team? Do deliver quality, to continue making improvements, etc? It's an open source team without identifiable faces... so you try to find a face... and the leader, Marc Fleury is often associated with it. So when you say "do you trust jBoss", it's really a question of, "do you trust Marc Fleury?".
Alternatively, do you trust BEA? The owners of Tuxedo which has a reputation for reliability & scalability, and with a suppport staff that is always in the message boards helping people out, with major accounts among your peers, with guaranteed 24x7 support if need be, etc.
Similarily for Linux, it originally was do you trust Linus Torvalds and Alan Cox -- but is increasingly "do you trust IBM and RedHat and Oracle?"
Many people think "I don't trust those suits" when judging mySQL vs. Oracle vs. PostgreSQL, or [insert pissing contest here], but that's because you're not a suit. Suits trust other suits, sometimes for better, sometimes for worse. They'll pay around the rate their peers are.
-Stu
As an IT consultant I ran into the same thing.. If you underbid you are instantly thrown out. Now, if you underbid by a smaller amount and include with the bid a nice 1 sheeter explaining your advanced cost saving and increased performance that results in savings for the customer.... then you win. First thing you really need to learn... YOU MUST MARKET YOURSELF. Yes, you have to do the underhanded, shoddy,crappy world of marketing... build up to amazing perportions things that dont matter, and border-line lie about features. Example: "we save you money by diversifying the liability of the Intellectual Property rights by drawing from the massive pool of experts available around the world and include their tried and true expert knowlege to your project!" Translation: we use GPL code.
this is what you need. Market yourself and your bid.. SOMEONE is reading them and if you look professional (you sent your bid by overnight or had deliverey service right? and you had it in a $5.00-$6.00 linen folder with foil printing? the papers inside were printed in full color on 25 ound stock linen paper with watermark? your bid package had better cost you about $20.00 and look like it came from a place like ENRON or Texas Instruments.. remember you need to look damn good.)
It's all marketing... and that is the cool part, Us freelance guys that know it... we get the jobs without even worrying about the other 20 guys bidding.
Do not look at laser with remaining good eye.
...but it costs $50 000.
You are using the term "cognitive dissonance" incorrectly.
The idea is that people want to have a consistent view of themselves. They want to believe that they are rational or whatever. So, whenever something happens that they wouldn't normally expect themselves to do, they change their ideas about themselves. The reason they do this is (theoretically) to avoid cognitive dissonance. It is believed that cognitive dissonance is actually a physically uncomfortable condition or emotion.
So an example would be if, for example, you helped a girl with her car, you might think she was better looking then if you hadn't.
"cognitive dissonance" does not refer to the conclusion you draw, nor the theory.
---
The other odd thing is that tmark even brought it up at all. Is he saying the manager or whoever took a social psych class and wants to pay people more because he believes that if he pays more money, then people are going to work harder for him and thus like him more? Does he want to pay people more so that he can manipulate his own emotions and make himself like the contractor more?
Either way, it's a pretty bizarre conclusion.
autopr0n is like, down and stuff.
Same situation at my company, and it frustrates me to no end. I've suggested using OS tools since I got here, and instead they come in here and plop a 3K copy of JBuilder on my desk! I still use ant and gvim.
I've asked many times, "Why are we paying obscene ammounts of money for shitty software (ahem... BEA WebLogic) when we could get something equilivalent and better for peanuts. They always say...
1. Someone to blame when things go wrong, you can't sue OS developers, they don't have any money. (Do they ever sue these vendors? Nope.)
2. Support, you can always call their support number, what are you going to do with OS software? (Yea, i know how crazy this sounds, and I've tried to explain, but they think those monkeys on the teir 1 support are worth paying 15K a year for)
Same goes for hardware in my company, they just bought 2 50K sun machines which perform about as well as 15K worth of linux boxes.
I've tried to get through to them, but the PHBs do not listen to their technical staff when making these kind of decisions. This, I believe, is the main reason for this problem.
Troy
I wonder if this affects jobs as well.
I found that if I charge more money for a job than I think it's worth (and then maybe negotiate down to what I wanted to get anyway), I'm more successful. I mean: more successful than just lower my price right from the start.
It seems to me that companies look more closer at a project/employee if the cost is higher. So it's never a good thing to ask for low wages. Psychology. They'll think that you think you are worth it and will have a closer look. If you don't do this, nobody will believe that you are better than what you asked for.
Seems to apply to project costs as well.
Any experiences with this?
42. Easy. What is 32 + 8 + 2?
I found out some guy I know wants to get into the IT consulting gig. He's charging $35 an hour.
First thing I said to my wife?
"$35 an hour? He must not be any good. That's what the Staples guy charges. If I was going it alone, it'd be at least $200 per hour."
A bit hyperbolic maybe. But I think undercharging also betrays a lack of self-confidence, among other things.
A lack of self-confidence implies you aren't sure you can really do it. Nobody's going to pay for some wank who isn't sure he can do what you are paying him to do.
obviously no deficiencies vs. no obvious deficiencies
Business Expenses = Tax Deductions
Exactly. They're buying your work but they're also buying your "buy-in." They want to know you won't have a higher-priority project interfering with theirs, and they do that by paying you enough to not have to go looking for the next project right away.
It's been my experience over the last two-three years that price does not matter in bidding for a project. What matters is your ability to convince the client that you're competent, easy to work with, trustworthy, and able to give him the best overall service along with a quality application. You have to SELL your product, and yourself, and frankly, most programmers SUCK at sales. The process is analogous to us techy types paying more for an nVidia card with equal or slightly less performance, simply because nVidia has better drivers and better support for more platforms. I have never won a bid where i am the lowest priced bidder. It's just not important - what's the point - finish the project, or spend the least amount of money? In most cases, finishing the project is all that matters.
$45 per U Colocation Special
In the sales industry they refer to this as being column fodder. You are merely there to bid so they can put your bid in a spreadsheet and show why they shouldn't choose you. A lot of times if you don't have contacts on the inside of the target organization then you will be doomed from the start, merely used to show that they made an "informed decision" by investigating alternatives. Sales are deteremined by not just price, but perceived value and they will go with the company they know. Get inside contacts that have influence over the decision to make the sale.
It's not at all uncommon for contractors to provide clients with unrealistic estimates for schedule and cost, either because they're inexperienced at estimating software development project schedules, or, worse, because they know they can provide an unrealistically low bid to win the contract and make up the difference (and some!) with time and material charges when the project inevitably takes longer to deliver than they estimated. Either way, the client is going to avoid options they percieve as risky.
Unfortunately, the poster has a few things working against him in competing for this contract. There are many honest but inexperienced software professionals working today. Also, there are a lot of real creeps out there selling professional services by bidding low and then bleeding the clients dry once they've commited to a project.
The client's gut reaction to the pricing is surely based on its prior experience with software development contractors that have successfully delivered for them (or on what their own team could have done before they laid them all off). It's quite possible that the poster is much more capable than those contractors. Still, convincing the client that his bid is not naively optimistic or an intentional low-ball will be very tough.
and I've rarely chosen the lowest price bid; money is never the sole criterion for awarding a project.
Here's an example : we were evaluating an e-commerce solution. I worked with the internal developers to get a feel for what the technical impact of the solution would be, what the interfaces back to the main system would involve, the sort of performance and scaling issues we would expect etc. All these issues were made clear to the companies bidding for the work.
I asked the vendors to address these issues in their proposals, and outline their ideas for how to deal with them, together with rough time estimates.
Anyone who came back with nothing more than a price (and yes, that happened with a couple of vendors) got put aside : if you're bidding for a job without understanding it, we're both going to end up in trouble. Any vendor who didn't demonstrate at least a basic understanding of the requirements in their proposal and did not submit meaningful estimates was asked to go back and think about it again.
In the end, we chose a solution that fell in the upper quartile of the price range; we spent a lot of time talking to the vendor, and everyone knew what the other was expecting.
What does this boil down to ? Yes, there are some PHB types who behave irrationally in the vendor selection process. There are also those who know from experience that a partnership has to be win-win. You have to make enough money on the job to be able to do it well, and help us out when the unexpected happens without having to renegotiate. We need to get a quality deliverable from you, and give you enough information up front to make a reasonable guess at how much time it's gonna take you. If you don't demonstrate you fully understand the requirement, and show how come you can do it for the price you quote, I'm going to assume you haven't thought it through, and are going to run into trouble delivering the job.
It's all very well in practice, but it will never work in theory.
But look at accountability in another light.
If a company is charging top dollar for their product, _regardless_ of whether or not it's the best product on the market, they are percieved as having the financial backing to settle in litigation should their product fail to meet the requirements of the contract. Little companies just don't have enough cash to go after in the case where their product causes your company to shut down for a few days due to a bug.
I think part of this is the difference between the way geeks view software vs. clients. When a geek gets software with source, he has the finished product, and if it works OK and is reasonably well written, he is satisfied. The non-geek is going to need somebody around who can take care of problems and enhancements, ideally the author.
So, non-geeks like to procure software from people they know are going to be around later. A geek doesn't give a rats ass if you fell off the end of the Earth tommorow, so long as he has source. A non-geek wants to know that you have a sustainable business. It looks like you lost because your lack of business savvy showed too obviously.
Probably the number one problem I've seen is that geeks often don't do a good job of including cost of sales and overhead in their estimates. Look at it this way. Suppose you wanted to tkae home about 60K$ per year out of your business. Suppose you run this out of your home, so your overhead is very low (good for you). Your only expense is say $50 a month for internet connectivity. Suppose your computers, consumables, wear and tear on your car and everything amount to $1500 per year. You need to gross $62100. But, you want to take vacations; say two weeks a year, plus miscellaneous sick time and what not. Figure that you must make $62,100 over 48 weeks, which amounts to very roughly $1300 per week. Furthermore, you can only count on having work for three out of five days, so you need to bill 433 per day. I look at the project and running it through the handwaving machine it looks like about ten days of work, or 4330, so I round it up to an even 5000 or 11 1/2 days. Piece of cake, right?
Except it's taken you a week of meeting with the client, writing, revising, and meeting with the client again. So, while you've estimated for 10 days, quoted for 11 1/2 days, you actually use fifteen days on the project; 1/3 of the time has been spent on sales costs. You have a target of being paid 433 for each day of work, thought you was going to be paid 500 for each day of work, and ended up being paid 333 per day of work, counting the effort to sell. If you bid all your projects this way, you are going to be making less than $46K, rather than the target of $60K. Plus you have all the hassles of having your own business. If you were making less than $46K somebody comes along and offers you $50K to be a clock punching 9-5 employee, just to code with no responsibility for sales or accounting or that other stuff, what would you do?
And, in fact, this assumes you win all your bids like this. The fact is, you have to pay yourself whether you win or lose. If you win half your bids, then you have to essentially double your estimate for how much to include to cover your proposal writing time in every estimate.
Of course the customers don't necessarily go through this, but they can sense when somebody is not making realistic bids. The smaller the project, the higher a fraction cost of sales will be of the total labor costs. This means there are project sizes below which it makes no financial sense to bid, unless you can simply dash off a boilerplate proposal. If you spent more than two or three hours and came up with a bid of $5000, then any sensible businessman realizes you are not going to be paying yourself much. The only people who hire you would be people who are financially unsophisticated or don't care if you decide to close up shop and get a regular job.
The more overhead you have, the higher the minimum practical project becomes. I work with a geek who simply finds it impossible to spend less than three days on any proposal. This means that for him he cannot efficiently bid on a project smaller than $15,000 (we have an office, leased line internet, office manager, accountants, phone lines etc.)
One way to handle this is to try to find ways of making the $5000 project into a $15000 project. You can simply pad the project with $10,000 of fluff, but this goes against most geeks' sensibilities. One thing we do is to offer our clients a "General Services Agreement." We say right up front that it isn't worth our while to bid on a $5000 project, but over the course of the year we know that there will be numerous small jobs that will add up. So, we will bill up to $5000 for the immediate job, and include $10000 of unspecified work to be done in the future. This allows us over the next year to do a day of work here and there, or even the occasional hour, without going through the rigamarole of bidding and contracting. The client just picks up the phone and tells us what needs to be done and we do it, unless it is going to take over a thousand dollars in which case we give him a written estimate. If it turns out that they don't want this service, they only pay $5000 (and we lose out big time). But once they have the contract in hand, and find out they can call us out on a one or two our job, then they always do use it.
This kind of agreement helps because the client knows that (1) we are planning to stick around and (2) they will not only be taken care of, they can get common day to day hassles taken care of quickly without fuss.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
Well, let's take a look at the economics of this:
Okay, so you go and buy a Lexus. It costs ~$45,000. You could've bought a Toyota with all of the options for ~$35,000, but you didn't. Why? Two possible reasons are obvious;
1) Cachet: Owning a Lexus vs. a Toyota gives the owner cachet. It says "I can afford this." This essentially boils down to brand recognition.
2) There are a lot of perks with owning a Lexus instead of a Toyota. Better valet handling. Better dealership experience. Better service.
Despite the fact that the two cars are almost completely identical.
The same thing applies with software and big companies. One of the reasons that Linux has taken so long to get fully accepted by the corporate community was that it is free. It also has almost no support.
There are other things associated with this phenomenon that are purely political. Every department has a budget. Next quarter's budget is based on what you used this quarter. If you have $150,000 left at the end of the quarter, you didn't need it this quarter, what do you need it for next quarter? If you don't use it, you lose it. To get it back, you have to put together a use case statement to justify the increase in budget for next quarter. Big hassle. It's easier to spend it all this quarter.
Another thing: Department Managers are also looking out for their future. Most managers are referenced by how much money they manage, and the size of the team they command. For example: Joe worked for X Company where he managed a IT department with a $5,000,000 quarterly budget. This is especially true when the manager is a climber, looking to work for the next big company with more responsibility. Money = Responsibility. It's a lot harder to make the case that the reason you had a smaller team and a smaller budget is because you can do the same job w/less money, not becausse you can't be trusted w/ a large team and a large amount of money.
The Dopester
"Yes, I'm a Karma Whore, but I'm doing it to pay my way through school."
> cost is seen as directly proportional to the quality of a product...
The truth of this statement depends on how you define 'quality', but in the vast majority of real-life situations, it holds true.
Not really.. Sure a BMW that costs twice as much
is better than a Ford, but the BMW does not cost
twice as much to manufacture.
BMW conciously set their prices higher to make their product more "exclusive".
That's what people are paying for: not the better quality, but to be a member of the "BMW owners club".
Then, for the second iteration we went to java and built a much more sophisticated, interactve app. The brass loved that even more.
They decided it was really worth doing and therefore they must spend money on it. They initiated the monstrous government procurement process. It took some eight months or more, but finally a coalition team with Oracle and IBM and others won the $35 million contract.
After much hoo-ha, meetings, requirements gathering, countless billable hours, and the generation of untold linear yards of documentation, they finally decided to build something quite similar to our first prototype. And, after several years of work, with a team of dozens of contractors, that's what they have.
It's like the management said, "We love this, therefore we must spend millions of dollars to have it be exactly the same." But surely some assistant director's budget doubled, thus increasing their dominion, and people got to put on their resume that they oversaw a $35M contract. I'm sure everyone got awards and promotions for successfully disposing of all those unwanted taxpayer dollars.
Sigh. No I'm not bitter, I swear. :-)
Light cup, beer drink, thin so chain, neck turtle fat, man I won't say it again
You may not be taking into account the 'whole package' your competitor was offering. They may have allocated ~$5k worth of programming, but probably added $5k for 24/7 customer support availability and $5k to install the app on a server farm with redunant systems and uptime guarantees. They probably also had some sort of legal guarantee of having the project completed by X date (make no mistake, these things cost money!). Or, it may be that your competitor is simply a larger company, with more resources (honestly, more people to answer the phone in case the client calls), and therefore has a larger overhead to support than you. From the perspective of a small business, these things don't make much sense; why pay so much more money for guarantees on X, Y, and Z when it's just cheaper to take the risk? The thing is, for larger companies, it isn't cheaper to take the risk. Riding on any one given product or service a larger company buys there could be hundreds or thousands of billable hours or thousands of dollars of product waiting to go out the door. If a software product or custom app doesn't function right, it could easily cost a company thousands upon thousands of dollars in lost sales, lost productivity, or lost efficiency. Therefore, spending an extra $10,000 on an app that comes with some guarantees can be (and is) viewed as cheap insurance. It means a lot to larger companies to have someone they can call 24/7 if the app borks in the middle of the night. This is a large part of the reason why a lot of companies went with M$ and Sun for corporate IT servers, and why Linux is harder for them to adopt (I know RH and the like offer 24/7 tech support, but there's still a perception among some officers that it's a largely 'unsupported' platform). Think about it, as an IT director for a $80M company, how long do you think you'd get to keep your job if the email server stopped routing mail, and you had to tell the board of directors that you'd submitted a question to some newsgroups, and you hope to hear back soon. Ok, that's an exaggerated picture, but not far from what IT directors consider when choosing software. They simply don't want, in the case that something does go wrong, to have to tell their bosses that they don't have anywhere to turn to in order to rectify the situation. Therefore, they tend to favor larger, (hence, more expensive) well established software companies who have a plan for some sort of permanence, and factor that into their costs.
Need a simple, easy to use data tier generator? http://www.gryphinsoftware.com/
As a software/web/database developer working for a small company, I've done tons of random projects ranging from under 1k up to where I personally billed 6 figures. One interesting tidbit I've noticed is that in some places, due to 'company policy', for any project over a certain dollar amount (for instance, with a county gov't agency, it was 5,000), they were required to go to bid. Our bids typically are higher then some, but lower then others, but of course, all this was a mere formality. We were getting the contract because we'd done work for them in the past, done service and support for free over a period of years, and they felt comfortable with our work.
By the same token, we'd also had to work with other development teams that were completely inept. However, the upper management of the client was practically 'in bed' with the other consulting company, so they billed out close to 400,000 even though I did a majority of the work, and the other developers were learning as they went along (or asking me to explain how to do things!).
Having seen both sides of the spectrum on this, a person has to always keep in mind that business politics can take precedence at the end of the day, regardless of dollar figures.
-- If you can't laugh at yourself, someone else will do it for you.
Quite some time ago now a company a friend worked for needed a small system writing. It was a mid-sized company, still 10's of $millions turnover.
:)
I wrote a demo, spec, etc. and put a bid in. They thought it was good so I had a meeting with the IT Director. He was happy with what I was planning but he questioned how much I was charging - at the time I thought it was a bit expensive, however, I was shocked when he said he thought it was too low! In fact I ended up charging 400% of my original estimate! They paid up, I was happy
Why, I don't know. Maybe my outsourced development was making their in house development and IT work seem overly expensive. Happy to take the wonga though.
In the eyes of a business (or its PHB [dilbert.com], at least), cost is seen as directly proportional to the quality of a product. This isn't just true in terms of software, but extends to all industries and products.
I agree but don't fully understand why people often default on the expensive==good mentality. One idea is that it is somehow genetically encoded into most people. How differently do people view technology from food or mates? Is the same logic used in choosing software as is used in choosing animals at a market? In other words, if it looks good and is presented well, then there must be less risk involved in choosing it, and less risk can be associated with an increased chance of mating and passing on one's genes. The aspects of human behavior driven by mating are some of the most stubborn and tend to drive people towards otherwise-irrational decisions.
Healthcare article at Kuro5hin
Because you don't understand, you're posting anonymously on Slashdot supporting the "loser" instead of explaining how he should win.
Maybe instead of insisting on how right you guys are, you should listen to some of the people here explaining how to win the projects.
You're missing the point of I.C. Nobody is interested in paying you to sit around in unclean clothes jerking off. They like to work with people that come off professionally.
You can't sit on slashdot and complain about how unfair it is and how stupid all the people that control the money are, or you can understand how to succeed. Hopefully the poster is learning, maybe one day you will too.
Alex
You walk into a store, and you need the best pair of work boots available. This is an important pair of boots because you will have to wear them for two straight years and nothing else.
Also, let's assume you know nothing about the quality of different brands, etc.
You see 4 boots each priced as follows: $25, $35, $50, $100. Which pair do you choose?
Most would choose the $100 pair. It is most likely to have the highest quality. You would only choose a different pair if you knew what to look for in a quality pair of boots. I would guess companies don't know what to look for thereby choosing the safest option.
I don't know if this is incidental to Georgia or to the construction industry, though.
Need a Linux consultant in New Orleans?
There is more to it than just cost of software. Here are just a few.
Supportability: Which one requires more people time to maintain? How much training is needed? People cost adds up quickly.
Vendor Support: A large company will spend more on software if they feel they will get better support. If you can't reach someone at 2:00am and your system is down, being cheap is being stupid.
Life span: They will also look at the long term feasibility of the solution. If a cheaper solution can't be easily upgraded, most companies will shy away from it.
Vendor reputation: A cheaper, smaller vendor can face problems simply because they are smaller. A big business doesn't like the idea of giving a small company money if they won't be in business for the long hall.
Existing contracts: If you deal with a new company, the lawyers will become involved. This is added cost. If you are already dealing with a company, it can be much easier to change an existing contract.
Integration: Which solution fits better into an existing infrastructure?
Return business: Large companies sometimes agree to "return the favor" in exchange for a large contract. For example, a software company bidding for a telecom contract, may agree to switch to that telecom in agreement for winning the contract. I don't know how ethical it is, but it happens. When IBM sold it's Advantis network to AT&T, AT&T agreed to outsource some of it's operations to IBM's Global Services division.
Techie preference: This often is important to the bosses, but a smart business will ask the people using the solution which one they prefer. IMHO, nothing kills a project quicker than having the users say "we hate this."
They become unsure of how well the bidder understands the scope of work
They fear looking bad because they over-estimated the cost. The project in question may include aspects beyond what that particular bid includes, which may have been starved to cover the costs of this element.
In the example of spending an extra $10k-- their expectations (the level of interaction they will play in the ongoing development) might be high enough to warrant the additional expense.
Also, if there are multiple bids, common practice is to throw out low and high bids and work from the remaining. Ultimately, it is foolish to expect price alone to be the determining factor.
People don't understand the software. Thus, they pay more in hopes that they'll get a better product. And this isn't just limited to neophytes. Most people do it all the time. For example, say you go to buy a cellphone. Most people don't read reviews of the different cell-phone models before they buy. So what do they do? Do they buy the cheapest model there? Of course not. They'll usually pony up an extra $30-$40 bucks in hopes the get a "good" one.
A deep unwavering belief is a sure sign you're missing something...
Bah! Mating has nothing to do with it! It's all of those RPGs we've been playing for the last 30 years! Where the more expensive something is, the better it is. You KNOW that if you step into a shop, and that rusted out helmet costs 25,000gp, but the shining gold and platinum helmet next to it costs 125gp, the rusted Helmet is a mystic artifact that is WAAAAY better than the shiny one! So of course, everyone now knows that the more expensive something is the better it is!
Kintanon
Vide Game Slave
Check out JoshJitsu.info for Brazilian Ji
$200 per hour consultants -- guys on standards committees driving Excursions whose weblogs are actually _READ_ -- are perceived as writing better code than us $20 per hour pissants.
.4 better in the quarter mile, and costs thousands less. But the Audi is perceived by most car buffs, myself included, as the better car. Why? There's less plastic on the inside. The leather is nicer. The engine is quieter while idling and louder at full boost. The doors shut with a delightful muted crunch, rather than the slam effect of the Subaru. And the controls are much more intuitive...
End result? Well, both applications look the same and feature set, but the latter should have fewer bugs, be more reliable, and a cleaner interface. The two are nowhere near the same end product.
Think of the this like a car sale. The Audi S4 quattro is an all wheel drive car burning 240 hp. The Subaru WRX is a lighter all wheel drive car burning 227 hp, gets about
I run into the same thing all the time where I work. I'm the $20 jr, working with some "past their prime" fellas. When I do something, there's a good chance it'll be fast and great, and an equal chance it'll be buggy and not work. I jump for the brass ring and have been known to bit off more than I can chew. My expensive peers always aim low, take their time, overestimate, take lunch rather than caffeine it: and the result is, their stuff passes QA while mine languishes.
Not all the high bidding is "perception of value." Some of it is insurance of value.
Hey freaks: now you're ju
Spec out a decent project:
You figure it will take 5 people 6 months at an average of $75,000/year each. (3 Exp. Developers, 1 archetect/team lead and 1 tranee/intern/junior developer).
((75k/2) * 5) = $187,500 salary
187,500 + ~10% markup for profit = $206,250.
And that's conservative. This is just based on what the people I know (and I know a few) demand to work full-time. If you throw contractors into the mix the average yearly salary can jump well over 100,000/developer.
If anybody bids lower than that for a contract with me on a 6 month contract then I know they are either full of it or they are using developers that will, sooner or later, quit for a better paying job.
My $0.02 will always be worth more than your â0.02, so
BMW conciously set their prices higher to make their product more "exclusive".
That's what people are paying for: not the better quality, but to be a member of the "BMW owners club".
The college I went to did just this - they raised their tuition, not because they needed too, but because their competitors were pricier, and they did not want to be perceived as a lesser quality institution.
BTW, they found something to do with the extra money.
-josh
so 5k is around 5 days work at our rates you have to design the site get Signoff develop the site - then re-doing it when the customer says oh but i want it to work like that(usualy in bizare and stupid ways)
you have to cover the cost of moving from your development enbironment to the eval box and then on the the live.
You do have separte dev/eval/live dont you.
Oh and I forget testing/acessability
Paul Everitt (Zope/Digital Creations) spoke in Colorado about 2 years ago at a Linux conference. Zope Corporations was preparing to bid on a large contract for a national news organization, and they ran their proposal past one of the board members who was a VC and familiar with the market and with Zope Corp's abilities. He told them it was all fine but they needed to double their bid price in order to be taken seriously. Paul told him they would be making a nice profit at the bid price they had settled on, and the VC told him that they would never get the contract if they didn't double their bid price, because the client wouldn't take them seriously. They doubled the bid price and still came in under all almost all the other bidders and got the contract.
this is getting old and so are you
blog
Your price was too low, which meant to the customer that either you weren't paying enough attention to their problem or that you weren't going to give them a novel or complete solution. It's like if you are walking on the street and somebody offers you a Rolex for a hundred dollars. Sure it might be real, odds are its a fake.
Five thousand dollars for any complete solution in any case is still probably too low a bid because almost certainly you aren't accounting for maintenance and phone calls and problems you don't expect. Take whatever your bid is, tripple it and then you should be fine.
Beware the wood elf!!!
I was with a company where they paid big money to a consultant who came in and told us we had to adopt practices that had been abandoned less than a year ago. We could have told them the same stuff for just the cost of our regular salary, but we weren't charging them $100,000 for a month's work.
If you're too cheap, you're going to look to them like a cowboy. Pure and simple.
And if you look to them like a cowboy, they won't hire you. They'll go for someone who's charging more like what they think the job's worth.
You do get what you pay for.
"Information wants to be paid"
One day, I was speaking candidly with my boss about the possibilities of using Red Hat for various server tasks. He never took linux seriously, but had been hearing more and more rumors in recent times, that its "getting big".
In our discussion, he still wasn't listening with a serious attitude... until he asked if we could buy it... and when I said "yes", then the lightbulb went off in his simple little mind. He repeated with, "You mean, they have pricing and licenses?" I replied "YES", just to make him happy... and with that freshly learned knowledge, he now takes Red Hat seriously.
Skiers and Riders -- http://www.snowjournal.com
It is frequently true that the company that they want to win the bid is choosen before the bidding process begins. This can be based on many reasons, some quite good, others less laudable. Often it's because this is someone that they've worked with before, and who already knows what they want on the project. Frequently the only reason that there is a bidding process is that administrative proceedures require it, and sole-source justification is made unreasonably difficult. (Multiple layers of management can cause this effect.)
... I have noticed that when buying off the shelf products managers tend to prefer to pay more. I think that to some extent they get a feeling of status from deciding to buy a big ticket item, and something inexpensive just can't give them that. Apache recently had a hard time standing up to IIS for just that reason at a place that I won't specify. It won because the staff just went ahead and installed it before IIS was ever ordered, but until after it was up and running, it wasn't believed in by management.
Still, I'm a bit surprised... I thought that usually in such a case the bid specs were so crafted that only one company could properly fill it. That's the usual technique. OTOH, it's amazing just how many bids are non-responsive. It's as if they didn't read the specifications. (But I can't see why they would hide it from you if they found your bid non-responsive. That's one of the really valid reasons.)
Perhaps what happened was that because they knew who they wanted to win the bid, they were careless with the bid specifications. In that case they could hardly admit the real reason, but they would still have a valid reason to prefer the person who would do what they wanted, rather than what they asked for.
That said
I think we've pushed this "anyone can grow up to be president" thing too far.
A few possible factors at work in general:
A) When it's not your money it's easy to spend.
B) Momentum is a powerful force, even if a vendor hs done you wrong it *seems* easier to keep working with them then find a better vendor!! That goes for app servers, consultants, everything.
C) People are afraid to buy outside name brands. That sort of goes with (B) in that after a while even the shoddiest vendor becomes a "name brand".
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Which do you think sounds better in an annual review (if the software project succeeded) or resume (if it failed):
"Evaluated, selected, and managed contractor for a $5,000 software project..."
"Evaluated, selected, and managed contractor for a $15,000 software project..."
"Evaluated, selected, and managed contractor for a $75,000 software project..."
In a big company, thinking big is one of the keys to advancement...
"How to Do Nothing," kids activities, back in print!
I've seen the exact same thing. I can sell twice as many of my product at $600 as I can at $300, because of the "you get what you pay for" perception, AND because the higher price point also puts me into a market that is more willing to spend money when it's needed.
The further advantage of a higher price and higher market bracket, is that it gets you OUT of the "too cheap to pay for what they need" and "chronic deadbeat" market. So you make more money AND have much less hassle when you go to collect your fee!
Plus the higher market bracket gets you out of the nickel-and-dime dickering and dithering that's so common when people are trying to get a job done on the cheap.
When someone does get charged more than the work I really did, I'll usually add on some benefit to them -- such as my completely computer-illiterate client who calls me to install software from one-click CDs. I'm not going to drive 100 miles r/t without charging a service call, but when I had that little to do, he really didn't get much value for my minimum fee. So after I install his program or whatever trivial thing he called me for, I do all the maintenance tasks that no one's done since I was there the last time. Then we both feel like he got his money's worth.
~REZ~ #43301. Who'd fake being me anyway?
My finance professor gave us a great quote (I have no idea who said it first):
"Borrow a dollar and the bank owns you. Borrow a million dollars and you own the bank."
Paying a consultant more gives the company more leverage with that company. Anyone can walk away from a $10,000 per year contract since you probably have other contracts, but it is a whole hell of a lot tougher to walk away from a $100,000 per year contract. The company can threaten you with cancelling the contract to get you to do things not in the original deal. I've personally had that happen. I've also worked for a company that finished a project before the contract was signed. The client never knew it was done because we had to get them to pay for it first. It was 80% paid before the contract negotiations were even finished.
Ummm, Jon, aren't you supposed to be dead...? - Otter(3800)
The general comments about being in the expected budget range are right on the money. As one who spent over a decade in software and network consulting, we worked hard to be sure that we were priced a high as we could be and still stay under the decision-maker's signing authority.
There is also a definite effect related to the famous Giffen Good, defined as "a special type of inferior good that's quantity demanded rises when price rises". http://www.cr1.dircon.co.uk/TB/1/giffen.htm
Although this was first proposed in the 19th century related to economics of poverty, it has a very real effect in other contexts. The most obvious is in goods sold to the rich, where they want to have spent more for X (so as to be perceived as being rich enough to afford it). This effect is also clearly present in the business environment, but more related to the perceived secuiryt and accountability related to higher prices.
The account was short, but you probably need to talk more closely to your customer. If your price is low (or high), they need to be sold on WHY it is low or high. If you have a cost advantage that can be passed on to them (pre-developed libraries, low overhead, etc.), let them know, otherwise, they may assume that you are just cutting corners. If your price is high, but you are taking extra care in certain areas that will benefit them, again let them know or they will make other assumptions.
Mostly, don't just throw a big cold wet fish on their desk. Explain to them how great it will taste with your expert preparation and why the price is right.
Cheers,
J!
THPPPT! Jokes on you, I'm married. So Nyah!
Kintanon
The following text is being inserted in order to kill time so that slashdot won't discriminate against me for typing too fast.
The previous text was insreted in order to kill time so that slash, eh nevermind that wasn't as funny as I thought it would be.
Check out JoshJitsu.info for Brazilian Ji
This is also known as the Emporor's New Clothes Syndrome after the children's tale of that name.Cognitive dissonance sounds better, but it all comes down to believing that you get what you pay for!!!!
perhaps they arent so clueless as you think. Software developement IS expensive, if done properly.
There is a perception that software development is expensive
Why else do you think XP, for example, costs £250, even though its going to sell millions of copies?
Microsoft is a monoploy who can charge more or less what they like, which also means they have little incentive to improve their own productivity.
So if you`re too cheap, you`re almost certainly doing something wrong.
Or possibly you are the only one doing something right. About all that can be said is that you are not doing what everyone else is doing.
The bottom line is that you can only *guess* why the client rejected your bid.
:-)
Perhaps spend money to somehow get their honest answer after the bidding is done. If an outright payment to them does not seem appropriate, then invite them to high-quality lunch somewhere to try to shmooze the answer out of them.
We can sit around and guess until the cows come home. However, perhaps you should find a way directly to the source of the rejection if it *keeps* following the pattern you describe.
By the way, having a gorgeous babe on your team will greatly improve your chances of winning a bid. Hire one if you need to during any people-to-people presentations. Maybe offer to fix the babe's PC in exchange for wiggling T&A during a meeting. Or hire a hooker to show up. They don't have to do anything besides be pretty.
(Just don't pick the lowest-bidder hooker
Table-ized A.I.
"Why are people willing to pay $10 for a burger at some fancy restaurant when you can get one from a roach coach for $1.25?"
Looking at it that way, the reasons seem pretty obvious:
- Quality
- Service
- Atmosphere
- Accountability (you know where they'll be if something bad happens)
Cheers
-b
Always keep an eye on your junior employees when you turn down one of their ideas or they'll backstab you later.
Actually, it sounds like that CIO was a prick with no real vision for the future. Sounds like he was real fun to work with.
"Tax preparation software eliminates errors your[SIC] may make...." From IRS home page.
I agree but don't fully understand why people often default on the expensive==good mentality. One idea is that it is somehow genetically encoded into most people.
The problem is that it's rarely applied consistently sometimes conpletly illogically.
I do agree with you for the most part, but I disagree with your sweeping bias against Sun, IBM, and Oracle. There are times where the elegance, consistency, and functionality of a Sun server is very worthwhile, and there are times where the raw flexibility of an Oracle database server is unquestionably justified.
In my earlier post, I was trying to point out that the costs far outweighed what was actually required for the government project in my example. However, you seem to have the opinion that all of the expensive options have equivalent cheaper options, which isn't always the case.
For example, I would not hesitate to suggest Sun equipment running Oracle, if it squarely met the needs of the customer. Sometimes two $2500 rackmount PCs just don't cut it, sometimes they do, but thay certainly cannot be applied to all cases.
Healthcare article at Kuro5hin
(* Clearly 'he' isn't making them clear to his manager or sideways or the government etc.... *)
Perhaps he/she *did* complain about the lack of resources, but nothing happened.
How many of *your* complaints to uppers result in fixes? May rate is about 30 percent. Plus, one's next evaluation may say, "Excessive Complainer".
Sometimes you just have to go with the flow and choose your battles wisely. Our geek gene makes us worry too much about raw merit. But, that is not what the outside world wants much of the time. It is all a Big Sales Job.
Table-ized A.I.
Look at from a different perspective. Apple users are quite content to pay what some would call extremely high prices for what could be seen as a somewhat anemic system. (I, personally love Macs, but I'll leave that out of this for now.) If you put the Macintosh and a WinTel clone up against each other, it's always a game of catch up on both sides. WinTel boxes can do almost everything a Mac can, and vice-versa. So... why do Mac users pay so much for boxes that won't have support from Apple in a shorter period of time than a cheaper WinTel box? There are a few complicated answers:
1. Style. Like it or not, The Macintosh still beats a WinTel box (especially cheaper, no name boxes) when it comes to style. They have nicer looking hardware out of the box. The user interfaces is simple and streamlined. Although Mac OS X adds a little more complexity, but not as bad as Windows.
2. Psychological Security. "It costs me more, but it's got to be better just because of that reason." This is an extension of the "you get what you pay for" concept.
3. A known quantity vs. fear of the unknown. If you are familiar with a system, why change? Even if the alternative is cheaper, there is a learning curve. A Mac user is already comfortable with their knowledge of the Mac OS. If they've never worked with a WinTel box before, and have a little fear of doing so, they probably are not going to change, even if it can save them some money.
4. "Added value". There are some things that a WinTel box just can't do that a Macintosh can. Although they are very specific niches, they still require a Macintosh. (*Professional* Audio Production is a prime example. Not the "multimedia" crap or Semi-pro stuff that a WinTel box is well suited for.) Yes... there are some pro packages for Windows, but look at answer three to see why a Mac user is more likely to stick with a Mac.
Getting back to the original post: Who's to say that the company that got the bid at $15,000 didn't have a previous relationship with the company who requested the bids? Where I work, we pay out the nose for some things that we could get elsewhere a lot cheaper. But the added cost to us is worth it because we have a very close relationship with our vendors/consultants, etc... Those close relationships allow us to get our work done faster, instead of working with someone new and cheaper who may not be interested in fostering a long term relationship with us. It's unfair and in-efficient IMO, but I don't make those decisions. Whenever the subject of a cheaper alternative has been discussed, those that do make the decisions deride the lower cost by asying that there isn't any security in that since the cheaper company is an unknown quantity.
Another factor that doesn't workk with the Mac analogy, is "Bigger ass to whip if something doesn't work." The company that charges $15,000 for their work rather than $5000 is likely to have larger coffers to raid in the event of a lwa suit. That ALWAYS makes suits feel more secure. If the only assets that a company that charges less for their work has are a car and a house, "litigation happy corp" isn't going to get much in reparation even if they sue for millions.
An aside "rant" (those who aren't interested in my politics can skip this part):
This always brings me back to my conclusion that captalism is failing. (You can call me a troll at this point if you wish, but that doesn't change things.) I am not saying that communism or some other system is better. But, I AM saying that another system is destined to replace it for better or worse. Jump off the sinking ship while you still can and work on developing your own approach to "coding for food". Just keep in mind that the two failings in humanity (fear and greed) are any system's stumbling blocks. Oddly enough they are also responsible for getting us where we are today, both good an bad. Think about it for a bit... Hiroshima. Why? Fear. Gulf War. Why? Greed. Discovery of fire. Why? Fear? End of communism. Why? Greed. Even more interesting is the inextricable link between competition, greed and the advancement of civilization.
Just give it some thought if it interests you. I think we are seeing capitalism fail for the same exact reasons that communism did. Enron? Greed. etc...
-"...bad old ideas look confusingly fresh when they are packaged as technology" - Jaron Lanier (Digital Maoism on Edge.o
As a consultant working for a software/ hardware consulting firm I handle this kind of question a lot. The problem is it usually has nothing to do with price.
As a firm we regularly advise against hiring individuals or small firms for software projects. Why? They tend to disappear. With a larger firm along with a higher price you usually get: more support and stability. We had a case not to long ago where we advised a client to take a higher bid on a web project than the lowest bidder- and they chose otherwise. They chose a lone developer in North Carolina to develop the system, he got a job offer that was "really good" but promised to keep working. Three months later nothing new had happened and he tells us he is sorry but he is busy with "work"! (To which the client responded "Well what the hell do you consider our project and payments!). Two weeks later we get a single burned CD with some source code and a note saying he had to move, so sorry, thanks for the opportunity. We did get some money back but now we do not know where he is even located! Now we are scrambling to find a group that can finish the project on time and with out too much of a higher cost- more than likely we will have to start over.
Are all individual developers/ programmers like this? No, not at all but the process of finding this out is often difficult and painful. So... most companies go with larger firms that have more stability and offerings. With that comes overhead for the bidder and thus a higher cost. So, often the higher cost bid is chosen not because the other bid is too low but because there is no stability. Also with bigger companies there are multiple developers, better planning (usually, but trust me not always) and more experience. One of the other benefits of the larger deployment/ programming companies is that they usually have lots of references that can be reviewed and checked out in detail. Often with smaller firms or individuals many of the projects they have completed were with another company and they really don't count. When you work for someone else there is a support structure (accounting/ finance, more developers, better equipment & testing) that you do not have on your own.
This is not to say that we have not had good experiences with individual developers (or bad ones with larger programming groups) but on the whole our client feels better when they have a company with assets to make grievances with and not some guy with an computer, car and PlayStation as his primary assets that we sue for.
Just my 2 cents.
Huh?
Several of your items sound reasonable, but are actually foolish.
For instance number 2 on your list is that the more developers that you have working on a project, the more likely it is to be completed and delivered on time. In fact software engineering literature from The Mythical Man-Month on comes to exactly the opposite conclusion. Adding bodies to software development creates basic infrastructure problems that make the project more difficult to accomplish, let alone to accomplish in a timely manner.
Real world project data supports that. Most large projects fail. Larger projects fail worse, more often. At one point Sun had an internal rule that no project would be accepted that was supposed to take more than 6 months or cost over $1,000,000. The odds of failure were just too high.
Now of course a given project has minimum realistic needs in terms of how many skills are required, and how much work will be needed. There is a minimum team size for a given project. But for the optimal productivity and probability of successful completion, you really want a team that is close to that minimum.
And that gets us into your technology decisions. Agreed that when you are trying to bid on a contract for a client, you do what the client wants. If the client wants a series of unproductive technologies, you have to increase your development costs because of your projected unproductivity, but that isn't the time to sell them on the benefits of their letting you work more productively.
However at this moment we are not dealing with an RFP. So I am going to point out to you that if there are real software engineering reasons to want development teams that are as small as feasible, then there is good reason to want a development environment that makes developers more productive and therefore reduces the minimum size of development team that you need for your projects. I won't say which tools and what environment that is because the answer depends on a lot of hard to evaluate factors (though I admit to thinking that your choices "leave room for improvement"), but I can point to Beating The Averages for a sample essay showing how much of a difference it can make. And I cannot emphasize enough that it is a very powerful experience for a developer when they see first hand what kind of difference it makes for them to be in a productive environment.
That said, there is a good business case for not experimenting with your development environment. It is one that puzzles most techies, so it is worth explaining.
If you start making changes in areas that your company does not personally have a lot of experience in, then some of your decisions will be good and some will be bad. The problem is that the bad ones will cost you far more than the good ones win you - you are essentially gambling on your ability to pick correctly in an area that you know nothing about.
Therefore outside of areas of strong company expertise there is a lot of pressure to try to make similar decisions to your competitor. Those are no more likely to be good or bad than trying to make your own choices would be, but they have the decided advantage that you won't accidentally choose badly where your opponent chose well, in an area that turns out to be the deciding factor.
Incidentally this is a principle that explains the advice offered by Paul Graham in Revenge of the Nerds. In that special case Paul is talking about how a nerd should take advantage of their area of expertise. And the answer is to pick a line of business to which your special knowledge applies, go into that business, and let your correct decisions tell. But when you do that, do not simultaneously attempt to rethink every other area of business that you must deal with, because you will get a lot of that wrong!
You can't have a Nieman-Marcus operation on a Wal-Mart budget. Not everyone is a dirty-sandals, linux-using hippie. Let me guess, you're one of those people who freaks out hardcore when you find telnet in use, right?
Shutting down free speech with violence isn't fighting fascism. It IS fascism!
The answer is plain and simple.
Look at the tax angle. The more you
spend, the more you can deduct.
Why would a business pay a penny more in
taxes than necessary?
2 programmers will probably always do a better job of things then 5 programmers on a job that size.
thank God the internet isn't a human right.
Eliminating the "self taught" out of hand seems like a bit of throwing the baby out with the bath water. I've seen many a person who had a number of certifications and couldn't program their way out of a paper bag. Certificiations, depending on the type, can be almost completely meaningless.
Personally the only certificiation I have is as a Java programmer and I will tell you right now that all this means is I read the book. If you want a good measure of skill, get a sample of some of the developers and what their real-world experience is. Most of the good developers I know have few if any certifications.
This sig has been temporarily disconnected or is no longer in service
That said, there is a good business case for not experimenting with your development environment. It is one that puzzles most techies, so it is worth explaining.
I have my own illustration. I live in a 70 year old house. The main bathroom was fixed up by the previous owners about $10 years ago, but it had problems. Among them, the old wall mounted toilet used a lot of water. It had a short bowl (I like elongated bowls) It was cracked at the base. It oozed unknown stuff around the base and it had started leaking where the pipe from the tank joined the base and the wall wasn't holding the weight from the tank very well.
We could have fixed the wall and installed a new wax seal and we might have fixed the oozing problem (assuming the cracked base wasn't involved), but we thought this was a good time to upgrade to a new water efficient modern toilet with a nice roomy elongated bowl. Sounds simple, right?
Well, first thing, the distance between the center of the drain and the wall was about 15.25" rather than the now standard 12" So, we had to custom order a new toilet. The custom order, even though it was discounted from retail, was still 3x as much as the same toilet at Home Depot for a 12" offset.
For another thing, no one, as far as we could tell makes toilets for a 15" offset, so we had to order a 14" and figure out what to do about the extra large gap between the tank and the wall, because, once we got the new toilet in there, it was obvious that it was too damn big.
We are still going to have to patch the wall, since the new toilet is smaller (but we knew that).
We had to get new studs to hold the toilet to the wall and I had to look around a little more to find ones long enough for our situation.
The old stud hole was too rotted out, so I ended up having to epoxy the stud in, but not until I made another trip to look for more options. Plus, this still may not hold and I might have to try something else.
The toilet sticks out into the room further than I would like. Their solution for 14" offsets is to sell the same base as for other applications and make a tank that is built up at the back so that it comes closer to the wall.
Now, the addage of "If it ain't broke, don't fix it" doesn't quite apply to my situation, but the reasoning is still the same. Seemingly minor changes can be much more involved than they look at first glance.
Some of the problems we ran into could have been mitigated, but they would have required significantly more planning, and some of them would have required exploration which itself would have been disruptive and might have created other problems that needed to be solved.
Changes to ones systems platform can be similarly disruptive.
Many software dev jobs are moving to India, because HP and other big businesses are sick of paying Silicon Valley wages when they can hire Indians to do the same work for $1/day. Who cares if quality suffers, as customers don't seem to care. Multi-National, Conglomerate Get-Rich-Quick Formula: "Just setup in Kerplekiztan or some 3rd world country, work the locals cheap, and you'll make bank."
The biggest trick the devil pulled was letting lawyers become politicians so they can write the laws.
Its becaue management of any company is a bunch of Penis Jockeys that think Bigger, and more is better....Usually till they take it in the Ass, then they realize something medium fits much better...but smaller doesn't quite give them all the best pleasure for their dollar...
Power Corrupts,Absolute Power Corrupts Absolutely, leaving one person(group)in charge is absolutely corrupt.
In other words, if you think it will cost $5K, charge $15K.
Except that the cost you might well need to consider is the cost of the most likely method of performing the task. Even if that isn't the method you plan to use.
Dunno about him, but I would be chasing up early payment on those invoices every time, and explicitly disclaiming warranty on security issues.
I've had a client blame me because one of their Windows clients ran an executable attachment which then sniffed, filtered and transmitted a lot of their plaintext (or near equivalent) traffic, notably including telnet and SMB passwords. Subsequently, their entire LAN become a DDoS zombie.
Oddly enough - from the logs - the telnet passwords were sniffed, but never used against the Unix boxes, only against the Windows machines, presumably in the (in this case justified) hope that they would use the same password twice.
Got time? Spend some of it coding or testing
Let me guess, you're one of those people who freaks out hardcore when you find telnet in use, right.
:-)
Not if it's Kerberized and encrypted or ssl-tunneled.
This is a fairly reasonable thing to "freak out" about -- there *have* been major break ins because people are using unencrypted telnet and someone seizes a crucial machine.
May we never see th
How the hell does that make him cheap, because he WORKS for his money and doesnt waste it on some teen wanting $20 to do a few feet of walkway?