More than one commenter to recent posts has trotted out the same tired old myths that, in their view, prevent [insert current owner of Delphi here] from being able to compete fairly on the pricing front. Some of these myths are as old as the Enterprise Customer thinking that is the real problem, and just as stale, not having been updated to reflect current circumstances.
But First: Where’s Sugar ?
The promised post on Sugar and Oxygene is coming, but getting up and running with it to the point of being able to blog about it has proven a little less straightforward than I had anticipated.
Now, for those myths.
Myth #1: Microsoft Give Away Their Dev Tools
This is simply not true.
Visual Studio is a little cheaper than Delphi and quite a bit cheaper than RAD Studio. The Microsoft NZ $ price for Visual Studio Pro is NZ$990 vs US$999 for Delphi, for example.
Worth noting is that if there is upgrade/renewal pricing for Visual Studio as a stand-alone product, I can’t find it in the current Visual Studio store.
Adding an MSDN Subscription makes Visual Studio significantly more expensive, as are the renewals as compared to Delphi SA, but you get quite a bit in return and being a content subscription rather than a maintenance agreement, what you get for your subscription/renewal is immediately tangible and predictable.
Yes, there is Visual Studio Express which is free. But if Visual Studio Express was all that any and all developers ever needed from Visual Studio then the very real, very expensive Visual Studio Editions wouldn’t even exist.
I wonder, is the MS developer community rife with Visual Studio Pro subscribers bitterly complaining that those Visual Studio Express users are some sort of free-loading ingrates that just wanted a cheaper edition of Visual Studio for themselves rather than paying their dues ?
Or do they perhaps see those Express Edition users as the future Pro subscribers ?
Myth #2: Microsoft Force You to Develop For SQL Server, Exchange etc etc
I had honestly not seen this flatly nonsensical assertion before, but since it seems to exist in some people’s minds then it needs to be examined.
The only thing I can think was in the mind of the commenter making this claim is that when you take out an MSDN subscription you get a lot of Microsoft technology included for the specific purpose of developing applications. SQL Server, Windows Server etc.
Would MS like you to develop applications that demand these technologies ? Probably. But how many people buy Windows Server/SQL Server specifically to run an application compared to the number of people that buy specific applications because they run on the Windows Server and/or SQL Servers they already use ?
In any event, are you forced to develop only applications that demand these other technologies ?
Of course not.
Myth #3: Microsoft Give Away Tools To Undercut The Competition
This I think is the crux of the problem, betraying the tendency to jealous resentment that seems to characterise the thinking behind these myths.
Microsoft really don’t care whether they “beat” Delphi or any other Windows development tool. What they do care about is that people are developing Windows applications, and to facilitate that they make developing for Windows attractive.
Microsoft want Windows developers to sustain Windows. A free/cheap edition of Visual Studio is one way to recruit people to that cause, and is something that has only really been available since other, free/cheap alternatives have appeared and become a significant presence. Not alternatives to Windows development, but alternatives that – from Microsoft’s perspective – risk recruiting developers to platforms other than Windows.
The same is true of Google with respect to Android of course, and Apple and their iOS and OS X platforms.
Myth #4: [competitor] Has Other Revenues, [current Delphi owner] Does Not
This one isn’t so much a myth (although in one respect it is *), so much a complete irrelevance.
Yes Microsoft has other revenues. Yes so do Apple. And Google, obviously.
What about RemObjects ? SmartMobile Studio ? And numerous others that could be mentioned.
Where are the significant other revenue streams for these companies ?
Certainly RemObjects has other products, but the idea that these are comparable or on a scale with those enjoyed by the likes of Microsoft, Apple and Google etc is of course just as ridiculous as the idea that the RemObjects developer tools “division” is a loss leader driving sales of their other products.
Yet they manage to produce a development tool for not one, not two, but three platforms (.NET, Java and Cocoa – more if you break out mono and Android from .NET/Java and consider iOS and OS X as separate from the Cocoa umbrella) and at a price that is lower than the “Mobile Add-on” which adds just two (and only two) platforms to a product which costs twice as much again at the outset.
This excuse for the pricing of Delphi started in the Inprise era and, like the pricing strategy that really started at that time, hasn’t really been updated since.
* The myth of course is that Embarcadero does not have other revenues. Where did they get the $30m from to buy the CodeGear products in the first place ?
Myth #5: Pay A High Price Once or Give Up A Cut Forever
This is a relatively new one, with the advent of the app store model.
There seems to be a perception that the choice is as simple as this: That we either have to accept a high, initial price for our developer tools or give up a significant percentage of the sales of our products forever, in exchange for a lower price.
This is nonsense of course.
First of all, the percentage taken from sales of apps through the Google/Apple stores is not in exchange for free/cheap developer tools. It is for services rendered.
Xcode and the developer program subscriptions are the same price (free and $100 respectively) whether you are developing for iOS or OS X. OS X has an app store but you aren’t forced to use it. As far as I know, you aren’t even forced to use the store for iOS if your app is an Enterprise app as opposed to a commercial one.
And even if it is a commercial iOS app or you choose to distribute your OS X app through the store, it’s not as if you don’t get something in exchange for the 30% of revenue that you “give up”.
You aren’t “giving up” that revenue at all. You are paying it, in exchange for:
- Distribution and update infrastructure
- Marketplace with product presence and ratings
- Payment processing
Is it really unreasonable to pay for these services ? Is the app store model uniquely draconian ?
If you sell products through any form of distribution channel, the eventual customer will be paying more to the reseller than the reseller pays you, representing a cost of sale per unit to you.
Marketing, or even simple hosting for promotional content (or direct distribution if you are cutting out the resellers) is rarely, if ever, free and will often have a minimum base cost to be recouped through 100% of some initial number of “sales”, as well as scaling costs associated with increased volumes (traffic) if you do particularly well. Costs which you can average out per transaction only after the fact and may never recover entirely if this channel doesn’t prove effective.
Payment processing is never free. If you take credit card payments or even PayPal payments, there will be fees to be paid.
But further than that, even if you pay a high initial cost for your tools you will still have these costs to deduct from your revenues if your product is to reach any sort of market.
And again, there are other companies that manage to produce tools at a reasonable price that do not “clip the ticket” on any sales arising from the efforts of their customers. The benefit they gain is by those customers continuing to be customers.
Myth #6: There Is No Easy Solution
Yes there is. Possibly many different solutions in fact. But they require a change in thinking. A different mindset. And that is where Embarcadero seem singularly unable or unwilling to apply themselves.
At the highest level perhaps, the various options fall into two distinct groups:
- Free/Cheap entry level product properly distinguished from the higher priced editions. Let’s call this the “Visual Studio Model”
- An upgrade subscription model where you pay a single annual fee entitling you to upgrades to a perpetual license. Let’s call this the “Xcode Model” (since with Apple your ability to productively develop is contingent more on your annual subscription to the relevant Developer Programs than it is on Xcode itself, which is free).
Yes, Visual Studio with MSDN is essentially a subscription model as well. Would you look at that ? Microsoft actually have feet in both camps. It’s almost as if they actively think about pricing and how to make it work for them, instead of just relying on some uniquely comfortable position and sticking dogmatically to an outdated mindset!
This post has been what my detractors would no doubt characterise as “negative”, despite the fact that the intention is not to be negative toward Delphi/Embarcadero but to illustrate why some of the fatalistic thinking in this area is flawed.
For that is the real negativity I think: to believe that nothing can be done and that people just have to suck it up, get onside and stop complaining.
So next time (or possibly the time after that, depending on how I get on with Sugar) I shall revisit my proposal for a Community Edition of Delphi, and look at exactly how and why I think Starter fails to meet this need and what I think could be done to fix that.