Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

Right. But there's a couple of things I'd like to point out.

1. These days, for Softwares, development costs are fixed, but there are also marginal costs associated with operations, especially when the product is on cloud. Yes, support is part of the equation, and different users get different amount of support, but that's not the only marginal cost. (Trust me even free ones get some support)

2. This move probably isn't about recovering back marginal costs. It's about recovering the fixed costs. The pricing model limits newer features like generative design to paid users, which is expected, because they need to hire engineers to build new features and maintain existing product. So they're limiting that functionality to paid customers. In the bike analogy, it would be something like buying accessories for your bike.

3. The change in pricing model does reflect what you're actually saying. There is still a free tier which allows for basic usage. But all the things that contribute to additional costs to the company are being taken away. You get 10 documents, but for more you'll have to pay. Because with cloud products, to store more data, they would probably either have to maintain servers additional servers or pay cloud providers for storage, in either case, it costs money.



Why would you move your product into the cloud if it only increased your marginal costs? You move into the cloud to increase your marginal revenue.

You've got this argument by the wrong end. You don't raise your prices because you had to because, well, cloud. You move to cloud specifically so you can raise your price. You might also argue that you move to cloud to reduce marginal costs of distribution, but that's arguable.




Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: