4.2. Use Value and Sale Value
- A software's use value is its economic value as a tool, a productivity mulitplier.
- A software's sale value is its value as a salable commodity.
- The vast majority of code (about %95) has no sale value: in-house software, embedded software, customizations of programs for the organization, hardware device-drivers or other hardware-assisting software.
- Only a small amount of the code (which includes most of the open-source code out there) can be sold or distributed in some way.
- Making your revenue stream dependant on sale value leads to many complications: you seek the most buyers (to maximize revenue) but the least actual users (to minimize support).
- Once a market matures and sales slow down, most vendors will have no choice but to cut expenses by orphaning the product.
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That's why commercial software does not correspond to the "Factory Model":
- Most developer time is paid for by sale value.
- The sale value of software is proportional to its development cost and to its use value.
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