Why Writing Software is Expensive?

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Table of Contents

Background
Software
Expensive Microsoft
Added Costs
Challenges
Conclusion
References

There is no need to elaborate on the fact that this generation is witness to one of the greatest explosions of knowledge in the history of human existence. A major part of this revolution is the invention of computers – machines that can do highly complex calculations as well as a powerful instrument for displaying data and sending the same to every nook and cranny of this globe.

After improvements were made on computer design transforming it into equipment that is affordable enough for home use, the Information Age took off. And it was able to accelerate to supersonic speeds with the arrival of the Internet. All of these would never have been possible without the aid of software.

This paper will take a closer look at software, the invisible component of every computer that allows a box of wires (PC) to accomplish marvelous tasks such as file storage, file transfer, browsing the web, typing, painting, etc. This paper will also attempt to explain why writing software is expensive especially for corporations such as Microsoft.

Background

It is common knowledge that computers evolved from basic computing machines such as ancient bead counting type apparatus that later on developed into gigantic instruments that can only be used by the government, the military, and large companies. Aside from the price of these beasts – first-generation computers that can easily occupy an average size room – it is simply too expensive to procure and maintain one.

For some time in the early part of the 20^th century, no one thought that everyman can touch and use a computer. It is even too far-fetched to even think that every household in America could one day have access to a computer. All these changed because of a few design alterations to the basic computer package.

Software

As mentioned earlier, a standard computer requires software to function properly. Think of it as a set of instructions sent through the central processing unit of the said equipment – instructing the computer on how to behave after receiving inputs from the user. All software in its most basic form is simply code written using sophisticated computer language. This language is comprised of words, numbers, and symbols that a computer understands. It tells the computer what to do when faced with a particular circumstance.

A general-purpose computer or PC has the usual two software combo of 1) Operating System or OS and 2) application software such as Microsoft Word for word processing, Microsoft Excel for spreadsheets, PC games, etc. In an in-depth study of Bill Gates’ Microsoft Company David Evans provided the following introductory information concerning software:

In general, an application is a program that a user runs to accomplish a task that is unrelated to the computer itself, such as writing a letter. Sometimes a computer user wants to perform actions that are related to the computer itself, such as locating and copying a file. An operating system will frequently provide these capabilities to the user (2002, p. 268).

There are at least three major groups of operating systems available in the market and these are: a) Apple OS X; b) Linux (with many variants); and c) Microsoft Windows. The last one is arguably the most popular and dominates the globe in terms of reach and influence. Since Microsoft Windows was able to succeed at such a relatively quick pace then it has distanced itself from its main competitors with a very wide margin. Applications such as games and other office tools are designed primarily to suit the operating system of Microsoft.

Expensive Microsoft

Software is not much different from a piece of invented gadget. Software is an innovative product that addresses a need and in the case of Microsoft Windows and Microsoft Office provided a convenient solution when it comes to writing letters/memos, providing accurate calculations from basic expense accounts to the more complicated bookkeeping needs. If this is a product that was non-existent before a team of developers produced it using time, money, and talent then software just like inventions needed to be under the protection of copyright law and licensing protocol.

A typical grant of the license will usually contain the following terms:

Subject to the provision of this Agreement, Licensor grants to Licensee a perpetual, personal, non-assignable, non-transferable, nonexclusive object code license to use the Software solely for Licensee’s internal business purposes in the United States (Classen, 2005, p. 7).

The reason why copyright laws must be enforced is due to the high cost of research and development needed to produce the software. The R & D of every serious software company includes studying recent trends and anticipating consumer needs. There is a lot of prototype or products that are entirely new and companies like Microsoft need to always have this kind of products to stay competitive. Thus, a customer is not only paying for the commodity he sees in the store but part of that money goes to the R & D department of the company and not simply to recover the cost of production of the said purchased item.

Licensing a product and asserting copyright laws is the only way that a business can sustain its profitability. If these systems of control are not in place – especially so in the case of the software business – one customer can purchase one single product and then copy it and redistribute it. This will surely hasten the demise of the software maker.

Added Costs

Developing software is not simply about writing a piece of code. The design of the software requires knowledge of customer needs as well as existing and future threats. Software should not be considered as a single entity but must be viewed as part of a system. The most common terminology used in a computer system in the corporate world is the Management Information System.

In recent years MIS has evolved into a separate department in any corporate setting. It is not surprising to know that there is a Vice-President for information systems in most firms. The work of MIS may include coding software or purchase software that can work seamlessly in their present infrastructure. If a company’s MIS personnel writes the code for their system then additional costs will be expected because writing the software requires testing and continuous searching for bugs or errors in the code.

Challenges

The number one challenge for modern management information systems is the creation of a seamless IT architecture that can ensure an error-free e-business. This is extremely difficult to do for an organization that relies on the internet and telecommunication networks to conduct businesses in multiple locations all over the world.

There are at least five problem areas that require constant scrutiny and must be included in the design phase of the MIS infrastructure and these are all related to information storage and retrieval:

Destruction
Theft
Deletion
Corruption
Bugs and Virus Infection

At any given moment, with the list of problem areas listed above, the work of the MIS department of a modern-day enterprise is never-ending. Personnel assigned to MIS can buckle down and work on creating an impregnable system able to: a) limit access; b) prevent illegal entry, and c) secure the system. This can be done but no one can rest on their laurels. This is unlike other projects that can be designed, fabricated, and inaugurated once and requires minimal maintenance. MIS requires high maintenance and on top of that requires constant adjustment because changes in the system occur regularly.

Conclusion

As mentioned earlier MIS has to deal with the following factors that force information technology to perpetually evolve. The following list can be seen as a cycle where one factor induced the creation of the next one.

shifting needs of end-users;
rapidly evolving technology;
need to create a reliable system;
the increasing sophistication of hackers and virus creators; and
need to involve own employees and other end-users in the design and implementation process of the new system.

The cycle kicks off when an end-user demands changes in how technology behaves. This can be in the form of information storage and retrieval or simply a change in functionality when it comes to key features of a particular system. A good example can be the delivery of information from the company selling that product and then moving it from the company’s server into the client’s computer. The cycle begins when the number of customers demanding faster download of information has reached critical mass. When this happens the next phase of the cycle comes into play.

When end-users ‘ needs become impossible to ignore then manufacturers and designers of computer hardware/software initiate changes or upgrades to the current technology. This often results in the production of an entirely new kind of equipment or computer hardware/software combination that renders the previous one obsolete. This spawns a new problem because new technology needs to be studied and assimilated into current MIS protocols.

When new technology is incorporated into the old system there is a great chance of incompatibility among other components of the system. This is the grim reality when it comes to IT infrastructure there is simply no easy way of predicting possible incompatibility between the different parts of the system. When this happens the next phase of the cycle begins. The need for reliability and dependability can be felt at this stage when end-users of the said system begin to notice failures and errors. The software has to be rewritten or the designer goes back to the drawing board and the expenses keep piling up.

References

Classen, H.W. (2005). A Practical Guide to Software Licensing for Licensess and Licensors. (1^st ed.). Chicago: American Bar Association.
Easttom, C. (2004). Moving from Windows to Linux. MA: Charles Rivers Media, Inc.
Evans, D. (2002). Microsoft, Antitrust and the New Economy. MA: Kluwer Academic Publishers.
Leavitt, N. (2007) Microsoft’s New Licensing Model: The end of Shrinkwrap as We Know It? Web.
Valimaki, M. (2005). The Rise of Open Source Licensing. Finland: Helsinki University Printing House.
Deograt-Lumy, G. & R. Naldo. (2005) Insight Into Intrusion Prevention Systems. In H. Tipton &
M. Krause (Eds.) Information Security Management Handbook. 5^th Ed. Florida: CRC Press LLC.
Dowland, P. et al. (2005). Security Management, Integrity, and Internal Control in Information Systems. New York: Springer Science.
Evans, D. (2002). Microsoft, Antitrust and the New Economy. MA: Kluwer Academic Publishers.
Khosrowpour, M. (2006). Emerging Trends and Challenges in Information Technology Management. PA: Idea Group Publishing.
Mason, A. & M. Newcomb. (2001) Cisco Secure Internet Security Solutions. IN: Cisco Presss.
McCumber, J. (2005). Assessing and Managing Security Risk in IT Systems: A Structured Methodology. Florida: CRC Press LLC.
Pathak, J. (2005). Information Technology Auditing: An Evolving Agenda. New York: Springer.
Pastor-Satorras, R. & A. Vespignani. (2004). Evolution and Structure of the Internet. New York: Cambridge University Press.
Tiller, J. (2005). Identity Theft. In H.F. Tipton & M. Krause (Eds.) Information Security Management Handbook. 5^th Ed. Florida: CRC Press LLC.
Thierauf, R. (2001). Effective Business Intelligence Systems. Westport, CT: Greenwood Publishing.
Valimaki, M. (2005). The Rise of Open Source Licensing. Finland: Helsinki University Printing House.
Wylder, J. (2004). Strategic Information Security. Florida: CRC Press LLC.

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