Software industry discovers it has lost its immunity from battles over pricing

Article Abstract:

Software publishers compete aggressively with each other, engaging in price wars. Spreadsheet and word processing software are areas in which pricing has become a key factor in marketing. Price cutting strategies are popular within the software industry because production costs are minimal compared with the $300 discount price for much business software. Mail-order houses and warehouse stores offer top quality software at discounted prices, but buyers can often obtain the same software for less than half the discounted 'street prices.' IBM PC software vendors used to avoid price competition because most customers were loyal to particular products such as Lotus Development Corp's Lotus 1-2-3 spreadsheet, WordPerfect Corp's word processor and Ashton-Tate's dBASE data base software. These packages carried a list price of $495 or more and sold at discount for $250 or more. Borland International Inc initiated price cuts on its Quattro spreadsheet for people who switched from a competitor's product. Many vendors are employing price- cutting strategies since Microsoft Corp introduced its Windows graphical user interface.

Software, Microsoft Corp., Prices and rates, MSFT, Lotus Development Corp., Microsoft Windows (GUI), Borland International Inc., LOTS, Price cutting, Competition, Promotion of Product, Price, Computer Software Industry, Lotus 1-2-3 (Spreadsheet software), Software packages, BORL, Borland Quattro Pro (Spreadsheet software)

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Defense contractor expects to report net fell in quarter

Article Abstract:

Dynamics Research Corp reports a 24 percent decrease in net income for 4th qtr FY 1990. The company expects to report that net income dropped to about $1.3 million, or 29 cents a share, from $1.7 million, or 34 cents a share for the comparable period in 1989. Dynamics Research Pres Albert Rand claims the decline reflects lower operating margins resulting from increasing costs for personnel and medical benefits and company efforts to continue developing new commercial product lines while bidding on additional federal contracts. Ninety percent of Dynamics revenue comes from government contracts, primarily a contracts to maintain software for the US Navy's Trident submarine program, the US Air Force's F-16 fighter planes and the Air Force's Hanscom Field operations. Dynamics expects to report that net income for 1990 decreased 11 percent to $3.2 million from $3.58 million.

Finance, Profits, Government contractors, Financial Analysis Software, Profit, Defense Contract, Contractor, Losses, Dynamics Research Corp., DRCO

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Hello, World! Audible chats on the Internet

Article Abstract:

A small Israel-base company called VocalTec has developed software that enables users to send two-way voice communications on the Internet at a fraction of the cost of conventional telecommunications. VocalTec says that its Internet Phone software allows users to call any other user in the world at the same price as an Internet local access, which can cost as little as $2 per hour. The software is being sold on-line until Mar 1995 at $49 per copy after which the price is expected to go up to $99. The software requires that the user's system is equipped with a 14.4Kbps modem, a sound card, a microphone and at least a 486 processor. Early users of Internet Phone say that although the software does not provide the quality of conventional telecommunications, the quality is reasonably good and the cost is very reasonable.

Software Publishers, Communications Software NEC, Product introduction, Product Announcement, Internet, Technology development, Telecommunications software, Voice communications software, Vocaltec Inc., Internet Phone (Voice communications software)

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