Is Software too Expensive?

VaryGeek over at asked, “Do you think software should be cheaper?” This is a very good question. Unfortunately, there is no easy answer.

The debate over the cost of software has raged on in the tech community for years. The division between two camps of thought on software pricing runs deep.

One side of the debate will make the point that software development is extremely expensive, and therefor the price per unit must remain high in order for developers to break even – and perhaps make a profit. This makes sense as development, marketing, and support can contribute to high overhead costs which can drain capital very quickly.

Another school of thought in the great software debate comes from proponents of open source software. By handing development over to a community of skilled programmers, software designers can benefit from a larger pool of resources without a lot of overhead involved. Larger projects have found sizable audiences (Open Office, Audacity, etc) and development organizations can see profit through selling support and/or extra services to end users. In addition, this is can be a great way for newer developers to make a name for themselves through contributions to these projects.

One major downside to open source software is that it tends to be rough around the edges. The gloss and attention to user experience is often overlooked in favor of packing features in the software. Additionally, it’s hard to set a great UI on something that is constantly changing. This would require additional work on the part of the designer every time a contributor adds a visible feature.

In the middle of these two camps are the small developers that keep their prices low in order to make up profits in volume. This is a common trend among independent developers that have smaller teams and marketing budgets. Programs that most commonly fall in this category are found on mobile platforms like Android and iOS. Thanks to the addition of an easy-to-use app store on Mac OS X, cheaper software is beginning to become more widely available on the Mac platform as well.

These lower-cost programs prosper from accessibility. When Steam expanded their direct download game store to include independent developers, less-expensive titles took off like a bullet. By making software easier to acquire, they were able to lower overall prices and still maintain a profit through the increased volume.

It’s taking some time for larger game development houses to catch on to this trend – and as long as they continue to break previous records with each release of Halo and Call of Duty, you shouldn’t expect to see the prices drop any time soon.

The same goes for high-priced business software that costs hundreds per license. Thankfully, free web apps have entered the business software market and gained enough market share to convince them to consider alternative pricing options. Only time will tell if this is a sign of lower software prices to come, or a phase that will pass.

So, is software too expensive? Leave a comment and let me know your opinion on the matter.