How do bad software companies stay in business?

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Summary: With so much bad software on the market its amazing that the companies stay in business. It's not about technology, it's all about economics.

How do software companies, such as *****, continue to stay in business? Their software is almost good but from my experience unreliable and troublesome. Their support service is almost non existent and their Web Site is a circular nightmare. I finally got an immediate response from them when I wrote this evening to cancel any renewal of my license to *****. My experience with them makes me very reluctant to deal with anyone I haven't dealt with before.

I wonder the same thing sometimes about many companies, to be honest.

I think the bottom line is actually very simple: understand why those companies are in business. Understand a little about how the market works, and it starts to become clear.

It also gives some direction on what, admittedly little, control we as individuals have.

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I'm not an economics expert, but in this case that seems to me what this is all about: economics, not technology.

Companies are in business to make money. I know it sounds crass, but think about it: companies have to pay employees, pay investors and make a return for their shareholders. Almost everything a company does has to do with ensuring it's long term financial success. Or, in the case of some companies, their short term financial success before a planned exit.

So, how can a company that puts out a sub-par product stay in business?

Simple: either they won't be for long as they use up what money they do have, or they're actually making money with that sub-par product for long enough to meet their needs.

OK, how can a sub-par product make money?

As long as the money made by that product is more than the expenses used to create, support and distribute that product, guess what ... it's making money! The internet makes distribution almost costless, and as you've seen one place a lot of companies are constantly skimping on is support. Creation costs are a kind of wild card that's also very easy to skimp on, particularly when your goal for quality isn't all that high to begin with.

How can a crappy product still have revenue coming in? Don't people know it's crap?

No, they don't. And therein lies the dirty underbelly of so much software you see for sale on the internet. People rarely take the time to really investigate whether a particular manufacturer's product is any good. And if they do the research, the information that you'll find out on the internet is often in total conflict; person A will think that product X is the best thing since sliced bread, and person B will claim he's never seen anything worse.

Making an informed decision is difficult. So many people don't. They purchase what sounds like it will solve their problem based on well timed sales literature, and perhaps even a little of a "what have I got to lose?" mentality.

And then, of course, enough people purchase the software - no matter how good or bad it might be - and the company makes money.

So, what can we do?

Legwork. Research. And take action when things don't meet your need. Specifically:

• Find a couple of trusted resources for product reviews and recommendations. Obviously I feel that Ask Leo! is a reasonable resource, but honestly it doesn't have to be me. Pick a couple of folks or resources that appear to be well trusted in the industry, that you can understand, and that as best you can determine, have a set of values that match yours. (I'll throw out PC Magazine, Windows Secrets, Michael Horowitz's sites Computer Gripes and his blog Defensive Computing and another good resource, c|net. These are just a few; there are many, many more. I don't even always agree with them all, but I respect what they have to say.)

• Google, but Google with a grain of salt. Particularly look for discussion groups where people are discussing the product you're evaluating. Look not only for product problems, but especially support and customer service problems, and problems with any product guarantees. Don't expect 100% agreement - this is the internet, no one agrees on everything. But you will get a sense for products which, by and large, make more people happier (or unhappier) than others.

• If you can, find people you know that have tried the product and get their reactions.

• Pick products that include a guarantee, if you can. It's not at all unreasonable these days for much software to come with a 100% satisfaction guarantee.

Finally, if after purchasing a product you're not satisfied with the it, use that guarantee or even without such a guarantee return the product and insist on a refund.

What I see happening frequently is that people will purchase software to solve a problem, have it fail, and then complain online or to friends without actually taking action. If we go all the way back to the original question, even though the product failed, the company still made money! Returning the product or otherwise insisting on satisfaction is really the only way to actually impact that companies bottom line, even if just a little bit.

Unfortunately the pragmatic in me doesn't believe that enough people will actually take that kind of action, and that shady sub-par software will continue to exist and those companies will continue to take people's money. Sad, but I believe, inevitable.

As a consumer, wether you want to consider it "right" or not, the responsibility falls back on you to do your homework and make the most educated purchasing decisions you possibly can, and then back it up with appropriate action if a product failed to live up to its claims.

Related:

• Ask Leo! - Don't lose your keys!

• Ask Leo! - What's OEM software? Is it safe to buy?

• Ask Leo! - What software do you use? (in need of a serious update)

Article 12261 | Posted March 5, 2008