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NSF Wants To Know How Much Software Really Costs
eldavojohn writes "It's no secret that the actual cost of software is very complicated. Sure, the companies that write software are spending money on it, but when that software is released, it doesn't stop costing money. You can probably think of a number of relatively tiny things that add up — especially if you're a system administrator — like the man-hours spent patching software to avoid a nasty infection spreading quickly. The bigger debt is that old piece of software you paid a bunch of money for back in 1998 that you're critically dependent on, but it has no support and hasn't been updated in years due to any number of reasons. Well, the National Science Foundation paid Gartner almost half a million dollars to find out what it truly costs to bring an organization to a fully supported environment. According to Gartner, this hidden liability or 'IT debt' is at $500 billion worldwide right now, and in five years it will be at $1 trillion. Along similar lines, a company called Cast that makes software quality tools reported that your average business application comes with a million in IT debt (PDF). And if that's not misapplied enough for you, they estimate that the debt is $2.82 per line of code in the application and also that it's on average higher in the government sector."
Learning on unauthorised copies enables companies to hire a person with the needed skills. The company then buys the software that the sole person could not afford. So unauthorised copies increase sales at the corporate level.
/The argument may not work for games software sales.
Many companies are transitioning to general purpose software as the features expand. High debt software is often replaced with an off the shelf solution with a much lower cost.
As examples, at home, I no longer use Photoshop. Gimp is the replacement. Open Office replaced MS Office. Natulus replaced Nero or EZ CD Creator. Ubuntu replaced Windows on most machines. I don't pay for expensive upgrades when possible. Many small companies are making the same move.
Only one machine has the MS Debt software for the few things that just have to have it. I no longer upgrade high debt software on the various desktops and laptops we use.
Ernie Ball figured this out years ago and published his story online.
http://news.cnet.com/2008-1082_3-5065859.html/
The truth shall set you free!
Hehe. We had one of those IT department brainstorming sessions once (I was in research at the time) and they were talking about this shiny new platform that they were going to roll out, I simply asked what the cost was. They threw out some figures about how they priced it an it would cost X dollars to implement over Y years. So, I asked "does that include the cost of decommission?" and got blank stares all around... The notion that you estimate the cost of getting out of abandoning / migrating away from a product never occurred to them! Products tend to not be all that flexible, they change over time, and business needs and processes often diverge from the product or a better product comes along -- we have fairly good ideas on what the platform turn-over is going to look like, how open various platforms are, etc. We can estimate the CoD with some accuracy. So why don't we? We're still buying into products that are readily identified as "dead-ends" and screwed when they are no longer supported, needs change, etc.
Because what happens when the "cloud" shuts down? What happens when your internet goes down and you can't even access what should be local files? What happens when the "cloud" has a major security breach and all of the files that normally wouldn't ever leave your company are now able to be downloaded to crackers everywhere?
I agree. Frankly, I don't trust anyone to host my confidential files, especially when I find that they're stored in another country. No thanks.
The higher the technology, the sharper that two-edged sword.
This is surprising to nobody who understands how this shit works.
True, but to the average consumer (this included pointy haired bosses) the upgrades for their home computer cost $0, the software came with it new, or was a one time purchase and the updates are either free or simply not done (or both), and every few years you just buy another one and give the old one to a friend or Goodwill with all your personal information still on it.
In the home consumer world, software IS only a one time expense for most people. Unless you are the guy who is having to get permission for upgrades, and patch all the servers in a commercial environment, this is your world view because it is your reality. It is not so shocking that average Joes and bosses don't know this.
Tequila: It's not just for breakfast anymore!
Which all pales in comparison to....
+ the cost of managements bonuses.
May the Maths Be with you!