All economic incentives for the past 20+ years have been away from "personal" computing because people flatly refuse to pay for software but for whatever reason have less aversion to paying for services.
I have to repeat just to emphasize how irrational this is.
People will refuse to pay $50 once for software but will happily pay $20-$50 per month for a service that offers less performance, no privacy, worse security, no continuity if you stop using it, fuzzy ownership of your own data, and a system that utterly vaporizes if the company goes away.
The aversion to paying for software is intense too. People will happily sign up for SaaS but will go through insane contortions to pirate software or just flatly refuse to use it if it's not capital-F FOSS. Even OSS that you pay for is not okay. The most important thing about FOSS is not freedom, openness, or source, but "free" as in beer... but this same aversion to paying does not transfer to services.
People will also pay $10+ dollars for a single cup of coffee at Starbucks every day. But god forbid they pay that much once for an app they use every day.
I was just about to upvote you until I got to the part where you start trashing FOSS users as unwilling to pay for software. This is a long-time lie of the Linux-hating Win-Troll crowd, since at least the Steve Ballmer days of Microsoft, and patently bullshit. I've personally paid for more (FOSS and closed-source) software since switching to using mostly FOSS software than during my many years as a proprietary software and MS Windows user, and I'm not alone in that. Humble Bundle proved (before they removed public bundle purchase statistics from their website) that Linux users are not only willing to pay for software, but are often willing to pay more for decent software than any typical Windows user will (and most Mac users, too). We also tend to understand and respect software licenses more, and are generally unwilling to freely sign away our freedoms as easily. Problem is that most folks outside of the FOSS community too easily confuse free of cost and free as in freedom, and assume that the only reason people would use FOSS is because it's often free to download and use. Freedom is the reason I use it, and the fact that it's often also free of cost (even though I still pay for some of it) is just "icing on the cake" as the old saying goes.
Yep. The move to free software was about much more than the price. Pay for MS Office. Use it on the one machine it was authorized. Need to reinstall? Hope you kept the authorization code. Want to access your data outside of MS Office? Sucker. You stuck it all in their (at that time) proprietary formats. You bought a laptop? Great. Now you can buy another copy of MS Office to go with it.
I've been a FOSS user since 1993 and am totally willing to pay for software.
Here's the problem: any license that attempt to require businesses to pay for software or that restricts for-profit SaaSification tends to be rejected by the FOSS community. The AGPL is the closest we have and it doesn't really do that even it gets a lot of hate in FOSS circles.
Without such concerns being addressed in the license it's impossible to put any kind of direct simple business model behind open source software. This means that almost all businesses opt for a SaaS model where it's easy to charge or find other roundabout ways to "charge" such as harvesting user data.
TL;DR: the software market has structurally organized itself so as to almost rule out business models other than SaaS and surveillance.
Commercial, perpetually licensed software isn’t always free of future cost. Even if it’s only $50 today, you might also be on the hook for:
* Mandatory upgrades when v1 ceases to receive security patches.
* Mandatory upgrade of dependencies when a new version drops support for, e.g. an old OS version.
* Having to buy a replacement anyway when the vendor walks away from supporting the software (and why wouldn’t they? They’re not being paid any more).
* Or alternatively, the vendor doesn’t walk away from support, but charges you for it (effectively becoming SaaS anyway).
* The cost of running your own hardware to run the software. Dropbox is the obvious example of this - redundant offsite storage hardware is a hassle that you can outsource with the SaaS option.
> People will also pay $10+ dollars for a single cup of coffee at Starbucks every day. But god forbid they pay that much once for an app they use every day.
If it's any comfort, I made that calculation and decided not to sweat it, but purchase any app costing less than ~10 with about as much thought as I'd give to buying coffee.
I feel similarly, if I see a mobile app that I think might solve my problem and it's low single digits, it's practically an impulse buy. If it doesn't work out, I don't feel used.
I've also happily spent $15 on an iOS app before because it was really good at what it did.
It made me wonder if there's a really great market out there for an incredibly well done niche mobile app you could charge $99 or more for. A whole lot of customer service problems disappear when you preemptively disqualify the uncommitted...
Some of the apps put out by the Omni group fall somewhere in that ballpark depending on which edition you purchase.
If a product is truly top tier, I’ll definitely consider paying a higher sum. I’ve sunk plenty into the Omni* suite over time (although I do wish they’d iterate a bit faster on OmniFocus…Todoist is pulling ahead, but I digress).
> People will refuse to pay $50 once for software but will happily pay $20-$50 per month for a service that offers less performance, no privacy, worse security, no continuity if you stop using it, fuzzy ownership of your own data, and a system that utterly vaporizes if the company goes away.
Daily reminder for HN that if the service you buy is an ongoing service then paying once doesn’t work. If the company has a monthly expense related to servicing you, it makes sense to have a monthly payment to them. Dropbox et al. can’t be “buy once” because that’s not how the cost of data centers work.
We can always trust HN to blame the (l)user rather than the businessmen. Even to blame “markets” rather than to blames businessmen.
It is of course unfathomable that any businessmen might have leaned into and promoted this current model. They could have never have sought out to leverage free product+network effect in order to build their business on user data. They would never. They are after all just businessmen, mere puppets of the depraved luser.
You are right but both are right. The market and the user pushed the idea of free as in beer (confusing it with freedom) and businesspeople were happy to do everything you describe.
>People will refuse to pay $50 once for software but will happily pay $20-$50 per month for a service
Define "people." Just because the average Joe racks up credit card debt and buys lottery tickets because they are bad at math doesn't mean that there isn't a market for wise consumers.
I am the exact opposite of your equation and flat out refuse to subscribe to anything that clearly doesn't need to be a service. (and tend to avoid the unnecessary application of a service model to SW)
>All economic incentives for the past 20+ years
...for the mass market that VCs tend to target.
And yes, I get where your data points are coming from, but there is a pendulum and no matter how rockstar your customer success folks are, the churn is going to ramp up as the pendulum swings back. (IMO of course)
Is a cup of coffee at Starbucks really $10+ these days? I know that place is expensive, but has it gotten that expensive without me noticing?
The thing I would primarily challenge is the assertion that this is fundamentally irrational behavior.
Software is a means to an end. People don't spend money to acquire software, they spend money to solve a particular problem.
There are two things that come to mind about subscriptions vs. the standalone pricing models of the recent past:
1) Before I'm willing to pay, you need to prove to me that your software will solve my problem. That proof doesn't come by installing the software, it comes after I've used it long enough to see if it does what I need it to do. Time or feature-limited trials attempted to solve this, but in a time-limited trial, I might solve my problem within the time period and never need to buy it (think unzipping a file). Or in a feature limited trial, I might get the general sense that the thing will work for me, but the software now holds my problem hostage, and I think there's a psychological component to why that feels "bad".
2) Sufficiently advanced software will be proportionally expensive, and out of reach for the average person. For this, I think about apps meant for writers, media and content creation, password management apps, etc. Apps that provide tremendous value, and therefore could command a high price, but now the average user is priced out.
Subscriptions provide two things:
1) A feeling of safety coming from the fact that I can both use all aspects of the software, but also choose to just cancel the thing if it doesn't work or me.
2) The ability to spread out the cost over time. Maybe I can't afford $1,000 for <media creation software of choice>, but I can afford $20/month right now.
You might argue that someone good with their finances should realize that they will eventually pay $1,000 either way, and eventually more, and they should just drop $1,000 now, but that is also a somewhat privileged position that most of us in the SW industry get to enjoy.
It's also rational to opt for a solution that is lower risk, i.e. spending $1,000 for something that might not solve my problem could be considered irrational.
I generally agree that people continue to struggle with the idea of paying for software. But I don't think that's fundamentally the problem. What people really want is a service that just handles their problems for them, and the software is just a means through which they interact with that service. The fact that people are willing to pay for services at least tells us that people are willing to pay for something. This is a hint that the model might be the problem, not the fact that money is involved.
And I think this is what has ultimately led to the change in licensing models for apps like 1Password.
I think that we as a development community need to accept the maybe uncomfortable truth that continuing to try to sell software in the traditional ways is itself irrational. It's the ultimate "the user is using it wrong".
This is not a phenomenon that is unique to software either. Just look at the popularity of low-friction installment plans for purchases of many physical products. It's common across most major retailers to either plop down your $1,000 now, or sign up for monthly payments to spread it out over time.
For the same reason all streaming services and game storefronts don't provide a generalized API to be used with 3rd party front ends. They all want to pretend that they are the only service you'll ever need/use, and their UX isn't designed for practicality, it's designed for marketing.
I have to repeat just to emphasize how irrational this is.
People will refuse to pay $50 once for software but will happily pay $20-$50 per month for a service that offers less performance, no privacy, worse security, no continuity if you stop using it, fuzzy ownership of your own data, and a system that utterly vaporizes if the company goes away.
The aversion to paying for software is intense too. People will happily sign up for SaaS but will go through insane contortions to pirate software or just flatly refuse to use it if it's not capital-F FOSS. Even OSS that you pay for is not okay. The most important thing about FOSS is not freedom, openness, or source, but "free" as in beer... but this same aversion to paying does not transfer to services.
People will also pay $10+ dollars for a single cup of coffee at Starbucks every day. But god forbid they pay that much once for an app they use every day.
Markets are incredibly irrational.