The Price Curve

by Charles Miller on October 11, 2002

Dave Johnson on the price/quality curve:

Let's talk about you. What do you think? Is there any truth to my theory? Am I totally wrong about this? Is there any insight here, or am I just being petty? Does the ROI of the big expensive enterprise software make it the most valuable of all, quality be damned?

Big expensive enterprise software occupies a completely different sphere of existance compared to consumer products such as Photoshop or Visual Studio. Since I've previously used Websphere as an example, and my employer sells Websphere, this time I'll pick a completely different product to talk about that I've dealt with, but have no financial interest in: SAP.

SAP qualifies as being really big, expensive software for which you need a team of consultants just to install. It doesn't hold a lock-in position on the market, but people continue to use it. There has to be a reason that this doesn't matter, otherwise SAP would have a competitor with a one-click installation procedure. That's how the market works. SAP requires a similarly big team of consultants to customize, but there has to be a reason this is necessary, otherwise SAP would have a competitor with an easier customisation system.

The answer is that there is no way that SAP could possibly, ever come up with a product that could fit even a single business. SAP isn't an application you can just plug in to a business. It's not like Quicken or MYOB, which are sold to companies small enough to be able to mold their business processes around their accounting software. While SAP (arguably) delivers a very valuable framework into which you can encode business processes, in order to get SAP to do anything worthwhile for your business you are going to have to do complicated things with it. And as programmers, witnesses to a thousand failed attempts to “dumb down” programming, we know that in order to do complicated things, you need to employ skilled people.

If you're going to have to employ very skilled people to get your appserver, e-commerce suite or ERP package to fit in with your business, then the additional overhead of having said people perform installation, and deal with the niggly annoyances of the product's user-hostility is only a very small fraction of their total cost. If you're hiring these guys for six months, and it'll take one of them two days to set up the software right, it's not really a competitive advantage for another product to have a really simple installation procedure.

Crappy development tools, on the other hand, I could rant about for a long time. If you have development tools that suck, you move from your expensive developers losing a small, fixed amount of time on the inefficiencies, to losing a proportion of every day you're paying them for wrestling with the product. At that point, I start wondering what the hell is wrong with some people.

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