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| Free Software Is Just Too Expensive |
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| Development engineers and managers often get "free"
compiler and debugger tools bundled with their RTOS, or directly from GNU,
and are reluctant to spend an additional $6K or so for Green Hills tools.
Looking at the total project picture, beyond just the incremental price of
the tools, can shed new light on the cost-effectiveness of Green Hills
tools. "I looked at your tools, and I really like MULTI®, but I've already got free tools. I can't justify an additional $6K per seat." Consider the following: 1. As seen in a standard MULTI demo or evaluation, MULTI has many powerful features and productivity enhancements designed to save you development time and money. 2. What percentage productivity improvement will you achieve with MULTI? 30%? 20%? 15%? 10%? Let's see: 3. MULTI will provide a MINIMUM of 5% additional productivity as follows:
4. Small Relative Price. Programmers cost about $150,000 per year. Other product development costs increase that cost. In 5 years, you'll spend over $750,000 per developer. The cost difference between MULTI and GNU is $6,000 per developer. MULTI's price is less than 1% of your total cost for that programmer. 5. Cost of Missing 5%. In five years, "Free Software" will cost you 5% of $750,000 or $37,500 per seat. Clearly "Free Software" costs much more than MULTI, seat for seat. Cost exceeds Tool Price.
6. Value. You hired all these programmers that cost you $150,000 each. Presumably, you believe that they will produce something of greater value, much more than the $150,000 they cost. The $37,500 derived above was only the cost, not the value. The value would be much greater, and would easily overcome the cost of the tools. So, "Free Software" actually costs you much more than $37,500. Value exceeds Cost. 7. Time to Market benefits derived from increased productivity are staggering. Your time-to-market will be improved by using MULTI. Every week you save in time to market translates into additional market share, not just earlier market share. Combined with the fact that MULTI costs only a couple of percent of your total programmer's cost to start with, this improved time to market doesn't have to be very big to result in elimination of the cost of MULTI. A 3 month earlier time to market represents 3 months of sales at the maximum sales rate, not at the initial rate. Free Software costs you these lost sales. Lost Sales far exceeds Value. 8. Time To Market, in the presence of competition, is even more critical. The first to market can expect to achieve a dominant position, perhaps 50% - 70% market share. The followers might only get a 20% share. The aggregate revenue and profits from the leadership position are enormous. Reaching market before your competition is crucial in a competitive environment. "Free Software" costs you this reduction in market share. Time to Market far exceeds Lost Sales.
Isn't your programmer worth 2 weeks salary to improve
his productivity? ($6,000 is 2 weeks out of $150,000/year) By recognizing that MULTI offers even just 5% added value:
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