5 Not So Obvious Reasons Why Software Costs So Much

It's understandable why it costs so much for gaming laptops, servers, and wireless printers. Each one is a physical product with lots of parts. Not only do they have to be manufactured, but they must be stored/shipped too.

Do you know why it costs so much for software? It doesn't cost anything to duplicate, plus people can download it from anywhere. If you're curious, we'll take a look at some good reasons why it's sometimes very expensive.

1. It's Expensive To Make

It must have taken a long time to design and manufacture the Aruba 2930F 24G PoE+ 4SFP, but the same amount of engineers probably work on a piece of software. Think about how much money an experienced programmer earns.

The company has to rent a building to carry out the work, and they spend lots heating and cooling it. In other words, even though a piece of software doesn't look expensive, a large amount of money went into making it.

2. It Needs To Be Updated

Once you sell HPE DL380 GEN10 servers, you don't need to do much. If a customer calls, you might have to answer a question. When there is a problem with the product, you'll need to send out a new one as fast as possible.

When you sell software, you need to keep working on it non-stop. If there are any bugs, it will stop it from working. Engineers are always working on upgrades, so a company could be hard at work for decades.

3. It Saves A Company Money

If a company doesn't have certain software, they might spend $10,000 per month doing something manually. A company could offer them software for $8,000 per month, which would save them a few thousand per month.

The software likely won't be worth $8,000 per month, but if the company doesn't buy it they'll be losing money. Would a company be willing to lose money to protest, or will they try to save as much as possible?

4. Software Needs Hosting

Most of the software available today lives in the cloud. There aren't magical servers online that let companies store data for free. A company will usually pay huge sums of money to keep its software available non-stop.

If a company stopped paying its bills, customers wouldn't be able to use the software. When they charge a large fee, some of the money will be going towards future hosting costs. If they can't afford it, they'll be in trouble.

5. Some Software Is Niche

Everyone is used to software like Skype and Zoom because we've been using them so much during the pandemic. Those types of companies can market their products to almost every single person in the world.

When you have a niche piece of software, it's different. If there isn't a large number of customers who need it, you'll have to charge more. Companies that don't charge lots will only be able to grow to a certain size.

Don't Feel Bad About The Cost

I hope you don't feel too bad the next time you spend lots of money on software. There are more than a few good reasons why it costs so much.

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