Tag Archives: value

The Value of Software

I’ve been reminded of the fastest 1980s transatlantic software delivery method:

  • Put software on a magnetic tape.
  • Put the tape in your hand luggage.
  • Fly to the USA.
  • At customs, when asked if you had anything to declare, say “This tape”. If asked the value of the tape, make a fast decision whether to say $10 and risk 12 hours of interrogation as a possible communist spy, there to steal America’s software secrets or say $150,000 and be sure of an hour of form filling.

It has occurred to me that the correct answer was:
“$10. The licence costs far more but I’m not carrying that. It will be sent on later.”

Software is worth nothing until you use it and only until you stop using it. Free software costs nothing, so developers need to get paid in a different way. Should Free & Open Source Software be paid for only by those who use it to generate a profit and could it generate an international income for the countries that fund it, adjusted for national wealth?

Could we have a licence to receive free software updates, only paid for by businesses, according to their income (before tax fiddles) and routed to the teams that developed the software that is most used? Commercial software could join the scheme too, with higher prices if less rights are handed over. I don’t think it is healthy for FOSS to kill the commercial software market, because it encourages anti-competitive service monopolies like Facebook and Google.

[ This is a first draft of an idea ]

Values Market

“You can’t put a value on human life.”

I’m sorry, but yes, you can. If it is your life or the life of a family member then it may be ‘everything I have’ but if you are an administrator of a health budget then you must optimise the use of a finite resource according to some algorithm. Or you could pick the people you like the look of, or who agreed with your religious beliefs or politics. In the UK, they would generally not prove popular options. That isn’t the way we do things around here. Maggie Thatcher was wrong. We are a society and our society, on average, has loosely agreed on some ‘values’. We are willing to pay more for things and people and beliefs that we value . We value our values. We say “I love you and I will do anything for you, for ever” but we won’t really. We have limits. There is an upper limit on our investment, for our own protection.

That isn’t money though, is it? That’s love and some people appear to have bottomless reserves. Do they, or are they simply measuring their relative values in a different way? We all have different ideas of the value of things or commerce would be impossible. Trades only happen when there is a differential between the values of the people on either side of the trade. Our individual valuations change over time too. I won’t pay for your bottled water because I have perfectly good tap water available, but try offering me a tiny bottle for 5 Euros in a hot airport when my plane is 3 hours late. Think of bartering in a market too – finding the tipping point betwee holding on and letting go.

Money doesn’t really exist. It is a metric of relative value. Our chosen currency itself has a relative value against other currencies. There is a market in values and we have to agree our price.

“I’m not eating that!”
“I’ll give you £10… £50!”

Decide what you value and where you are willing to fold. “We do not negotiate with terrorists” is an opening bid, as Western-style market-capitalist democracies try to negotiate a new value system we can agree with the rest of the world. We may need to consider if any of our beliefs need to be re-evaluated in the new world market.

When I woke up this morning, I believed there were two different meanings of the word “value”; one about morals, one about money but I’ve realised that whether I want world peace or a new sports car, value is the measure of our personal desire for a particular future projection of the world to be true, relative to a network of the desires of every other living creature. Markets are the human race, balancing our collective desires. They aren’t going to go away.

New Rules to Make Free Markets Fairer

If you believe in free markets then as well as allowing people to work hard to become wealthy, you believe they are good for consumers, because competition encourages innovtation, increases quality, reduces price and ultimately improves value. This is particularly important to the poor.

People will choose a range of different ‘best-value points’ on the quality/price graph, usually according to their income. The wealthy get better quality. This incentivises the poor to strive to become rich. You see, I DO understand ‘the idea’ behind Capitalism.

The danger is a supplier that comes to dominate a market to such an extent that it can control that market and disrupt competition. It is a duty of government to prevent such monopolies, even if MPs are shareholders or provide consultancy services.

I want to outline some legislative changes that I think would make to free markets work better for consumers and the environment.

  • Bundling
    It should be illegal to offer discounts for buying more units than you want, unless there is a genuine cost saving to the supplier for supplying in bulk.
    Our planet is running out of resources. We don’t want to rush that.
    Buying food to throw away raises prices for people who can’t afford to eat enough to stay healthy. That is immoral.
    Buying 2 or more completely unrelated products together, at a discount, gives an unfair advantage to large companies.
  • Stop loyalty cards
    Yes, it’s just ‘virtual’ or ‘time-lapse’ bundling.
    People are ‘loyal’ to organisations that give them consistently good value
    A ‘bribe’ is a different thing
  • ‘Walled gardens’
    If 2 different products work together via an interface then that interface should be made public, so that competitors can compete fairly.
    When third-party products, parts or services are used, a supplier should not be able to withdraw warranty for unrelated parts.
    Purchase of Services e.g. an iPhone should be able to buy music easily from a site other than iPlayer and that option should be made as obvious by Apple as its own service. Microsoft were forced to make other browsers available to compete with Internet Explorer.
    A new phone manufacturer should be able to buy music from Google Play by developing its own software, making calls from their software via the same published interface libraries Google use, so it is not put at a competitive disadvantage by another product/service.
    If the original supplier claims that development costs were high and need to be recouped, then fair licensing costs should be charged, in exchange for full exposure of those costs.
    Such competition causes original manufacturers to provide the value their customers require.
    Manufacturers should not be allowed to keep purchase price low by subsidising from the sale of over-priced consumable items later, such as ink cartridges, vacuum cleaner bags or coffee machine capsules, or by suppying devices such as laser-printers with cartridges that are only half full with toner.
    Devices should not be sold at less than manufacturing cost.
    Total running costs should be made clear at point of purchase, in a standard format, to allow comparison with competitors.
    The ‘cost per standard unit’ of consumable items should be clearly marked. e.g. cost per cup of coffee.
    It is best for consumers if open interfaces are used, so offer tax breaks for companies on products that use industry-wide open standards for interfaces, developed in co-operation with all competitors, as that reduces overall costs to citizens.
  • Stop allowing patenting of non-innovative ideas
    Stop all software patents. They are destroying the software industry. Writing software is hard enough without having to constantly check if the idea you just thought of has ever been thought of before, via your legal department, if you have one.
    Small, innovative companies do not have legal departments, allowing large companies to put competitors out of business.
    Stop patents of any ideas, once the development costs + x% have been recouped. x might be different for industries with varying rates of R&D success. Being first to market already has a significant market advantage in fast-moving industries.

Ordering Scrum sprint-backlog by user-story ‘benefit:cost ratio’ of equal sized jobs, to deliver better business value

WARNING: this entry is in the ‘really quite geeky / technical specialist’ category. It assumes knowledge of an Agile software development framework called Scrum. If that isn’t you then you’ve probably got better things to do with your life. Maybe I need a new blog for things THIS weird?

[ The title of this article has been changed but it needs to be revised further to explain that ‘smallest job first’ is assumed in the examples before ordering of equal size jobs by user-story benefit:cost ratio. 29/4/2014 ]

I was recently introduced to a management fashion for calculating the http://en.wikipedia.org/wiki/Net_present_value of projects. It appears to offer an excellent mechanism for demonstrating the greater value delivered by Agile, if we knew the business value of each requirement.

I started to think about how we might estimate the approximate benefit that would delivered by each user-story and whether, within a Scrum sprint, the order that user-stories were tackled would change the total benefit delivered. In the LinkedIn Agile group I proposed the following thought experiment:

3 user-stories, worth 2, 1 & 1 units of business value and estimated at 20, 10 & 10 story-points respectively. Assuming no dependencies, the same priority and 1 developer, what order do you tackle them in?

“Working in the lab, late one night” these were the results of that experiment.

SprintByValueOrder (only 3 pages, including 2 diagrams)

I would welcome any feedback. Was that obvious? Has it been said before or is it new? Should I develop a mathematical proof and publish in a technical journal? Please don’t make me do a literature. I read REALLY slowly.