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Education Programming Software The Almighty Buck

NSF Wants To Know How Much Software Really Costs 181

Posted by CmdrTaco
from the tree-fitty dept.
eldavojohn writes "It's no secret that the actual cost of software is very complicated. Sure, the companies that write software are spending money on it, but when that software is released, it doesn't stop costing money. You can probably think of a number of relatively tiny things that add up — especially if you're a system administrator — like the man-hours spent patching software to avoid a nasty infection spreading quickly. The bigger debt is that old piece of software you paid a bunch of money for back in 1998 that you're critically dependent on, but it has no support and hasn't been updated in years due to any number of reasons. Well, the National Science Foundation paid Gartner almost half a million dollars to find out what it truly costs to bring an organization to a fully supported environment. According to Gartner, this hidden liability or 'IT debt' is at $500 billion worldwide right now, and in five years it will be at $1 trillion. Along similar lines, a company called Cast that makes software quality tools reported that your average business application comes with a million in IT debt (PDF). And if that's not misapplied enough for you, they estimate that the debt is $2.82 per line of code in the application and also that it's on average higher in the government sector."
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NSF Wants To Know How Much Software Really Costs

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  • Ya this is retarded (Score:4, Informative)

    by Sycraft-fu (314770) on Monday October 11, 2010 @10:10AM (#33858888)

    Oh you have to work to keep something up? No shit, never heard of that before. I mean our building we are in, we spend nothing on that. Well except for janitorial staff. Oh and lightbulb replacements. And roof maintenance. And new furniture. And HVAC maintenance. And elevator maintenance....

    Seriously, when you buy something the total cost is never just the up front price. You don't plunk down cash and then never again have to spend any time or money for the thing to work perfectly. In some cases it may be direct monetary costs at certain points. The roof at work is a good example, we had to have it largely replaced a couple years ago. Not because of a problem, but because the building is like 40 years old. Had to pay tens of thousands of dollars to do that, which was budgeted. Some of it is indirect, just regular maintenance you have to pay someone for. Our custodial staff is a good example. While some of what they do, like say wash windows, is just aesthetic, much of what they do is necessary upkeep to keep the building in good condition. There isn't a precise dollar figure on each job they do, it is just a general cost that is their salaries. Some stuff has just a time cost, more or less. Like yesterday I dusted off my MIDI keyboard. Needed to be done both because the dust is annoying and because excess dust can work in to the electronics and cause damage.

    Why would software be any different? Yes, you have to spend time and money above just the initial cost. You have to patch it, some software has yearly support contract cost (like say RHEL), you have to have support staff to make it work and help people with it, and so on.

    I fail to see how this is a "debt" of any sort. It is a "cost" like any other. The more software you use, the more cost ther'll be not just purchase cost but also support cost. This is surprising to nobody who understands how this shit works. This is also why the price tag on software is often not a big deal. Doesn't matter is a package costs $50,000 whereas another costs $50. If the $50,000 ones saves $100,000 in support and other costs (like lost productivity) it is worth its price easily.

    To me this sounds like the kind of thing a dumb manager would say: "You mean that price we paid for our software 6 years ago isn't the only thing it cost! Holy shit we have software debt!"

  • Re:And..? (Score:3, Informative)

    by zippthorne (748122) on Monday October 11, 2010 @11:11AM (#33859500) Journal

    Parent is not missing the point.

    The point was this: as the library of off-the-shelf solutions grows, it's possible that what what you once had to do with custom software is now neatly covered with some vendor's standard offering, or in the parent's case, what he had to do with expensive vendors' software can now be done with even less expensive open source solutions.

  • by DragonWriter (970822) on Monday October 11, 2010 @12:17PM (#33860188)

    I fail to see how this is a "debt" of any sort.

    "Technology debt" (or "technical debt") is referred to as a debt because it has effects that are very similar to financial debt. First, it has a cost to resolve, which is analogous to the principal of a financial debt. Second, it has imposes ongoing costs until it is resolved, which works like the interest on a financial debt. Thirdly, the starting value of the cost to resolve -- the principal -- is often greater than the costs which could habe been paid out of pocket initially instead of incurring the debt, making it analogous to the various initial costs associate with many financial debts.

    To me this sounds like the kind of thing a dumb manager would say: "You mean that price we paid for our software 6 years ago isn't the only thing it cost! Holy shit we have software debt!"

    The "technical debt" terminology was invented by people who understood the technical problems and the consequences (mostly, of trying to minimize the initial costs of developing or acquiring technology-based solutions to business problems) as a means of explaining the issue to managers and executives, who generally understand financial concepts like "debt" much better than they understand technical processes.

     

  • by roman_mir (125474) on Monday October 11, 2010 @12:37PM (#33860372) Homepage Journal

    Well, when your own opinions do not hold water, then somebody who knows can point out all of the fallacies of a comment such as yours and explain how it is incorrect and why, not for the sake of a person such as yourself, who is uninterested in opinions, but for the sake of people who may have legitimate question and are interested to see what is happening not only from point of view of Keynesian shamanism.

    And of course, people that know things could point out that since we're falling into a deflationary spiral,

    - definitely there is deflation, but it is completely overpowered by the existing inflation.

    Recession is about deflating prices, but inflation is about increasing money supply, both things can and are happening right now simultaneously.

    The prices on such things as houses, seem to be stable, this is the inflation in action. In reality prices should be falling. Of-course the gov't doesn't want to have falling house prices, in fact just about a week ago Bernanke came out with a statement that the Fed now has a new mandate: mandate to increase prices.

    Gov't doesn't want house prices to fall because banks (and by proxy the gov't) are holding toxic mortgages right now on the books, if the house prices fell (which they should do, because jobs are disappearing, so clearly dwelling prices should go down) then most banks would have failed immediately. You'd have banks crash right away, it would force US bonds to crash and then US gov't would go bankrupt because it wouldn't be able to refinance its short term mortgage (it is running on short term teaser rate mortgage right now).

    money printing is actually an attempt to stabilize inflation at its historic 2%, permitting job growth and

    - this person, who wrote it, is insane. Saying that you STABILIZE INFLATION BY INCREASING MONEY SUPPLY. That's right. He thinks (it's a he, right?) that inflation can be STABILIZED by printing money.
    No, you do not stabilize inflation by printing money. You cause inflation by printing money. Inflation is an expansion of money supply.

    Also saying that this will permit job growth - this comes from Keynesian shamanism. You see, by devaluing the US dollar, Bernanke believes he'll make US labor less costly, meaning that capital investments will come back to the USA if its labor is seeing as cheap. However while it is true, that inflation causes people to lose purchasing power and thus make them cheaper in those terms as opposed to nominal terms, USA has a different problem on hands - it has created an environment, where generally cost of starting and doing business is too expensive regardless even of the wages. The ever-increasing regulations, the income/payroll taxes, the subsidies of large monopolies makes barriers to entry for new businesses to high and at the same time the artificially low interest rates and thus a weakening currency prevents credit from reaching the private sector, because the banks loan from the Fed at near 0% and then 'invest' into US bonds at higher rate and make the spread. In this situation if the interest rates all of a sudden went up above the interest rates that the US bonds are promising, all those banks would immediately lose their profit and become insolvent. They wouldn't be able to return that money with that interest.

    What inflation does in real terms: it increases prices of many goods, where prices should fall, this especially is true in housing and rent (and wages) and at the same time it forces the prices for necessities to rise.

    Again, Bernanke just said that he wants to see prices rise much faster than they are rising right now. Isn't he concerned about the poor Americans who have to buy the food, the fuel, who have to rent?

    preventing a Japan-like lost decade

    - Japan never had the same problem as USA. Japan never stopped their production, never lost their manufacturing. Japan had huge surpluses, it didn't have the debt, it had very strong

  • by roman_mir (125474) on Monday October 11, 2010 @01:13PM (#33860712) Homepage Journal

    You say "more inflation" as if we've been experiencing high inflation already, when in fact inflation has been unusually low for quite some time (lower than the Fed's target level, and it's only just now they've considered doing anything to bring it back up).

    - well, that's why /. needs an economic section.

    The inflation is rampant. If there was no inflation, you would have seen what really happens during recessions - deflation of prices. And prices should deflate, home prices should fall dramatically, much lower than they are now, and many other things should also deflate in prices. You are observing inflation, which is what the Fed is doing - it is expanding the monetary supply.

    The inflation IS expansion of monetary supply. You are looking for price inflation, but prices ARE inflated, they should have been much lower right now if the Fed didn't put its dirty little hands into this.

    The Fed is not satisfied with the current inflation levels and it wants the prices to go higher, I have explained the reasons in an above comment in this thread [slashdot.org], it's lengthy, I do not want to retype.

    Suffices it to say that if you look carefully at commodity prices, sugar, cotton, wheat, gold, meat, whatever, prices are rising. I have left a comment [slashdot.org] about it a bit earlier on /. as well.

    Many economists believe that since the main problem with our economy now is a lack of demand,

    - let us stop here. First, all of the economists who believe this should not be considered actual economists.

    The problem in USA is lack of production, not lack of consumption. Should USA start producing again, it will be able to consume. Here is a simple mental exercise, I mentioned it [slashdot.org] earlier:

    If all currencies devalue, which countries will be better off, those who have production capacity and manufacturing sector in their countries, or those who do not?

    Countries with productive capacities will be fine, they'll aim at their own markets and their quality of life will suffer initially, but eventually will go up.

    Countries without productive capacities will not be fine. They have nothing to offer even to their own citizens, they will have shortages of everything. All goods and services will become scarce and quality of life will go down.

    an increased money supply and higher inflation is what we need to get it moving again. - no. Another mental exercise: what will happen if everybody in the country was given a newly printed stash of cash, let's say a million dollars? Would that help to restart the economy or would that crash the currency?

    No amount of borrowing and printing can help economy that is losing it's productive capacity. What is needed is the return of real investment capital, real credit, which right now is being eaten by the gov't, that stimulates spending and not savings, which are needed to re-create the productive economy. You see, a society without production and which only is relying on subsidies is not an equivalent player in an economy that has producers. US consumer will not be subsidized forever and no amount of stimulus spending by government can make USA a productive society again.

    The only correct way to make USA a productive society is to allow the private sector to have access to the credit that is currently used by US gov't, who spends it on stimulus and wars and various gov't programs, even though gov't is basically insolvent right now. Should the US bond holders decide not to continue holding the bonds and not rollover at the end of their very short holdings (6 months to a year rather than 10-30 years) the US will be obliged not only to pay interest, but to repay the principal, which they of-course woul

  • by martin-boundary (547041) on Monday October 11, 2010 @06:22PM (#33863784)
    Nonsense. The health effects are not linear with the number of work hours, they are more pronounced the more hours you work. Moreover, working over the weekends in addition to a full working week directly reduces the recuperative function of time off. But you're just trolling, I guess.

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