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Worth $5500?Worth $5500?Posted Aug 12, 2006 0:51 UTC (Sat) by giraffedata (subscriber, #1954)In reply to: The real question we need to raise is by BlueLightning Parent article: A couple of lessons on the hazards of proprietary software Robotic Parking claimed it spent $10M to develop the software. If so, I could see it being worth $5500 a month.
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Worth $5500? Posted Aug 12, 2006 11:23 UTC (Sat) by rwmj (subscriber, #5474) [Link] > Robotic Parking claimed it spent $10M to develop the> software. If so, I could see it being worth $5500 a month. Hang about! This is a classic monopoly argument. What they mean is that it cost them $10M and the customer has no choice but to pay off their monthly interest fees. I could very easily spend $10M developing some software which would be worth absolutely nothing at all ... in fact I worked for a company during the dot-com boom which did about that :-) In a free market, whoever had been stupid enough to give me that money would have lost their shirt, and customers would have gone with a cheaper/better competitor. Rich.
Worth $5500? Posted Aug 12, 2006 16:52 UTC (Sat) by giraffedata (subscriber, #1954) [Link] But we have to assume that Robotic Parking tried to spend as little as possible developing the software. It was not working on a military-style "cost plus" contract and in fact apparently had no intention of selling the software, so every dollar Robotic spent was a dollar out of its pocket. Your dot-com employer probably also made an effort to spend less building whatever you built, and didn't know a way to do it cheaper.So there's a good chance that it really costs $10M to develop software to run that garage (we don't have any better information), which means that the city couldn't develop new software for less, which means it could be worth $5500 a month to the city to avoid developing new software. This is the free market worth argument, the one that would be used in Robotics' lawsuit for royalties. There are other ways of approaching worth. By one method, it's worth nothing because the entire $10M is a sunk cost.
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