November 12, 2009

Marginal value & cost of software

Posted by Ben Simo

* Image from the Economics of Computers, by William F. Sharpe.

Cost of additional copies approaches zero ONLY IF no maintenance or customer support costs are associated with sales of additional copies.

If your quality stinks, expect that supposedly 99% profit copy you sold me to increase your costs.

Quality improvement that reduces maintenance and support costs can have great value!