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Software gets ever cheaper


#1

I’ve been doing my occasional check on all my business outgoings to ensure that I’m getting good deals. It seems to me that every time I do this (once every two years or so) software is cheaper than before. In particular prices for “cloud”-based offerings seem to be on an ever-downward path. Bug tracking, accounting, and video hosting are all categories of software that demonstrate this downward path.

I guess part of this is that the costs of running services keep dropping. But I suspect that the costs and efforts of starting up a software company also keep going down, leading to more players, many of whom can only compete on price.

Do you encounter this downward pressure on prices in your own business?

(Strangely. I don’t - the price of Poker Copilot has only increased year after year. It could be because it is a super-niche product that can’t be replicated too quickly.)


#2

I think this is a very important point to make. There is too much emphasis on the “charge for value” tactic in the bootstrapper community, as if every business operates in a forever oligopolistic or monopolistically competitive market. Really big businesses are often built using a “commoditize your complement” strategy and bootstrappers should consider that option.

In plain English: If you make one product cheaper or free, can you then make a profit by gaining market share for a related product?


#3

It would be interesting for you to list some of the software that you see going down in price. I feel like I see the opposite but that’s just kind of a gut feeling.

Gmail not free anymore
Helpscout - paying $30 for. Pretty sure a few years ago there was a cheaper option than that…?
Digital ocean - paying more for what I used to pay hostgator for.

As far as my own biz goes I don’t really feel a downward pressure. Have competitors cheaper or free that are kind of serving a different market.

That said I may be a downward force eventually on some of my upmarket competitors. Hard to say.


#4

Yes, I’ve seen this, it wasn’t that long ago I spent £1800 per year on an MSDN subscription, I don’t need to spend anything now as the parts I need are free or nearly free. It’s been the same for cloud services as well, my accounts software is only £10 per month (it would be £5 if I didn’t need to invoice in foreign currencies).

Right now I’m going through a process of removing some commercial components from Print Distributor, it has been quite easy to find open source alternatives which wasn’t the case when I first wrote it.

I’m starting to see some pressure with my own products, one of my competitors is offering a solution for up to five users for free. This is quite interesting as I have a reasonable amount of small customers.