Oh, it’s still coming, alright.
We’ve talked about this before.
Should software be immortal?
Got a fair bit of personal history with this, too, so let me explain what’s going on.
It All Starts With Software
In 2002-2003. Ures truly was part of a turnaround team at a better-than-decent software company.
It was in the higher education space; we increased sales from 6-million when I started to about 19-million when I left, and I got deeply enmeshed in the problems of growing a software company which is in the workflow solutions space.
Let’s begin at the front-end.
In 1980, or so, almost zero companies used computers effectively.
When I was running a broadcasting college, circa 1986, it occurred to me that a huge reduction in paperwork could be accomplished by building the “Electric Railroad” around the office.
Up until that part of history, everything ran on paper.
When you called the college to find out about classes, it went onto a piece of paper called a “lead slip,.” This contained the name, phone number, age, and a few other basics about an applicant for school.
When the applicant came to the school for a tour and to meet with admissions staff (the sales part of school, dressed up so as not to scare people off) there was more paper.
Then there was testing, financial aid, student tracking of satisfactory academic progress, graduation, and placement efforts. It all ate up an amazing amount of paper.
In 1986, or so, I built my first “electric railroad.” Doing a gob of hand-coding and writing for one of the earliest Novell networks, thinking began to transform with amazing speed.
Someone calling the school was entered into a database. No one could delete records. Honesty in sales increased 10-fold as did performance.
At the front desk, since the name and such was in the computer, the manual form was quickly adapted to the computer, and next thing you know, we were graduating students that we could track all the way through the program. This was back in ‘89, or so. I mean right down to which TV commercial on what station had gotten them to the school.
Fast-forward to 2002 and Ures truly is working on the design of such “electric railroad” workflow process software in the higher education space. SQL, student loan processing, the whole process online.
That’s where we ran into the “hard reality of software” and it’s something not too many people talk about.
You see, when you’ve invent new – first ever – software, there is a large investment in the intellectual property development. You need computers, architects, business use cases, implementation teams to replace the old paper system and so on.
The problem is, once you are done, there is no way to pay for development of the next big thing. People who buy your software product want to own it outright so you get hooked – just as General Motors did – on something like the annual model, complete with planned obsolescence.
Advertising goes up, cost of software customer acquisition goes with it. Saturation looms.
As always, I was exceptionally lucky.
The software program for the higher education sector had to include a substantial update each year because the US Department of Education was forever and always adding this, that, or the other requirement to their reporting.
I mean let’s face it, once upon a time, and it wasn’t that long ago, schools couldn’t tell you anything about the number of Pacific Islanders attending their school. Now, thanks to computer software, there are reams of such reports available.
While trying to articulate where the business would have to go (which it did and still flourishes) I came up with the idea of the Evergreen Software Model.
This essentially says “Every year we will add this feature set (or in the case of education DFBMS software, we continued compliance and added features) in order to justify a recurring expense to the end user or client.”
Now, fast-forward to the release of Windows 10: Sharp-eyed Bruce the Expat down in Ecuador, who is one of our best critics, sent me a cryptic note of warning about what’s in Windows 10:
You do know that windows 10 includes a feature that allows software vendors to charge annual fees for using the software installed on a windows 10 computer. If you don’t pay, the software company can access your computer and shut off the software. We will probably not see this the first few months after windows 10 is issued. Then the fun begins.
Its just a business model.
Unfortunately, it’s the most common software problem out there which (not too modestly) I can discuss in plenty of depth, having been there myself.
Even without that, however, I have two cases of recent experience that you’ll find instructive.
One is a product I occasionally use for drawing up diagrams for Peoplenomics reports and clients. It’s called SmartDraw.
Don’t get me wrong, either: It’s a great product – see their website over here
The one hitch-in-the-get-along with it is that when you buy the product, you only get the product use with support and upgrades for a year. Then, you need to subscribe to the company’s offer for ongoing support.
Lots of software outfits are going this direction. I will be putting up an UrbanSurvival email list one of these days and as much as anything, deciding which software package to use is difficult.
One approach would be to use an all-inclusive software service such as www.mailchimp.com. That’s the lowest hassle to implement, but I never really own the software. It is leased and if you don’t pay, sure you can download the client base to something else, but there goes the ease of use.
That one, FWIW, is a pure monthly rental product.
An alternative, a bit more complex to use, is something called Infacta Group Mail which is also a dandy product,. This one is fashioned more like SmartDraw in that the product will shed features over time unless you sign up for the maintenance/update program.
There are lots of examples – they are all over the place. Intuit is doing essentially the same thing with their TurboTax product. Same basic code with a bunch of plug in modules but like my “Evergreen Software” for the higher ed space, when government is involved, people have a real incentive to pay the recurring fees. Ergo, Turbo Tax is an annual recurring expense.
Not so much when it comes to a drawing program because I already have a lite version of AutoCad (a clone, but I can edit DXF files) and great drawing programs (*Corel Suite) .
So do I need to keep up my SmartDraw account for $69 bucks a year?
No. Maybe if Peoplenomics had more subscribers, but for now, no.
Even Microsoft itself is dabbling with this core problem of “How Long Should Software Live?”
With open source code, it could live forever. But, where’s the money in that?
So Microsoft came out with its Office 365 deal which is software on the annual subscription model plan.
Having been intimately involved in the Evergreen Software problem since 2002, I can tell you what the migration path is for all such products.
They will initially be priced about comparable, or just slightly under, the retail price given the five-year lifespan of software. If a full-on version of Office is available for $500, then the price of Office 365 will be a bit less than one fifth of that.
Over time, these software companies, including the one I was with, want to get on your personal balance sheet by nibbling a few dollars per month.
But the problem is that runs smack-dab into the Peoplenomics lifestyle which says, in so many words, get as much income as you can without killing yourself with stress disease, and make the rest of your life happy by living slightly below your income. Kill all recurring bills you can.
Problem is, in many areas you are not going to be able to reduce your software expense to zero unless you go with the open-source crowd and even if you do, there’s always the risk of viruses and other such things which the Evergreen Model does a much better job of addressing.
That’s because the for-profit, evergreen model company, has a higher income level and thus can spend more money on research, development, and deployment.
Don’t get me wrong. I understand what Microsoft is doing by including expiration times on software. But only the truly sick would spend the time to read EULAs (end user license agreements) to see how the weasel wording is coming in to EULAs that will allow software to be turned off in the future.
The biggest problem with technology is that it is perishable over time.
I won’t tell you who she is, but a buddy of mine wrote some genius code for the paging industry in the 1980’s and it was eventually sold for a very nice figure to one of the regional Bell operating companies (RBOCs).
But let’s see what happened to the code from there, shall we?
We assume it went into the RBOCs paging operations because it was fine high speed billing code. And from there, elements might even have been adaptable to billing for cellular phones, which were just in their infancy.
And from there? It would be even more fanciful guesswork. But you can see what happened if you’ve been shopping for airtime lately: It’s almost to the point where billing for airtime doesn’t matter (*it does, but go with me on this) the real game is to use airtime to justify a large monthly access fee to the network.
We have gone from 10-15-cents per paging message to a meaninglessly small number for a text message, but the amount you are paying for communications has continued to increase as a fraction of your budget.
In 1970,. sure you were subjected to 18-minutes an hour of commercials on WLS, KJR, or whatever your regional rocker of choicer was. But at the time, you were only paying $25 a month for a phone and long distance rates were not bad. No TV bills. No music bills.
Fast-forward to now:
You have a cell bill. You have a cable or satellite bill. And now you have software bills. Got an iTunes bill? Prime?
See what’s happened?
The part of your life that used to be free – simply paid for by putting up with a bazillion BS ads – has been replaced with death by a thousand financial cuts:
Cable bill, cell bill, Amazon Prime annual billing, iTunes, Netflix monthly, Hulu…and pay per stream movies. Oh and your ISP for the house, a backup landline anyway (which is now $100 instead of $25).
Yet we persist in calling this progress.
Around the ranch we’re playing with the new Amazon Echo I told you about. Interesting product. But soon, I’m sure, they will start to charge for its potential functionality.
They already are for content like best selling books (*by way of the Audibles billing) and on and on.
Sure, the open source crowd will find a way to read all those books in Project Gutenberg, but until they do, Amazon has no incentive to turn Echo into that smart a product. And, if you want a weather forecast without winds being mentioned (which matters hugely to me as a pilot) then the Echo is just the thing.
The bottom line here is simple:
The game in play by corporations right now – other than taking over government at check writing pen-point through the lobbyists – is to add as many of these monthly recurring fees as possible to the
victims I mean customer’s expense sheets.
So the cost of just being hooked up to an electricity source is costing you money many places as a “customer charge” and on and on it goes.
Verily, into software as well.
And that’s the hell of Progress. It’s not.
Rather than all having time to really create, really think, really pursue personal purification and excellence, what we end up doing is waking up to another day on the effing treadmill to keep up the payments on a million budget items so we can all eat processed food because we don’t have time for home cooking or home organic gardening.
Lots of conspiracy theorists are looking for the Mark of the Beast in the wrong place.
It’s in your checkbook. That is, if you still have one.
You know they can suck money out of your bank account and save you the cost of a stamp each month. Provided you’re willing to trust ‘em to rent you that part of your life.
Rinse, repeat, and don’t think about it too deeply, or you you’ll get pissed.
As social collapse guru Joseph Tainter points out: When the marginal rate of return on additional effort falls below zero, people just walk away from society.
Expat Bruce in Ecuador and us here in the East Texas Outback may disagree on many things, but I think we would agree that the tide of Renting-Your-Life is rising. And we’ve decided to build our own lifeboats.
Might want to think about one for yourself and your family one of these days. Software, apps, and social is all going where cars went: Quality down, annual model nonsense up.
Because with that “constant growth” this whole world blows over. And that’s the one thing no one talks about: The global addiction to stupid.
The C function [scanf ()] is immortal. The trick of corporations is to see how many ways we can be hosed into paying for it.
And if you figure out how to avoid payment? Let’s license compilers, shall we?
Write when you break-even…