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NSF Wants To Know How Much Software Really Costs

CmdrTaco posted more than 3 years ago | from the tree-fitty dept.

Education 181

eldavojohn writes "It's no secret that the actual cost of software is very complicated. Sure, the companies that write software are spending money on it, but when that software is released, it doesn't stop costing money. You can probably think of a number of relatively tiny things that add up — especially if you're a system administrator — like the man-hours spent patching software to avoid a nasty infection spreading quickly. The bigger debt is that old piece of software you paid a bunch of money for back in 1998 that you're critically dependent on, but it has no support and hasn't been updated in years due to any number of reasons. Well, the National Science Foundation paid Gartner almost half a million dollars to find out what it truly costs to bring an organization to a fully supported environment. According to Gartner, this hidden liability or 'IT debt' is at $500 billion worldwide right now, and in five years it will be at $1 trillion. Along similar lines, a company called Cast that makes software quality tools reported that your average business application comes with a million in IT debt (PDF). And if that's not misapplied enough for you, they estimate that the debt is $2.82 per line of code in the application and also that it's on average higher in the government sector."

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Who needs karma? (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#33858598)

I have five modpoints. Respond to this post, and I'll mod you up.
 
--drinkypoo

Re:Who needs karma? (0, Offtopic)

tsa (15680) | more than 3 years ago | (#33858690)

Nice joke. If I say something completely bullocks I get one point from you and -4487564 points from other moderators. If I say something insightful or whatever, adding valuable content to the thread I get my positive modpoints from everybody and don't need your pityful one point ;)

And bloody hell, now I have to wait 5 minutes before clicking 'Submit' because of /.'s annoying posting rules. That annoys me no end.

Re:Who needs karma? (0, Troll)

MichaelKristopeit 16 (1916820) | more than 3 years ago | (#33858792)

you are NOTHING.

Re:Who needs karma? (0, Troll)

Shikaku (1129753) | more than 3 years ago | (#33858898)

You are BOT. Assimilate, Assimilate!

goddamn that's a stupid commercial. (0)

Anonymous Coward | more than 3 years ago | (#33859536)

yeah, but was he voted "voted #1 vodka of 2033" ?!

Re:Who needs karma? (0)

Anonymous Coward | more than 3 years ago | (#33858894)

I have five modpoints.

Big deal. I have fifteen (posting Anon so I can mod comments in this story later).

Turns out I don't understand how the system works, after all. I see something in the FAQs about having 10 points instead of 5 for being a good moderator, so I don't know if this is a bug (adding 10 to 5 instead of replacing 5 with 10) or if something changed more recently than the FAQ entry. The last time this happened (the first time I had 15 points), they were still set to expire in 3 days, and the system let me use them all normally. Not sure if I can ever remember having just 10 mod points to begin with.

Anyway, point is, someone needs either to squash a bug or to update the moderation FAQs.

If no one would sopy software illegally (3, Funny)

tsa (15680) | more than 3 years ago | (#33858606)

It could cost $5,- per game and people would still make big profits. Illegal copying drives the price up, however.

Tired old argument is tired and old (0, Redundant)

Anonymous Coward | more than 3 years ago | (#33858682)

No, unauthorized copies of software are not driving prices up. Prove that the users of those unauthorized copies would have paid for an authorized copy, and you might have a case.

Why must we repeat these arguments over and over again?

Re:Tired old argument is tired and old (3, Interesting)

ciderbrew (1860166) | more than 3 years ago | (#33858766)

Learning on unauthorised copies enables companies to hire a person with the needed skills. The company then buys the software that the sole person could not afford. So unauthorised copies increase sales at the corporate level.

/The argument may not work for games software sales.

Re:Tired old argument is tired and old (2, Funny)

Hognoxious (631665) | more than 3 years ago | (#33859012)

Learning on unauthorised copies enables companies to hire a person with the needed skills. The company then buys the software that the sole person could not afford.

tsa (15680) said "It could cost $5,- per game". Do you know anyone looking for an experienced TAK fortification architect/ballistic synergist?

Re:Tired old argument is tired and old (1)

tnk1 (899206) | more than 3 years ago | (#33859114)

Do you know anyone looking for an experienced TAK fortification architect/ballistic synergist?

No, but goddamn that sounds like something I should put on my resume.

Re:Tired old argument is tired and old (1)

shadowrat (1069614) | more than 3 years ago | (#33859634)

somehow i think most companies aren't eagerly looking for someone with extensive bioshock play time either legally purchased or pirated.

Re:Tired old argument is tired and old (1)

ciderbrew (1860166) | more than 3 years ago | (#33859820)

That would be the bit of the argument may not work for games software sales.

Re:If no one would sopy software illegally (2, Interesting)

AvitarX (172628) | more than 3 years ago | (#33858714)

Yes because things like:
like the man hours spent patching software to avoid a nasty infection spreading quickly would go away if there was no piracy.

I would actually argue the maintenance costs are down for things people pirate, as admins with real world experience or even just familiarity from dicking around at home, are easier to find.

Re:If no one would sopy software illegally (2, Funny)

CarpetShark (865376) | more than 3 years ago | (#33858782)

Illegal copying drives the price up, however.

--
There. I said it.

No, you regurgitated the meme without any awareness that you're a memetic breeding ground.

Re:If no one would sopy software illegally (0)

Anonymous Coward | more than 3 years ago | (#33859084)

Illegal copying drives the price up, however.

--
There. I said it.

No, you regurgitated the meme without any awareness that you're a memetic breeding ground.

Slightly different than the T-1000, he's a poly memetic ally. [sic]

Re:If no one would sopy software illegally (2, Interesting)

ComputerGeek01 (1182793) | more than 3 years ago | (#33858832)

I think you're ignoring about half of the equation. You see when someone wants to sell something, no matter what it is or what it cost them, they want to sell it at the highest point possible in order to make the most money, this is called the Price curve. This is only mitigated by something called the Demand curve which is what people are willing to pay for the item. Where these two points meet determines the price.

The market has already determined what people are willing to pay for games, the cost of production of the game does not factor into the Price vs Demand chart. Driving costs down only means more money for the producer, and possibley increased competition due to a lower entry point into the market but this would likely only open a secondary market of "cheap games" leaving the "Million Dollar" productions priced where they are.

Re:If no one would sopy software illegally (3, Insightful)

ScrewMaster (602015) | more than 3 years ago | (#33858896)

It could cost $5,- per game and people would still make big profits. Illegal copying drives the price up, however.

Ha, I notice you got modded "Funny" which is appropriate in this context. This is about support costs, not sales prices, and there are very, very few companies that will provide support for unauthorized copies of their software. Do you work for the BSA, by any chance? That's the kind of out-there comment I would expect from them.

But okay, just to roll with it: do you honestly believe that the majority of software outfits would dramatically lower their prices if (ahem!) "piracy" dropped to zero? Of course they wouldn't. It's whatever the market will bear, baby. Matter of fact, they'd probably claim increased losses due to piracy and increase their prices even further. Yeah, there's dishonestly and sleaziness on both sides of this particular issue. Now, I will agree, a certain percentage of those who acquire software products illegally might have purchased said products if they were not readily available for free. But that number is nowhere near 100%, which is one of several fundamental flaws in the arguments put forth by the RIAA, MPAA, BSA and the like.

Re:If no one would sopy software illegally (2, Insightful)

vlm (69642) | more than 3 years ago | (#33859222)

This is about support costs, not sales prices, and there are very, very few companies that will provide support for unauthorized copies of their software.

You meant to write:

very, very few companies will provide support for their software

The only "support" I get for any software is free (except my labor) from google.com. I don't need to pay hundreds/thousands for some guy in India to read me a script telling me to wipe the drive and reinstall, which after some decades of experience is all I now expect.

Re:If no one would sopy software illegally (1)

Binestar (28861) | more than 3 years ago | (#33859484)

You're not using the type of software they are trying to figure out the price for then. Software such as AdvantX (A medical software package) or Siriusware (A POS system used commonly by Theme parks and Ski Resorts and other places where they have ticket tracking/rentals/etc). Call either of those companies for support and you actually get quality support.

Re:If no one would sopy software illegally (2, Insightful)

ScrewMaster (602015) | more than 3 years ago | (#33859740)

You're not using the type of software they are trying to figure out the price for then. Software such as AdvantX (A medical software package) or Siriusware (A POS system used commonly by Theme parks and Ski Resorts and other places where they have ticket tracking/rentals/etc). Call either of those companies for support and you actually get quality support.

Yes. You'll mostly see that in vertical-market apps which serve critical business functions, have a limited market, and cost a lot of money. They also usually have support contracts, so you're paying for that support on top of the actual cost of the software itself. Consequently, they damn well better provide good service.

Re:If no one would sopy software illegally (3, Insightful)

sjames (1099) | more than 3 years ago | (#33859642)

More probably, they would increase the price until piracy returned.

Re:If no one would sopy software illegally (0)

Anonymous Coward | more than 3 years ago | (#33859786)

More probably, they would increase the price until piracy returned.

Yeah, good point.

Software cost = programmer's salary (1)

nbauman (624611) | more than 3 years ago | (#33858626)

That doesn't sound too bad.

Re:Software cost = programmer's salary (1)

Gorobei (127755) | more than 3 years ago | (#33858796)

The figure actually seems very low, though perhaps not unreasonable for medium size (400K LOC) apps.

I estimated $3-$30 per line of code PER YEAR for one big (10M+ LOC) app at a previous job.

Re:Software cost = programmer's salary (1)

poetmatt (793785) | more than 3 years ago | (#33858840)

of course the importance is realizing the opposite side of the perspective - how much money is gained from these costs?

This is the part corporations have a harder time measuring.

Re:Software cost = programmer's salary (4, Insightful)

Hotawa Hawk-eye (976755) | more than 3 years ago | (#33858834)

Software cost = programmer's salary ...
+ the cost of the computer the programmer used to write the code ...
+ the cost of the electricity to power said computer ...
+ the cost of the software the programmer used to write the code (which may be $0) ...
+ the salary of the QA staff that test the code ...
+ the salary of the documentation staff that write the documentation for the code ...
+ the salary of the HR staff that hired the programmer, QA staff, documentation staff, etc. and ensures they receive their paychecks ...
+ the rent/mortgage payment for the office where the programmer, QA staff, documentation staff, and HR staff work ...
etc.

Re:Software cost = programmer's salary (2, Insightful)

roman_mir (125474) | more than 3 years ago | (#33858910)

Don't forget about the risk and about the cost of opportunity. There is always a risk associated with any endeavor (well, supposed to be, until the gov't 'insures' something against risk and crashes the economy) and there is cost of opportunity - money could be spent on other things that really could provide more benefit for the sunk costs.

Re:Software cost = programmer's salary (0, Offtopic)

elashish14 (1302231) | more than 3 years ago | (#33859056)

Easy solution [xkcd.com]

Re:Software cost = programmer's salary (1)

PaulMeigh (1277544) | more than 3 years ago | (#33859106)

+ the cost of maintaining a support organization to answer the phone once the software is in the field

Re:Software cost = programmer's salary (3, Insightful)

grapeape (137008) | more than 3 years ago | (#33859140)

That would be nice and is how business used to be...but now its more about investor profits...then the rest of that stuff. Society has created an unsustainable monster of necessary yearly increases in revenue. Its no longer about generating a nice profit and making a decent living. I really think its a mind set that is beginning to come back to bite society in the ass though. Look at any main street in any small town and its pretty evident that we're in trouble. In the town I live the corner grocery store shut down when they just couldn't compete with the conglomo grocery store moved in less than a mile down the road, then the drug store that had been in business for over 8 years closed down when CVS and Walgreens decided to both move in right next door to each other in the same area as the big grocery store. Supporting businesses around them like the bakery/donut shop, appliance store, mom and pop book store, pet store, etc have all been replaced by big corporations down the road. The argument has been that it created jobs, but most of the jobs are paying far lower than the small stores and services paid that were vacated due to their demise. Business is supposedly booming the new "central" part of town sure has lots of familiar stores and restaurants but the funny part is the per capita income of the town has dropped significantly over the past decade or so since this change started. Do I think Wal-Mart needs to die? NO...but I do think in many instances the "convenience" the corporate world brings does more harm than good over the long term. Sadly I think its too late to really do anything about it.

Re:Software cost = programmer's salary (4, Interesting)

ObsessiveMathsFreak (773371) | more than 3 years ago | (#33859290)

Which all pales in comparison to....

+ the cost of managements bonuses.

Re:Software cost = programmer's salary (1, Insightful)

Anonymous Coward | more than 3 years ago | (#33859446)

+ the cost of the marketing department who make sure that you write software that someone will want to buy
+ the cost of the sales department who make sure that people actually buy it
+ the cost of the financial department who make sure that people actually pay for it and that your company's bills are paid on time thus keeping the electricity on.
+ the cost of the provisioning/deployments department who ensure that your customers can get what they've paid for.
+ the cost of the operations department who ensure that other systems that your software relies on are running 24x7
+ the cost of the support department who resolve customer issues keeping them happy and more likely to buy more or recommend your products to others.

Your post is exactly the reason why most developers hit a career ceiling. You're unable to see much of anything beyond your own cubicle. You don't even understand what QA do. (Testing is a small part of the role, and about the least important factor in creating quality software).

Re:Software cost = programmer's salary (2, Insightful)

KingMotley (944240) | more than 3 years ago | (#33859504)

You forgot:
Corporate taxes.
The salaries for the accountants, the sales/marketing guys, managers, and executives.
Advertisements (email, radio, tv, magazines).
Normal office equipment (Phones, Email, firewall, desks, chairs, pens, paper).
Website for support/advertising/patches.
IT support staff to keep the network, email, firewalls, anti-virus, and patches going.
Network equipment (Switches, routers, firewall, internet connection).
401K matching, partial subsidized office perks (gym membership, etc).
Interest paid on the money fronted by investors/loans.
Most likely a conference room for company meetings, sales pitches, etc.
Sales/Marketing expenses (trips, meetings, persuasion/entertainment monies).
Legal Fees (Trademarks, Contracts, lawsuits).
Possibly head hunter/placement fees associated with hiring your programmers, QA, HR, Financial staff.

Probably a ton more as well.

Re:Software cost = programmer's salary (0)

Anonymous Coward | more than 3 years ago | (#33859778)

+ marketing

That's a huge cost. Doesn't matter if you have the greatest game in the world if everyone is busy playing something else.

Re:Software cost = programmer's salary (1)

TheRaven64 (641858) | more than 3 years ago | (#33859834)

Irrelevant. Most software (around 90%) is developed in house and either not distributed, or distributed only to a few companies who request it. Money is made using it, not selling it.

Re:Software cost = programmer's salary (0)

Anonymous Coward | more than 3 years ago | (#33859814)

If people knew the real cost of software, we'd all go back to abacuses.

Every time someone screams "Just Git 'R' DUN!" or "All You Have to DO Is...", another set of hidden expenses lines up waiting to make themselves felt at exactly the wrong moment.

And any cost estimates based on the amount of work the developers think they have to do is going to actually come to at least twice that much. And that's if they're giving the numbers voluntarily. If you squeeze them to provide more "realistic" numbers - meaning the estimates you want to hear - then expect the cost to be even higher. Because IT work sneers at estimates.

Re:Software cost = programmer's salary (2, Insightful)

morgan_greywolf (835522) | more than 3 years ago | (#33858942)

If the costs ended there, that'd be great. But they don't.

Someone has to do the requirements gathering draft up a specification. So you need a systems analyst. Then someone needs to take that specification and turn it into a real systems design. So you need a systems architect. Then someone needs to start writing code, so you need some developers. Someone needs to test all this code, so you need some testers. Someone needs to integrate all this into the existing environment and get it up and running; so you need some systems integrators. Then integration testing must happen, so you need some more testers. And, over all of this, you need at least a project manager or two to do timelines and communicate with management. Someone has to assure the quality of this system, so you need a quality assurance guy. Someone needs to maintain the system while it's running and even during development, so you need some systems administrators. Then management gets wind that all this is way too inefficient, so they hire some "Six Sigma blackbelts" to figure ways to improve the whole process by minimizing errors. They also might hire some management consultants to bring the whole team out on a retreat and give them motivational pep talks.

And after all of that, someone comes along and says "hey, you made it do this, but it also needs to do that." Everyone groans and the timeline slips.

Lather. Rinse. Repeat.

And all you wanted to do was write some damned code!

Software metrics are bullshit. (0)

Anonymous Coward | more than 3 years ago | (#33858628)

Software metrics are always a huge load of bullshit. It doesn't matter which "methodology" you choose when making such "measurements". Any time that something can be distilled down to "cost-per-line" or "errors-per-line", you can know right away that it's total nonsense.

$10,000 Per Verb (0)

Anonymous Coward | more than 3 years ago | (#33858636)

The common estimation formula where I work is $10,000 per verb. Considering all the bad / inconsistent requirements we get that sounds about right.

I think we should be able to do better, but I'm too exhausted by my job to truly care. Oh well... off to work.

And..? (3, Insightful)

Thyamine (531612) | more than 3 years ago | (#33858642)

I know companies that don't bother figuring out the 'hidden' cost of keeping their workstations or servers up to date. Then one day they realize they need to upgrade 30+ system all at once for some new piece of software they want. When they can't budget/manage/understand something as straightforward as hardware maintenance and upkeep, how are they going to understand something less physical like software 'debt' or whatever they are labeling it now.

Re:And..? (1)

cryfreedomlove (929828) | more than 3 years ago | (#33858696)

I know companies that don't bother figuring out the 'hidden' cost of keeping their workstations or servers up to date.

Why do companies still have servers? This issue largely goes away if you build you company in the public clouds.

Re:And..? (2, Insightful)

Anonymous Coward | more than 3 years ago | (#33858750)

Maybe because "public clouds" are not the answer to everything?

Re:And..? (4, Insightful)

Darkness404 (1287218) | more than 3 years ago | (#33858802)

Because what happens when the "cloud" shuts down? What happens when your internet goes down and you can't even access what should be local files? What happens when the "cloud" has a major security breach and all of the files that normally wouldn't ever leave your company are now able to be downloaded to crackers everywhere?

The Cloud is perfectly safe. (5, Funny)

Anonymous Coward | more than 3 years ago | (#33858906)

Wait a minute. I'm a manager, and I've been reading a lot of case studies and watching a lot of webcasts about The Cloud. Based on all of this glorious marketing literature, I, as a manager, have absolutely no reason to doubt the safety of any data put in The Cloud.

The case studies all use words like "secure", "MD5", "RSS feeds" and "encryption" to describe the security of The Cloud. I don't know about you, but that sounds damn secure to me! Some Clouds even use SSL and HTTP. That's rock solid in my book.

And don't forget that you have to use Web Services to access The Cloud. Nothing is more secure than SOA and Web Services, with the exception of perhaps SaaS. But I think that Cloud Services 2.0 will combine the tiers into an MVC-compliant stack that uses SaaS to increase the security and partitioning of the data.

My main concern isn't with the security of The Cloud, but rather with getting my Indian team to learn all about it so we can deploy some first-generation The Cloud applications and Web Services to provide the ultimate platform upon which we can layer our business intelligence and reporting, because there are still a few verticals that we need to leverage before we can move to The Cloud 2.0.

Re:The Cloud is perfectly safe. (0)

Anonymous Coward | more than 3 years ago | (#33859020)

You're hired!

Re:The Cloud is perfectly safe. (1)

Crudely_Indecent (739699) | more than 3 years ago | (#33859068)

Wow, that least informed statement I've read in a while. Reminds me of my old boss.

Steven, is that you?

Re:And..? (3, Interesting)

ScrewMaster (602015) | more than 3 years ago | (#33858916)

Because what happens when the "cloud" shuts down? What happens when your internet goes down and you can't even access what should be local files? What happens when the "cloud" has a major security breach and all of the files that normally wouldn't ever leave your company are now able to be downloaded to crackers everywhere?

I agree. Frankly, I don't trust anyone to host my confidential files, especially when I find that they're stored in another country. No thanks.

Re:And..? (1)

digitalhermit (113459) | more than 3 years ago | (#33859414)

The whole cloud concept is still being defined.. It's, um, cloudy....

That said, there are many reasons why some companies could benefit from the idea. For example, say that you want to build a global enterprise. Up until recently, this would take lots of money in order to have a physical "presence" in many different countries. With a global internet it's possible and it doesn't matter where the physical server is located as you can make the best use of local resources. Extend this concept a bit further and you realize that it doesn't matter where your physical server is located. Companies began to co-locate servers so they didn't need to have offices in Singapore to have a geographically ideal location for business, political, financial and even technical reasons.

The same challenges faced with local, company hosted resources are there with the cloud model. What happens when your company hosted server shuts down? what happens when your company network connections go down and your customers can't access your servers? What happens when an internal employee gets fired and sends out your customer list?

What the cloud concept can offer is reduced expense of hosting a large data center. For example, in the US land prices in areas where talent is located is generally high. It goes hand in hand. If a city is popular with technical folks then land prices will be high. The solution may be to host the personnel offices in one location and the servers somewhere in the cloud. Remember, building a data center is not a trivial thing. You need air conditioning, water, ducts, conduits in the floor, power, backup batteries and generators, fire suppression systems, etc..

No, clouds don't magically make standard IT problems disappear, but they can give a lot of flexibility in how you approach them.

Re:And..? (1, Insightful)

Anonymous Coward | more than 3 years ago | (#33858974)

Proprietary data?
Legal requirements?
Heard of PCI or HIPAA?

Have you ever worked with sensitive data at all?

You probably use Apple products too. If you deal with entertainment data, I can understand why you'd think the "cloud" is fine.

For many medium and large companies, running your own servers is actually cheaper than "the cloud." And for the last 2 of a 5 yr server life, you actually have "free" hardware. If you've ever priced Cloud contracts, you know they aren't as cheap as everyone thinks on an annual basis for core servers needed inside businesses. Sure, if you need some extra front-end servers for a marketing push, leveraging cloud systems probably makes sense. Not so much for back end databases with client data or for financial systems used by the finance and accounting and project management departments.

I have a very quick way to determine if the cloud makes sense for different types of data. If the data is placed on the front page of the NY Times, would that be good or bad for the company finances and image? What does an unintentional data release mean to the company's reputation?

Re:And..? (2, Insightful)

Crudely_Indecent (739699) | more than 3 years ago | (#33858982)

Maybe your work is so super secret that you don't want it connected to a public resource.
Perhaps bandwidth is so scarce at your location that a local server makes more sense from a performance standpoint.
Or bandwidth is so expensive at your location that a local server makes more sense from a financial standpoint.
Alternatively, you may be enamored with blinkenlights [wikipedia.org] .

Re:And..? (4, Interesting)

Technician (215283) | more than 3 years ago | (#33858774)

Many companies are transitioning to general purpose software as the features expand. High debt software is often replaced with an off the shelf solution with a much lower cost.

As examples, at home, I no longer use Photoshop. Gimp is the replacement. Open Office replaced MS Office. Natulus replaced Nero or EZ CD Creator. Ubuntu replaced Windows on most machines. I don't pay for expensive upgrades when possible. Many small companies are making the same move.

Only one machine has the MS Debt software for the few things that just have to have it. I no longer upgrade high debt software on the various desktops and laptops we use.

Ernie Ball figured this out years ago and published his story online.
http://news.cnet.com/2008-1082_3-5065859.html/ [cnet.com]

Re:And..? (1)

JonySuede (1908576) | more than 3 years ago | (#33858948)

you misread, the debt in question is into custom built in-house software. We are in the planning step of a rewrite from CA-IDEAL and Java and DB2 to Java and Oracle here at work, the cost of the preliminary study is well over a 1M$, now imagine the complete cost of the rewrite

Re:And..? (2, Informative)

zippthorne (748122) | more than 3 years ago | (#33859500)

Parent is not missing the point.

The point was this: as the library of off-the-shelf solutions grows, it's possible that what what you once had to do with custom software is now neatly covered with some vendor's standard offering, or in the parent's case, what he had to do with expensive vendors' software can now be done with even less expensive open source solutions.

Ya this is retarded (3, Informative)

Sycraft-fu (314770) | more than 3 years ago | (#33858888)

Oh you have to work to keep something up? No shit, never heard of that before. I mean our building we are in, we spend nothing on that. Well except for janitorial staff. Oh and lightbulb replacements. And roof maintenance. And new furniture. And HVAC maintenance. And elevator maintenance....

Seriously, when you buy something the total cost is never just the up front price. You don't plunk down cash and then never again have to spend any time or money for the thing to work perfectly. In some cases it may be direct monetary costs at certain points. The roof at work is a good example, we had to have it largely replaced a couple years ago. Not because of a problem, but because the building is like 40 years old. Had to pay tens of thousands of dollars to do that, which was budgeted. Some of it is indirect, just regular maintenance you have to pay someone for. Our custodial staff is a good example. While some of what they do, like say wash windows, is just aesthetic, much of what they do is necessary upkeep to keep the building in good condition. There isn't a precise dollar figure on each job they do, it is just a general cost that is their salaries. Some stuff has just a time cost, more or less. Like yesterday I dusted off my MIDI keyboard. Needed to be done both because the dust is annoying and because excess dust can work in to the electronics and cause damage.

Why would software be any different? Yes, you have to spend time and money above just the initial cost. You have to patch it, some software has yearly support contract cost (like say RHEL), you have to have support staff to make it work and help people with it, and so on.

I fail to see how this is a "debt" of any sort. It is a "cost" like any other. The more software you use, the more cost ther'll be not just purchase cost but also support cost. This is surprising to nobody who understands how this shit works. This is also why the price tag on software is often not a big deal. Doesn't matter is a package costs $50,000 whereas another costs $50. If the $50,000 ones saves $100,000 in support and other costs (like lost productivity) it is worth its price easily.

To me this sounds like the kind of thing a dumb manager would say: "You mean that price we paid for our software 6 years ago isn't the only thing it cost! Holy shit we have software debt!"

Re:Ya this is retarded (3, Interesting)

Pharmboy (216950) | more than 3 years ago | (#33859004)

This is surprising to nobody who understands how this shit works.

True, but to the average consumer (this included pointy haired bosses) the upgrades for their home computer cost $0, the software came with it new, or was a one time purchase and the updates are either free or simply not done (or both), and every few years you just buy another one and give the old one to a friend or Goodwill with all your personal information still on it.

In the home consumer world, software IS only a one time expense for most people. Unless you are the guy who is having to get permission for upgrades, and patch all the servers in a commercial environment, this is your world view because it is your reality. It is not so shocking that average Joes and bosses don't know this.

Obligatory car analogy (1)

khasim (1285) | more than 3 years ago | (#33859150)

Yeah, it isn't shocking. Mostly because I'm beyond being shocked by anything those idiots do.

If it's physical, they can understand it. They put gas in their cars. They take the cars in to have the oil changed. And so forth.

But software can't be touched. A server running the latest patches looks the same as a server without them.

Unless there is a problem in the software that they are experiencing, they don't understand it.

Not just managers. (1)

khasim (1285) | more than 3 years ago | (#33859036)

We run a lot of HP servers.

HP publishes firmware / software updates.

I'm the only person in the department that applies them to any of the servers.

"If it's not broken, why fix it?"

Re:Not just managers. (1)

Dan Ost (415913) | more than 3 years ago | (#33859750)

Don't call them "updates". Instead, say the software/firmware has been "recalled" and you've got the "fixes" from HP.

Re:Ya this is retarded (2, Interesting)

Hognoxious (631665) | more than 3 years ago | (#33859184)

I fail to see how this is a "debt" of any sort. It is a "cost" like any other. The more software you use, the more cost ther'll be not just purchase cost but also support cost.

The similarity is that the costs are ongoing, like repayments on a loan.

I seem to remember reading somewhere [1] that every dollar you spend on development costs around ten in maintenance, which is perhaps surprising: I'd wager most managers would think it's the other way round.

[1] I don't have the reference to hand. Maybe Code Complete?

Re:Ya this is retarded (1, Interesting)

Anonymous Coward | more than 3 years ago | (#33859230)

I fail to see how this is a "debt" of any sort. It is a "cost" like any other.

The "cost", when not taken care of properly, silently becomes a "debt", usually when someone wants to do some new never-thought-of-before things with the old code. Try cutting your car maintenance cost to zero for a year or so, and you'll figure it out. Oh, you already knew that's not gonna work? Sadly, there are quite a few middle managers out there who haven't got a clue.

Re:Ya this is retarded (0)

Anonymous Coward | more than 3 years ago | (#33859388)

I worked for a company that bought a building, and immediately had to put 3x the purchase price in the building, so it would no longer rain on the servers. This was known when we bought the building that significant costs would be incurred to rehabilitate it as we could see when we bought it 1/3 of the roof was missing. It was also why the building was so cheap. If we had bought a new building, we would not have expected rain on the servers.
At the current company I work for, we buy $1 million software packages every year or two, and these always need significant time and effort to get to work right. The expectation is that this is some expensive stuff, and it should work reasonably well out of the box, but the reality is "it will be fixed in the next version" The software from 6 years ago is the stuff that's doing it's job.

Re:And..? (1)

arivanov (12034) | more than 3 years ago | (#33859340)

It is nice if it is just a workstation. Imagine if it is for example a small country size phone system.

Anything that is more than 5 years old usually has unknown upgrade costs as well as unknown upkeep costs. I have never seen anything trying to deal with such a beast hit time, targets and money.

There is the answer of "continuous upgrade" of course , however explaining that to a business is often a very difficult task especially if the 30 year old system still works and generates revenue.

Did they forget about TCO? (1)

swb (14022) | more than 3 years ago | (#33859804)

Isn't this the whole TCO thing, all over again?

the submitter helps (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#33858650)

Helps to continue slashsucks demise. Try grade school grammar?

Wow, another $1 trillion we didn't know we owed (1, Funny)

Anonymous Coward | more than 3 years ago | (#33858790)

Next, the automakers will get creative and figure out the national "automotive debt" that details the long-overdue cost to update everyone's wheels to the current standards. Of course, once they do, the "debt" starts rolling again.

And don't forget the national "old charcoal grill debt".

As for IT, if everyone upgraded to the latest software that would make life easier for hackers, no? They wouldn't need to waste cycles studying the vulnerabilities of 10-15 year old applications each used by a widely scattered customer base.

Re:Wow, another $1 trillion we didn't know we owed (1)

boristdog (133725) | more than 3 years ago | (#33859164)

Exactly. The perfect software/car analogy.

Cost of new car + cost of gas + licensing and taxes + cost of regular maintenance (oil/tires/filters) + cost of unscheduled maintenance.

Of course, I still haven't convinced my teenage daughter that these costs far exceed the cost of the car itself.

Re:Wow, another $1 trillion we didn't know we owed (1)

Rockoon (1252108) | more than 3 years ago | (#33859436)

My current estimate (I have records) is about $1000/year, regardless of the age of the car, so I am not sure that "far exceeds the cost of the car" is correct unless you are talking about a used car.

Re:Wow, another $1 trillion we didn't know we owed (1)

boristdog (133725) | more than 3 years ago | (#33859752)

You don't think I bought my 17-year-old daughter a NEW car, do you?

An unfortunate choice (5, Insightful)

some-old-geek (1329305) | more than 3 years ago | (#33858794)

The NSF wants to know something about the computer industry and they ask Gartner? Gartner, the company that advocated OS/2 and I-CASE?

Re:An unfortunate choice (0, Redundant)

nacturation (646836) | more than 3 years ago | (#33859156)

The NSF wants to know something about the computer industry and they ask Gartner? Gartner, the company that advocated OS/2 and I-CASE?

To be fair, like any research group Gartner will advocate whatever you pay them to. Within reason, of course.

Cost-of-Decommit (3, Interesting)

FellowConspirator (882908) | more than 3 years ago | (#33858812)

Hehe. We had one of those IT department brainstorming sessions once (I was in research at the time) and they were talking about this shiny new platform that they were going to roll out, I simply asked what the cost was. They threw out some figures about how they priced it an it would cost X dollars to implement over Y years. So, I asked "does that include the cost of decommission?" and got blank stares all around... The notion that you estimate the cost of getting out of abandoning / migrating away from a product never occurred to them! Products tend to not be all that flexible, they change over time, and business needs and processes often diverge from the product or a better product comes along -- we have fairly good ideas on what the platform turn-over is going to look like, how open various platforms are, etc. We can estimate the CoD with some accuracy. So why don't we? We're still buying into products that are readily identified as "dead-ends" and screwed when they are no longer supported, needs change, etc.

Wrong (1)

Hognoxious (631665) | more than 3 years ago | (#33858822)

It's no secret that the actual cost of software is very complicated.

It's just a number. Calculating it is complicated.

Re:Wrong (1)

elashish14 (1302231) | more than 3 years ago | (#33859086)

No, no, no - the value is clearly complex (to avoid singularities at zero of course).

Re:Wrong (0)

Anonymous Coward | more than 3 years ago | (#33859138)

Yeah, but it has 2s and 5s in it. Those are all curvy and change direction, so they're hard to write, not like 1s and 0s.

Not to mention that dollar sign. Whew!

Push for SAS (3, Insightful)

roman_mir (125474) | more than 3 years ago | (#33858844)

Obviously software cost depends on what you measure it in. For example Linux kernel is estimated to cost near 1.4 billion US dollars (at the bottom) [dwheeler.com] , but IF you measure [kippenjungle.nl] this in chickens [costco.com] .... it could cost 35,008,752.2 chickens.

In ounces of gold [kitco.com] it would be around 1,040,041.6 ounces. In DOW [google.com] it would cost approximately 127,186

It is also possible to estimate its cost in terms of Libraries of Congress, man years and many such wonderful things, however note that many Keynesians say that gold has no value but what is 'speculated' to be value while they do not see the same thing about their cherished and printed fiat, so then we could argue that Linux kernel is worth nothing if 1,040,041 ounces of gold priced at current levels in USD are worth nothing.

It's all a matter of point of view.

Re:Push for SAS (1)

heathen_01 (1191043) | more than 3 years ago | (#33859148)

Re:Push for SAS (1)

roman_mir (125474) | more than 3 years ago | (#33859244)

You haven't seen what you thought you saw. You don't want to talk about it. You want to go have a cookie now. Cookies are good.

Re:Push for SAS (2, Funny)

heathen_01 (1191043) | more than 3 years ago | (#33859328)

Your mind tricks wont work on ... One sec ... x-factor is on ...

Slashdot Economics section (5, Insightful)

roman_mir (125474) | more than 3 years ago | (#33858884)

I wonder why /. does not have a section on economics. Isn't it long overdue to have one?

So many stories really belong in economics.

We could discuss what things are worth.

We could point out [yahoo.com] stories that appear on front pages [yahoo.com] of various portals and news sites and discuss what really is going on behind the title on them, just like the title I linked to:

Stocks Rise on Renewed Hope for Fed Action

- which sounds as if it is a positive for the economy that stocks rise on 'Hope for Fed Action', when in reality, those who understand can tell you that "Fed Action" means more money printing/borrowing, which implies more inflation and debt, so rising stocks (and rising gold) in this situation means that there is an expectation of yet more inflation, so stocks will go up in nominal terms, but all US holdings will lose more purchasing power.

Isn't /. 'news for nerds' and isn't economy yet another 'nerdy' subject?

Re:Slashdot Economics section (0)

Anonymous Coward | more than 3 years ago | (#33859048)

@roman_mir #slashdorks have no understanding of economics. might as well have a #vagina section.

Re:Slashdot Economics section (1)

roman_mir (125474) | more than 3 years ago | (#33859218)

OTOH I am sure this place is literally crawling with Anonymous Coward vaginas.

Re:Slashdot Economics section (0)

Anonymous Coward | more than 3 years ago | (#33859492)

Anonymous Coward Penis here, Looking for an Anonymous Coward Vagina...

Re:Slashdot Economics section (1, Insightful)

Anonymous Coward | more than 3 years ago | (#33859508)

Roman Mir, and our twitter troll are friends. Never would have figured.

Re:Slashdot Economics section (1)

tronbradia (961235) | more than 3 years ago | (#33859516)

I wonder why /. does not have a section on economics...

We could point out [yahoo.com] stories that appear on front pages [yahoo.com] of various portals and news sites and discuss what really is going on behind the title on them, just like the title I linked to:

Stocks Rise on Renewed Hope for Fed Action

- which sounds as if it is a positive for the economy that stocks rise on 'Hope for Fed Action', when in reality, those who understand can tell you that "Fed Action" means more money printing/borrowing, which implies more inflation and debt, so rising stocks (and rising gold) in this situation means that there is an expectation of yet more inflation, so stocks will go up in nominal terms, but all US holdings will lose more purchasing power.

Isn't /. 'news for nerds' and isn't economy yet another 'nerdy' subject?

And of course, people that know things could point out that since we're falling into a deflationary spiral, money printing is actually an attempt to stabilize inflation at its historic 2%, permitting job growth and preventing a Japan-like lost decade (currently 10-year expectations are down to 1%, which increases the expected real burden of pre-crash debts and in turn creates a money shortage and severe job losses). I could provide links but you could also just go find a macroeconomics textbook and look up 'disinflation' and 'great depression'.

I really don't need to hear the misinformed opinions of slashdotters that think they know things about economics, thx.

Re:Slashdot Economics section (0)

Anonymous Coward | more than 3 years ago | (#33859644)

I wonder why /. does not have a section on economics. Isn't it long overdue to have one?

Yes. And then I can filter it out.

Re:Slashdot Economics section (1)

Mr2001 (90979) | more than 3 years ago | (#33859658)

which sounds as if it is a positive for the economy that stocks rise on 'Hope for Fed Action', when in reality, those who understand can tell you that "Fed Action" means more money printing/borrowing, which implies more inflation and debt, so rising stocks (and rising gold) in this situation means that there is an expectation of yet more inflation

You say "more inflation" as if we've been experiencing high inflation already, when in fact inflation has been unusually low for quite some time (lower than the Fed's target level, and it's only just now they've considered doing anything to bring it back up).

so rising stocks (and rising gold) in this situation means that there is an expectation of yet more inflation, so stocks will go up in nominal terms, but all US holdings will lose more purchasing power.

Many economists believe that since the main problem with our economy now is a lack of demand, an increased money supply and higher inflation is what we need to get it moving again. In light of that, what makes you think the rise in stocks wouldn't be able to outpace inflation?

Also, if you're going to mention the negative effects of inflation on purchasing power, isn't it also worth mentioning the positive effects of inflation on debt?

Why a subject ? (1)

bytesex (112972) | more than 3 years ago | (#33858886)

Pinkie in the cheek: "One million dollars!"

Business Management Rebuttal (5, Insightful)

NYMeatball (1635689) | more than 3 years ago | (#33858922)

"Its okay, this project/software is using 'internal resources'"

"Say, Jim, would you mind working a few extra hours for the next 14 weekends in a row? I know you're salary, but we'll make it up to you once this project is done..."

And that, my friends, is how you completely ignore hidden costs and justify even the most lingering of projects.

At least at my company, anyway.

Re:Business Management Rebuttal (2, Insightful)

benjamindees (441808) | more than 3 years ago | (#33859260)

That's funny, because everywhere I've worked the standard method of ignoring hidden costs was to purchase poorly-designed and ill-suited proprietary software and then pass it off to internal resources to maintain* it.

*re-write

i'd love to see this for Waves (1)

areusche (1297613) | more than 3 years ago | (#33858924)

I just spent a lot of cash on the Waves Mastering Suite for Pro Tools. In fact any "multimedia" software has a crazy price. I figure they do this to milk media companies for all that they're worth.

those idiots (2, Funny)

Profane MuthaFucka (574406) | more than 3 years ago | (#33858934)

If they really want to know what software costs these days they need to be calculating those prices in Rupees, not Dollars

Re:those idiots (0)

Anonymous Coward | more than 3 years ago | (#33859044)

Hahaha, that's awesome! I lol'd

Re:those idiots (0)

Anonymous Coward | more than 3 years ago | (#33859464)

Good one! But in reality all Indian companies bill in US Dollars and not in Rupees.

"...$2.82 per line of code..." (2, Funny)

John Hasler (414242) | more than 3 years ago | (#33859026)

The solution is obvious. Ban newlines.

Could impact "software metrics" though. "Three months and you guys have produced only one LOC? You're all fired. We're sending the job to a guy in India who guarantees 20 LOCs per day from each programmer."

Re:"...$2.82 per line of code..." (1)

nacturation (646836) | more than 3 years ago | (#33859416)

And don't optimize [folklore.org] .

Re:"...$2.82 per line of code..." (1)

Hatta (162192) | more than 3 years ago | (#33859600)

What software actually costs to produce is irrelevant. What matters is how valuable it is to the customer, and how much they're willing to pay for it.

Absurd (2, Insightful)

Maxo-Texas (864189) | more than 3 years ago | (#33859242)

your cost is the salary divided by the work done.

These kinds of studies often lead to stopping work because it's "too expensive" which leads to your staff sitting doing nothing. It's absurd.

I've seen many small projects which would have 1 to 2 percent improvement canceled because they were not "cost effective" and then the programmers sat there doing nothing for 2 months. You should always let your programmers work on little side projects that they are enthusiastic about as long as they make the big deadlines that you want.

related cost of dead formats (0)

Anonymous Coward | more than 3 years ago | (#33859286)

It seems strange to me that NSF blew 500k on the "cost of software" when the more interesting cost is the cost of data lost to proprietary formats. How many scientific experiments are done, on the NSF's dime, that never get shared with the public in open formats because instrument manufacturers lock in their clients.

as someone above mentioned, the cost of decommission is a real bear, and breaking the lockin instrument manufactures have on the instrument data should be something NSF devotes monies toward.

Broken record (2, Interesting)

rbrander (73222) | more than 3 years ago | (#33859296)

Gartner's been saying this stuff for 20 years. In practice, the news that software has ongoing costs was used to exterminate any solution except Microsoft from large organizations.

In order to do that, non-IT departments had to be forbidden to install or choose any software at all, or they would have shown an annoying tendency to pick software that worked better for their needs. So IT had to remove all admin privileges and get Purchasing to not permit any purchase orders for software not OK'd by IT.

The larger the organization, the better the argument works. The proportional costs actually drop through advantages of scale; but the absolute cost starts to sound appalling when multiplied by 10,000, particularly when a single, generic, (Garter-quoted) number like $1000/application/year/PC (developed by dividing the whole support budget by the number of apps) is used for all apps, including handy little graphics utilities like XnView.

In theory, a department could prove by business case that some second (third...) solution to the same basic software category within the organization was justified by some benefit. In practice, this was made almost impossible to prove and was limited to graphics jobs being allowed Macs.

It was used to prevent Firefox, for instance; though free, the same "administration costs" were applied to the decision. Pleas that customers could upgrade and manage it themselves by clicking the "upgrade" button were scoffed at; one or two anecdotes of users that got themselves into a mess were multiplied by 1000 PCs to claim that vast costs would be incurred.

In short, this argument was used to take the "Personal" out of corporate PCs. Someone I know discovered there were only a few things he COULD change on his desktop; couldn't even delete the icons for Approved Corporate Software he didn't use. But he could, and did, change one icon to read "Their Computer".

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