John Ferrick says that while we can expect software to become ever cheaper, pricing and new features must go hand-in-hand with quality, reliability and decent tech support
Each new generation of software offers increased functionality at a lower price - and that trend is set to continue. A number of factors are at play, perhaps most significantly Microsoft's need to cut prices to try to maintain and grow its huge market share.
Microsoft has had to use the pricing weapon to overcome two major obstacles. First is the threat that users will switch to Linux/open-source products. Additionally, the number of first-time buyers available continues to shrink because Microsoft's goal of the last decade is close to being achieved in the developed world, there is a PC on almost every desk in the office and home.
Linux is too different from Windows to be able to encroach much into the volume market, so although free/cheap software with reasonable support will continue to depress prices significantly, it isn't Microsoft's biggest headache. The real problem is that Microsoft has to achieve sales by convincing existing users to upgrade.
Over on the Mac platform, Apple is also driving down software prices. It makes software and hardware and achieves the best sales results when it produces total solutions for vertical and niche markets. Its success is exemplified by the massive inroads that Final Cut Pro has achieved against far more expensive video editing programs.
While Windows users might still think of Apple Macs as expensive, it's their relatively low cost, not just functionality, that has made them attractive to Hollywood production facilities.
Having seen that a Final Cut Pro solution costs only a quarter of that of an Avid set up, many firms decided to opt for multiple Mac systems working in parallel, rather than a small number of higher-priced systems.
There has been some panic recently about the way Apple has dramatically reduced the cost of its software. That may be a worry for competitors, but not for Apple itself given that it also makes the hardware and has been largely able to hold the line there on pricing. Over the last year or so, Apple has been majoring on value-for money software - typified by programs such as Final Cut Pro (and Express), DVD Studio and the iLife suite - and there's no reason to think this will change.
All this means that video editors will continue to be offered more functionality at ever lower prices, and that the border between professional and prosumer products will disappear almost completely - as we've already seen happen in the transformation of Pinnacle's Edition into Liquid Edition.
Another, more subtle, result will be a requirement to focus on service and support. It's intriguing to hear Bill Gates say that fixing security problems in Microsoft products has become the number one priority and that this change has delayed the next generation of software. It remains to be seen, though, how quickly developers of video editing software will follow that lead.
Despite (or perhaps because of) its massive market share in video editing, Pinnacle still doesn't seem to understand that new versions of software need to work out of the box. Offering additional, flawed, functionality doesn't hack it with users anymore.
Back in the 70s and 80s, it was commonly said that rampant Japanese firms would destroy the motor car and semiconductor industries in the USA. Instead, what happened was that some US companies woke up. They improved quality and functionality, and prospered to the extent of swallowing up those of their local competitors that slumbered.
But much of the impetus for change came from consumers and consumer groups, and I'm expecting that we'll see product reviewers in the video arena start looking at quality, reliability and support issues, not just functionality.
Companies will listen if they hear a loud, continual voice saying that customers expect reliability, won't buy if that's not guaranteed, will demand refunds if their expectations aren't met, and are likely to stop buying from them as a result.
Microsoft has woken up to this particular reality and it’s time the rest of the industry did likewise.
