Software firms rely on upgrades to reel in new business Some are worthwhile, others are not

May 17, 1993|By Laurie Flynn | Laurie Flynn,Knight-Ridder News Service

It's no longer enough for the software industry to just sell you software. Today, they want to sell you an annual "subscription" -- and then a renewal. And another, and another.

Welcome to the upgrade game, a strategy by many software companies to reel in new business from old customers, by regularly soliciting them to buy upgrades and enhancements -- some worthwhile, even necessary, others not.

Increasingly, the industry is becoming a "razor and razor blade" business, where the initial purchase of the basic product is only a starting point. Software prices are falling and most PC users already have basic applications, so software companies must go prospecting for new income, said Dave Tremblay, research director at the Software Publishers Association, a Washington trade organization.

In a recent study, the association discovered upgrades account for as much as a third of some companies' revenue -- and upgrade revenues are growing, Mr. Tremblay said.

For some users, software upgrades can't come fast enough. They easily find uses for new features and faster speed. They expect regular upgrades to keep up with changes in the operating system and new hardware capabilities, and consider it irresponsible if software companies don't enhance their programs every nine months or so.

But for other users -- many of whom probably don't even use all the features of the software they already have -- it means they'll have to become careful judges of quality and value. These users' difficult task is figuring out which upgrades are important and which are worth skipping. Because some upgrades add features of interest only to a small segment of users it's not always necessary for every user to buy every upgrade.

And keeping up with some companies' upgrade schedules can be a costly proposition. Assuming a software user buys every upgrade, he or she can easily expect to pay hundreds of dollars over the life of the product -- sometimes more than the software's original cost. Assuming the average PC owner uses three or four programs, that could total up to several thousand dollars' worth of upgrades.

*

How to sort out upgrades? There are three kinds:

* Generally, the more substantial the upgrade, the bigger the jump in the program's version number.For example, a whole-number jump, say from version 1.0 to 2.0, generally indicates a significant upgrade. Such upgrades usually mean a big performance boost, addition of substantial new features or a huge improvement in overall capabilities. They often coincide with release of a new operating system environment, such as Windows 3.0, or new hardware.

* A "decimal" increase in version numbering, such as from 1.0 to 1.1, generally indicates a less substantial upgrade, often meaning slight improvements to performance or new utilities, rather than new features.

K? * A bug-fix upgrade, or a "maintenance" upgrade, is usually

marked with the addition of a letter to the version number, such as 1.0a, or the addition of a decimal place, such as Version 1.01. Bug-fix releases, if any, usually follow immediately after a major upgrade.

But in some cases, in fact, an upgrade is more substantial than its labeling indicates, as in the case of Windows 3.1, which offered significant improvement over Windows 3.0 but got only a "decimal" increase in its version number.

Industry experts advise always waiting a few weeks, or even months, before buying either the first version of a program or a major upgrade. Within that time, the true value of an upgrade should become clear.

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