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Software is a product.
Much like TV, automobile, washing machine, etc.
The latter are tangible while software is intangible but that is not an important difference.
Once upon a time, when you bought a software, you paid one price for it, no matter how many persons in the purchaser company used it.
Then they decided to charge according to the power of the processor the purchaser company used. This is like saying you have a larger living room and so the TV is higher priced.
Then they decided to charge price/user. This is akin to the price of the TV or washing machine being dependent on how many persons are in the household.
Now, Oracle has gone one step further and its Java licenses are based on the number of employees in the purchaser company, including janitors or messenger boys they may employ. If a customer refuses to accept the new terms, which yield hundreds of thousands if not millions of dollars more in revenue to Oracle, Oracle is threatening an audit of those companies to determine if any of the contractual terms are violated by the purchaser. Companies have sprung up to assist the purchasers in questioning the findings of these audits.
What makes software different from common household goods such as TV, automobiles, etc?
What justifies differential pricing based on number of users?
Other than the greed of software vendors.
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Thankfully it only applies to Oracle OpenJDK, which is essentially Standard Edition. I'd be surprised if any large companies continue to use it, at my last place I had a migration task to move all JDK installations from SE to the Adoptium OpenJDK versions. Took me all of about a day and probably saved the company a lot of money since the company was international and had a lot of employees. I suppose the only companies interested would be those specifically wanting the Oracle support, but is it worth the cost? I don't think so.
Some other platforms do similar things where they charge different models based on the size of your business, either by the number of employees or the average annual revenue.
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My question was:
Should software be priced differently than ordinary goods? What is the justification for it?
The production process is similar. An automobile manufacturer has a design bureau to design a new vehicle; production engineers to manufacture the vehicle; test engineers who test the vehicle for safety, compliance with various laws, etc; and a marketing and sales group to advertise the new vehicle and sell it through dealerships; and a service organization that coordinates warranty repairs through the dealership.
A software company has senior developers who design the software; development engineers who write the code; test engineers who test the functionality of the software; and maintenance engineers who perform fixes when errors are discovered. The production process is far easier as one has to only copy hundreds of CDs as opposed to an automobile where several body parts have to be pressed out of sheet metal; the body has to be welded together and painted; the engine has to be cast and machined; the transmission has to be forged and machined: and the entirety of parts have to be brought together in an assembly line to be assembled into a complete vehicle.
But an automobile is not priced on the basis of whether it is a single user vehicle or to be used by a family of six.
Why the difference then except that the software guys have the customer by the gonads and are willing to squeeze hard to extract money?
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Vivi Chellappa wrote: Should software be priced differently than ordinary goods?
You mean like John Deere requiring that their tractors only be serviced by their dealers?
Or terms of use on almost any electronics that said the warranty was violated if anyone but a licensed service center worked on it?
Or labeling exactly the same printer with a different name, and charging more, based on whether it would be serviced for free if something went wrong versus charging to fix for it?
What about charging for an extended warranty for a refrigerator because it only has a one year warranty when refrigerators commonly last more than 10 years.
Vivi Chellappa wrote: But an automobile is not priced on the basis of whether it is a single user vehicle or to be used by a family of six.
But on the other hand a rental car usually (always?) states that only the renter can drive it. Doesn't matter whether it is a friend or a spouse.
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Chris Copeland wrote: charge different models based on the size of your business, either by the number of employees
See, if it's a site license, charging by the number of employees makes some sense to me.
Otherwise, it's just gouging.
Check out my IoT graphics library here:
https://honeythecodewitch.com/gfx
And my IoT UI/User Experience library here:
https://honeythecodewitch.com/uix
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Vivi Chellappa wrote: What justifies differential pricing based on number of users?
You are comparing apples with oranges. When you watch TV you do not use it to make money. When you use someone's software product, in most cases it is to keep your business going. So if you profit from using that software then maybe the owner should get a share of those profits.
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So a bar installs a TV intending to attract more barflies and the vendor charges per barfly/hour whether the barflies are watching it or not.
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Do they? I always thought that they charged a flat fee. But again this is not the same as using one software product to create another.
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So, if I buy a truck from General Motors for my freight carrying business, I should share my profits with GM?
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You probably do if you got the extended warranty. 
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No.
The extended warranty would be an optional cost of acquiring the vehicle.
Profits are what remain after all costs are deducted.
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A truck is not software. Stop trying to compare things that are not equivalent.
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But the concept is analogous. Just some people give special "clearance" to certain things like tech and the medical industry. And it makes sense that we devs would consider software special. IMO it shouldn't be that way though. One could think of software like a tool. And if I buy a screwdriver as a carpenter, should I share profits then?
Don't get me wrong, some profit-based models aren't always bad. For instance, some game engines are free to use until after the company makes money off the game. Which makes the barrier to entry low. If it's done ethically though and not from a place of greed.
But, this day in age, everyone is all about getting recurring payments from customers. Hell, they want you to get a "subscription" when going to the car wash now. The idea of just buying something is become a relic of the past... all for greed.
Jeremy Falcon
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If that is how they sell it yes.
Did you know you can get a 'fleet' credit card for your business?
Like a regular credit card but for commercial businesses which do in fact use vehicles as part of the business. The company gets benefits because the card is used, via the contract for the card, in certain ways. Such as where they buy gas and how the vehicle is serviced.
Same is true for large companies where the employees have company expenses. The company gets money back depending on things like how the employees travel, where they stay, where they eat and even office expenses.
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I think you make a good point.
Richard MacCutchan wrote: When you use someone's software product, in most cases it is to keep your business going.
However, if you compare this to a car, the analogy falls apart bec it would mean we would charge Uber drivers, delivery drivers, etc. more because they earn income using the product.
But, still you point is a good one.
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If you shoot video in a National Park -- and someone, anyone ever earns money from that video -- the National Park Service wants some of that money.
It ain't right.
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Can I get in on this? I want some of the money for watching the video. 
Jeremy Falcon
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raddevus wrote: However, if you compare this to a car
But I'm not, I'm comparing it to watching TV at home.
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So if I buy a truck for my delivery service, is it your contention that I should pay a royalty or license fee to the truck's manufacturer?
Freedom is the freedom to say that two plus two make four. If that is granted, all else follows.
-- 6079 Smith W.
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Back in the day when you bought software, you installed it and it never changed after that point. Now most software is updated regularly for bugs and security reasons. Those updates are work for the software company and it makes sense that the end user would have to pay for that.
I'm not defending that Oracle licensing though. That sounds pretty shady and desperate.
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In the past (and even now), there was/is an annual maintenance contract with the software vendor that paid for upgrades and bug fixes.
It is like buying an extended warranty for your car.
My question remains: what justifies per-user pricing?
PS. I brought in Oracle as an example of egregious business practices that is enabled by per-user pricing.
modified 2-Aug-24 9:25am.
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Vivi Chellappa wrote: what justifies per-user pricing?
If a school purchases text books, they need to pay for each copy that they buy, even though the content of each book is the same.
What's the difference with software?
The difficult we do right away...
...the impossible takes slightly longer.
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I don't agree with the per employee of your company bit...but per user of the software seems like a good way to account for the constant upkeep of the software. What else would be a fair way to do it? If I want to use some software for my small business of 4 people, I should have to pay the same as a huge corporation of thousands? Per user is at least proportional.
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Vivi Chellappa wrote: In the past (and even now), there was/is an annual maintenance contract with the software vendor that paid for upgrades and bug fixes.
Not sure you mean by "past" but no that is not true.
Big iron applications, far as I know had contracts. The contract covered the iron and the software. For big iron 3rd party software (like Oracle) I suspect there were contracts also.
For personal computers when you bought Lotus 1-2-3, it was yours. After a bit software of some sorts offered an upgrade which meant you paid less if you had the prior version. Some companies did that. That was true regardless of whether it was personal use, small business or large business. The only 'contracts' associated with that was that if you bought enough copies you could negotiate a lower price. There was no service at all.
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