Re:Um, you don't seem to understand "value". (Score 1)

Nice point, but you are using an unrealistic cost model. Okay so the software costs $5.50 to write yourself. And we'll say the software saves you $500,000 a year, and has a price tag of $450,000. What you're missing is that blurring of the lines between software companies and service companies. You're CIO does the same math you do and he purchases the software plus a service package for installation, configuration and customization (generic software doesn't work the way your business works). Now initially the installation looks easy so we're only talking about a three month professional services deal for say 5 people at $100 hr (that's a project manager, the product manager, two custom install developers and a QA resource, notice only two guys will be doing any real work), That's another $250,000. Now during the discovery process (after you've written your first check for $750,000) everyone is surprised to find out that your physical data model is identical to the one used to develop the software so this will require custom code, and since we're customizing anyway lets throw in a couple of features that your managers really want. All of this requires separate requirements gathering phase, new design, a larger development and QA team, and probably a graphic artist or UI designer. Two years and $8,000,000 later you are rolling out software to the entire enterprise. Now your about to being realizing your $500,000 a year in savings... Of course, now you are on an old version of the software, and there is no easy migration to the new version because you went and customized it so much.