software distribution models
Filed in archive Technology by tj on May 23, 2004
Rajesh links to Dan Bricklin's thoughts about software licenses.
I guess is very much right with his perspectives. Software distribution has changed as we are even talking about utility computing for many basic software (and hardware) services.
I guess is very much right with his perspectives. Software distribution has changed as we are even talking about utility computing for many basic software (and hardware) services.
"Back in the 1980s and 1990s, when I last ran Software Garden, a common business model was to write some software, protect it through copyright (so that only the author could distribute it) and as a tradesecret (distributing only executables so as to protect the source code), and sell it through the mail or stores as a "shrink-wrapped" product. Any competition probably did the same thing.
For some simple software, there was the "shareware" model, where the software could be copied freely, but if you liked it you were supposed to send in some money to "register" your copy. This has proven to be a viable business model. Enough people did send in money to fund a variety of companies. There were variations on this theme, but in general it also only involved executable programs. You couldn't modify them nor learn from them by reading the source, etc.
What I want to do
I am planning to produce a variety of relatively simple "utility" programs and sell them to see which get some traction before continuing to enhance those into more full-featured products.
The old costs to market and distribute
In the past that strategy would have a problem because of the cost to publicize, manufacture, and distribute the products. Marketing and distribution costs are very real. An ad in a magazine can cost thousands of dollars each time it runs, and you need to run it repeatedly to keep up sales. Printing manuals, duplicating diskettes and CDs, and creating packaging all cost money -- all spent in advance of any sales. A product that brought in just a few thousand dollars in sales would be a total loss. You had better be pretty sure that your application was worth the investment, and not just have the time to invest for development, but also the seed money to get marketing off the ground. "Getting traction" for various utilities, from what I've seen, can easily take from months to a year or more, and much of that time is devoted to active marketing, not creating new products."
For some simple software, there was the "shareware" model, where the software could be copied freely, but if you liked it you were supposed to send in some money to "register" your copy. This has proven to be a viable business model. Enough people did send in money to fund a variety of companies. There were variations on this theme, but in general it also only involved executable programs. You couldn't modify them nor learn from them by reading the source, etc.
What I want to do
I am planning to produce a variety of relatively simple "utility" programs and sell them to see which get some traction before continuing to enhance those into more full-featured products.
The old costs to market and distribute
In the past that strategy would have a problem because of the cost to publicize, manufacture, and distribute the products. Marketing and distribution costs are very real. An ad in a magazine can cost thousands of dollars each time it runs, and you need to run it repeatedly to keep up sales. Printing manuals, duplicating diskettes and CDs, and creating packaging all cost money -- all spent in advance of any sales. A product that brought in just a few thousand dollars in sales would be a total loss. You had better be pretty sure that your application was worth the investment, and not just have the time to invest for development, but also the seed money to get marketing off the ground. "Getting traction" for various utilities, from what I've seen, can easily take from months to a year or more, and much of that time is devoted to active marketing, not creating new products."
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