Competition yields software bargains

Personal computer

February 18, 1991|By Michael J. Himowitz

WHILE THE COST of computer hardware has dropped faster than the value of your favorite junk bonds over the last few years, until recently the cost of software has been escalating.

Even at discount software stores, the top-ranked word processors and spreadsheet programs are $250 to $300. High-end database and desktop publishing programs run $400 to $600.

This doesn't mean that home and small business users can't find good software for less money.

For example, I recently reviewed Easy Working Writer, a decent little word processor that retails for less than $10. For $100, you can buy Microsoft Works, PFS First Choice or Lotus Works, integrated packages that pack surprisingly good word processing, spreadsheet, database and communications programs in a single bundle.

But sometimes these won't do. If you take work home, you may need the same software you use at the office. If you're doing consulting work for a client who uses Lotus 1-2-3, you may need Lotus. If you're writing a book or publishing a newsletter, you may need the formatting, footnoting or indexing capabilities of the best word processors.

Market forces have driven up the cost of these programs, but those same forces are now producing some incredible software bargains. You can pick up some state-of-the-art software for as little as $100 if you shop wisely, register the programs you buy and open your junk mail.

First, a word about software pricing. The price you pay for a high-end program has almost nothing to do with the cost of the 27 disks, the 12-pound manual and the fancy packaging. A program that sells for $500 probably cost the publisher no more than $25 to produce.

But launching or upgrading a major word processor, spreadsheet or database program can cost tens of millions of dollars in research and development, plus millions more in advertising, marketing and support. That's what you pay for.

Moreover, software publishers don't care much about you and me as individual buyers. They know that the key to hitting the big time is to put their software in corporate offices. Large and medium-sized corporations may buy hundreds or thousands of copies of a program at a time.

While corporate buyers don't pay list price (actually, no one ever pays list price), the cost of the software package itself is insignificant compared to the cost of installing it on a couple of thousand computers and training employees to use it.

For the same reason, once a corporation settles on standard software, nothing short of a direct hit by a cruise missile will shake it loose.

Lotus got an early stranglehold on the corporate spreadsheet market, just as Ashton Tate got in early with its dBase II and dBaseII database products. They became corporate standards. Even if other products might be better, the cost of switching to a new program never outweighed the benefits in the eyes of most PC managers.

In the word processing market, there was no dominant early leader. But Word Perfect eventually became the 500- pound gorilla because the program worked so well and the publisher offered unlimited free support.

With their dominance in the marketplace and the unwillingess of corporate buyers to switch software in midstream, the big publishers were free to raise prices without fear of losing the massive accounts that keep the market analysts happy.

But things are changing. Some of the top players have been slow to update their products, and smaller, more aggressive companies are trying to unseat them with excellent products, lowball pricing, massive national advertising and direct mail campaigns.

The big guys are fighting back, and the result is a bonanza for software buyers. In fact, anyone on a mailing list of computer owners probably gets two or three good offers a week.

For example, Borland International successfully promoted Quattro Pro -- a superb, Lotus-compatible spreadsheet with many advantages over the original -- by offering it for just $99 to anyone who owns Lotus.

Borland has also taken the lead in offering low prices on Quattro and its highly-regarded Paradox database to anyone who every registered any of its products. This kind of offer is a good reason to register every piece of software you buy.

Another force has been the phenomenal success of Microsoft Windows, the graphical operating environment that makes IBM-compatibles almost as easy to use as Apple Macintoshes.

Microsoft has sold more than a million copies of Windows since its debut in June, and will probably sell two to three million by June of this year.

Since older programs can't take advantage of the new graphic environment, Windows has leveled the playing field.

Lotus, which once disdained Windows and price promotions in general, recently bought the Samna Corp. to get its hands on Samna's powerful Ami Professional, a Windows word processor.

Lotus is offering Ami for $20 to anyone who buys Lotus 1-2-3, Release 3.1 before April 30, and it's offering Ami Pro by itself for $129 to anyone who currently uses Word Perfect, Microsoft Word, IBM DisplayWrite or a half-dozen other popular word processors.

Not to be outgunned, Microsoft is offering its two flagship programs, the Excel spreadsheet and Word for Windows, to all registered Windows users for $129. If you have a copy of Windows and registered it, check your mail.

While Excel and Lotus users will fight duels to the death over which is better, it doesn't really matter. These are all champagne products, and they're available for the price of a beer and a shot.

This is the American way, folks. Raw, nasty, no-holds-barred competition. And for once, you're the winner.

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