Path: utzoo!utgpu!utfyzx!harrison
From: harrison@utfyzx.uucp (David Harrison)
Date: Mon Oct 16 13:39:30 EDT 1989
Message-ID: <1989Oct16.133930.21837@utfyzx.uucp>
Organization: Dept. of Physics, Univ. of Toronto
Newsgroups: comp.sys.atari.st
Subject: Re: PROGRAM COSTS
References: <891010.08342625.067245@SFA.CP6>
Reply-To: harrison@utfyzx.UUCP (David Harrison)
Organization: Dept. of Physics, Univ. of Toronto

In article <891010.08342625.067245@SFA.CP6> Z4648252@SFAUSTIN.BITNET 
(Z4648252) writes:
>Chris Hinton writes:
>> "$100+ for any program is just plain stupid."
>Why?  Some of the better business programs may take a team
>of several professional programmers and many months of hard work.
>Where does the money come from for their salary and research costs?

I have read that Lotus needed over 100 person-YEARS to port 1-2-3 from
DOS to the Macintosh.  I don't promise the reliability of the number, but
it doesn't seem horribly off the mark to me; good software really is
that hard to write.  What it implies is:
- It cost 100 person-years x $40k / person-year = 4 million bucks to
  do the port.  ($40k / person-year is probably low: standard accounting
  practice is to double a salary to find the cost of an employee.)
- Assuming Lotus gets 50% of the retail price, they would have to sell
  80,000 copies at $100 at pop just to get their R&D costs back.  They
  still haven't paid for media, documentation, technical support, the
  cost of writing the original 1-2-3, nor have they made a dime.
  Of course, if the product flops in the marketplace they are out the
  4 million bucks.

Generalising these numbers, we might conclude that it is people who
think good software should cost less the $100 that are "just plain ..."
-- 
David Harrison                            | "God does not play dice with
Dept. of Physics, Univ of Toronto         |  the universe." -- Einstein
UUCP: uunet!attcan!utgpu!utfyzx!harrison  | "Quit telling God what to
BITNET: HARRISON@UTORPHYS                 |  do." -- Niels Bohr