Software Cost vs Sofware Value

From Slashdot – Calculating the True Worth of Software

Value is subjective. (Score:2)
by Bob_Robertson (454888) on Saturday July 23, @05:21PM (#13145783)
(http://www.mises.org/)

The premise of the “price” or “cost” part of the question is the fallacy called the “Labor Theory Of Value”. The fallacy is demonstrated by the simple fact that no two people produce exactly the same “value” in the same time, or the same job. Price is a calculation separate from cost.

http://www.mises.org/humanaction/chap12sec3.asp [mises.org]
“The Sphere of Economic Calculation”

“Value” is utterly subjective. What is worth nothing to me is of tremendous value to someone else. One loaf of bread to a starving man is valuable beyond measure. One loaf of bread on a fully stocked store shelf is practically worthless.

Giving away the software and selling support is no different from giving away the razors and selling the blades, a business model with which Gillette made a fortune long before anyone had computer software to worry about selling.

Bob-

True Cost of Software (Score:3, Informative)
by bokmann (323771) on Saturday July 23, @06:16PM (#13146080)
(http://www.javaguy.org/)

I hate it whenever I see a sentence that equates the cost of creating software to the cost of copying the software.

I am a software engineer. the piece of software I work on has 18 people working on it full-time to write it. THAT is the major cost. Duplicating it is a trivial expense. The cost of the people has to be amortized over all of the copies generated.

I contribute to open-source projects as well; I do that for a different motive than putting a roof over my head. Congratulations to those who can do that entirely with open source; for me, open source is like pro-bono work for a lawyer; I want to give back.

All that aside, you NEVER pay for the true COST of something, you pay for its true WORTH. The soft drink you are drinking right now has about $.06 worth of sugar water in it. I bet the can, transportation, and refrigeration cost more than the contents. I won’t even try to calculate the cost for a $5 cup of coffee at Starbucks.

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