Discussion Forums > Technology
Apple releases new... everything
furuoshiki:
Which is why I re-iterate PLAY BIG OR GO HOME. :-\
You know you are playing with big dogs that are capable of getting the best. This is why the software companies that are most versatile set their prices high because there is a price premium for versatility (since it makes you less reliant on consistent updates which means less long-term revenue for the software company.) They know the big dogs will pay top dollar for low aggregate costs in the long-run.
However, with government intervention this can all change and this price-setting can be put to an end, allowing younger companies to utilize experience curve effects and be competitive in the long-run. But as a small firm you have to know WHEN and WHERE to be cheap.
Part of being cash-strapped yet smart about it is knowing when you have to cough up the big bucks to prevent you from having to cough up even more cash later on. There is no possible way that there is such a grandiose difference in choices for application suites for firms.(10K vs. 200K???) Perhaps if you gave a realistic example then I could visualize it more.
Let's say Marks Gears LLC needs an application that will enable it to index all of it's inventory in real time. It will cost 10K for a custom program and 50K for a more universal one. Aggregate cost over 5 years will end up being 200K for the lower priced one while costs will only be 100K for the one that is 50K upfront. Marks Gears has a goal of over-taking Barry's Gears LLC in the next 5 years. Marks decides that cutting costs is most important than future planning to get over his competitor so he takes the 10K application.
Barry's gears decides to take the risk of paying for the 50K one in an effort to gain a long-term advantage over Marks and other competitors. The "X" factor: As it turns out 3 years later a valuable update appears in the 50K application that makes inventory checking almost 200% faster. For Marks this update is not available. For Barry it will only cost 10K to update. At the end of 5 years Barry only ends up spending just under 100K while gaining a valuable increase in sales due to using the higher efficiency program.
Marks has spent over 200K and now faces a huge problem, because not only has he fallen behind Barry, but now Barry wants to buy him out. The"Y" factor:(Apparently the people who made Barry's software said that they could easily merge all of Marks information into Barry's database in the event of a buy-out; However, the reverse would never be true.)
Game Over Marks.
Note: There is no "X" or "Y" factor in Marks application because it is limited, outdated, archaic and therefore a dead weight.
Adapt = Survive
Stagnate = Die
Using programs that cannot merge, or be flexible as a small business = SUICIDE!!!
Part of competition is long-term strategic action. If a firm is not capable of this you can kiss them goodbye!!!
They say something like only 25% of firms survive past the 1st year. That number becomes 5% towards the 2nd year. Then it becomes 1% around 5 years. Perhaps those 1% are the ones thinking long-term???
blubart:
are we talking about the real world or some imaginative world? cause the reality definitely isn't as simple as you are proposing it here ;)
i could easily pull 3 examples out of my ass where the one with the initially cheaper program "wins"
furuoshiki:
Man I tried to be as realistic as possible, this is a slight deviation of a scenario I encountered in real life but it was with auto-mechanics and electronic systems that they used to analyze car damage. But I guess it wasn't convincing enough :(
bloody000:
go, go kill COBOL, tell them to switch to Java or something. ::)
zherok:
--- Quote from: furuoshiki on May 28, 2009, 10:37:21 PM ---PLAY BIG OR GO HOME.
--- End quote ---
What is with you and cliches? =/
I agree that your example is too simple. You're assuming that the costs of future proofing are always made up in the long run, and that it's always possible to know what to future proof against in the first place.
Navigation
[0] Message Index
[#] Next page
[*] Previous page
Go to full version