Path: utzoo!utgpu!news-server.csri.toronto.edu!cs.utexas.edu!uunet!isis!scicom!rcw
From: rcw@scicom.AlphaCDC.COM (Robert White)
Newsgroups: comp.sys.ibm.pc.misc
Subject: Re: LEGALITY OF SELLING SOFTWARE
Message-ID: <10799@scicom.AlphaCDC.COM>
Date: 24 Feb 91 23:37:19 GMT
References: <70478@microsoft.UUCP> <6834@rsiatl.Dixie.Com> <70762@microsoft.UUCP>
Organization: The WhiteStar Corporation
Lines: 27

In article <70762@microsoft.UUCP> fredf@microsoft.UUCP (Fred FREELAND) writes:
>I'm sure that we can all rationalize big companies like
>Microsoft absorbing those costs, but little guys who put out quality products
>can't absorb them. They often just quit producing software because they just
>can't recoup their investment in research and development. If they don't quit,
>they do jack up the price to offset the lost profits. 

That is not really how it works (well, most of the time).  A new software
program tends to be underpriced to capture market share (Quattro Pro,
dBase IV 1.1).  Then, once it has a good share of the market, they jack
up the price (dBase III plus, Applause).  Microsoft didn't follow the
strategy with OS/2.  OS/2 did not catch on.

All of this falls apart when program is not a commodity, i.e. is a 
one-of-a-kind program.  In that situation, the first company out with it
sets the price, and the 'me-too' companies price based on the competition.

It is always a mistake to low-ball your competition, unless you have that
killer-app that is sure to take over the market by osmosis, somehow.




-- 
Robert C. White, Jr.          Right lane of .signature closed, merge left
The WhiteStar Corporation 					/\/\
rcw@scicom.alphacdc.com       The Owls are not what they seem. /    \