Just read this article where the author notes that business executives have still not wrapped their heads around the process of “selling software” in that its accounting “has no model appropriate for software or programming.”

Some quotes:

The classic rules of business management are rooted in the industrial age’s manufacturing traditions. Unfortunately, they have yet to address the new realities of the information age where products consist mostly of software.

and

The goal of all business is to make a sustainable profit, and there’s only one legal way to do so: sell some goods or services for more money than it costs you to make or acquire them. It follows that you have two ways to increase your profitability: reduce costs or increase revenues. Reducing costs worked best in the old economy [of manufacturing]. Increasing revenue works much better in the new economy [of software development].

and one last quote:

The only available economic upside comes from making your product more desirable by improving its quality, and you can’t do that by reducing the money you spend designing or programming it. You must invest more time and money on the research, thinking, planning, and design to make your product better suited to your customer’s needs. Instead of reducing what they spend to build each object, software companies must increase what they spend to build all objects. This is the essence of the real new economy.

Interesting ideas, but I’m not sure I agree with everything. I mean, I do agree that “information age’s economic rules are different from those in the industrial age,” but I guess it is the details. Allow me think out loud for a minute…

Is software engineering like other engineering disciplines in how it is marketed and sold? Not exactly. If an architect builds a tower, the job is complete. It is now taken over by another company to maintain the building. If the building needs enhancements, they are planned and built as a project … not as maintenance.

But this difference is not only based on the engineers ability to easily enhance a product, but on the customer’s expectation that it will be enhanced at least every year. If I don’t get a new update or at least a patch regularly, I’m dissatisfied with the product.

But let me dive in the specifics of not “selling software” but in selling “via software” … that is the Internet. I’m not sure what it is, but when I order something online, the price is the same as it is at the retail store. However, not only do I have to wait (delayed customer satisfaction), but I also have to pay extra for shipping. Your average consumer doesn’t add the cost of gas and travel time to the purchasing, but they will add the cost of UPS. So why haven’t companies figured this one out yet?

If it is cheaper to sell online because you don’t have to have expensive retail outlets and showrooms, then pass that savings onto the customer, or they won’t buy online. I’m geeky enough to prefer to buy online as I would rather type a few keywords in the store’s online search engine that try to locate a pimply-faced kid for him to say, “Aisle 6?”