How much does software like Photoshop cost to develop?

[Shieldmaiden]

This came up in a piracy discussion and it's something that has crossed my mind before. Does anyone have any idea of how much that kind of thing costs and what the sales figures are like? My gut feeling is that they'd make just as much, if not more, money with a price point that didn't restrict legit copies to businesses and professionals that can already afford that kind of outlay, but it's something I know very little about.

[muddi900]

Quite a lot to develop, but I assume more to support.

Some internet suit mathematics;

Suppose Adobe employs x number of developers at y USD per week. Suppose it takes 3 years of to develop the Photoshop suite.

3 years ~= 156 weeks

Development Cost = 156xy

Of course, development does not stop their. There are bug patches and general enhancement updates that are given out for free to the licensees. Suppose the a period of 2 years before the next paid update.

2 years ~= 104 weeks

Development costs = 260xy

Now suppose the overhead and administration cost is z for Adobe for all their projects, suppose 4, so overhead costs for the Photoshop project would be z/4 over 5 years.

Approx. Net Cost = 260xy+(5z/4)

A extensive project like PS would have at least 60 developers, I assume,

so let x = 60

They'd be paid around 1200 a week average

so y = 1200

And a company like Adobe has a lot of overhead, assuming half a million annually.

so z = 500,000

Hence;

Cost = (260 * 60 * 1200) + (5*500000/4)

= 24,970,000

Approx $25 million

[TheKeck]

I'm not sure how this factors in exactly but one thing to keep in mind is that it's not like they build photoshop from scratch every three years. Photoshop is a thing continually evolving at this point. Adobe will decide on new features they want to build and bugs they want to fix and task their development team with implementing those for the next release.

[muddi900]

I think they did a major overhaul when they started the CS series, so that's what I was considering. Regardless, the payroll would remain the same.

[Wraith]

While I won't buy Photoshop for $700 (I'm using this at the moment) or whatever a full retail version costs, I will say there are a lot of software products out there from much smaller companies, that arguably are much less complicated and required less development than Photoshop, that are priced much higher than Photoshop or even the core Creative Suite. Start looking at various software for businesses, stuff that never enters into the equation for home office / self employed use, and you'll not really be surprised to see a software package priced at $2000 to start, and an additional cost per seat, and then yearly support costs.

And when you think about it from a business perspective, if they've been using Photoshop / CS for years, they have a lot invested in it beyond the cost of the software itself. It's almost always going to be more affordable to buy a new version of Photoshop than to spend so many man hours learning an alternate software package, and getting everything to work with it. Plus most heavy Photoshop users have probably invested heavily in third-party plugins that may not be easily replaced. And of course you have to make sure all your existing files are still usable.

TLDR: Businesses will gladly pay for it, at its current price. It's cheaper than switching. It doesn't seem so crazy-expensive when compared to other software in the business world.

[TheKeck]

Originally Posted by muddi900

I think they did a major overhaul when they started the CS series, so that's what I was considering. Regardless, the payroll would remain the same.

I question how much that "major overhaul" really entailed. Still, like I said, I'm not sure how it would factor in. I'm not saying your estimates are high or anything. I guess the only real point is that ongoing enterprise software like that pretty much has a yearly cost, not so much just one total number.

[muddi900]

Originally Posted by Wraith

While I won't buy Photoshop for $700 (I'm using this at the moment) or whatever a full retail version costs, I will say there are a lot of software products out there from much smaller companies, that arguably are much less complicated and required less development than Photoshop, that are priced much higher than Photoshop or even the core Creative Suite. Start looking at various software for businesses, stuff that never enters into the equation for home office / self employed use, and you'll not really be surprised to see a software package priced at $2000 to start, and an additional cost per seat, and then yearly support costs.

And when you think about it from a business perspective, if they've been using Photoshop / CS for years, they have a lot invested in it beyond the cost of the software itself. It's almost always going to be more affordable to buy a new version of Photoshop than to spend so many man hours learning an alternate software package, and getting everything to work with it. Plus most heavy Photoshop users have probably invested heavily in third-party plugins that may not be easily replaced. And of course you have to make sure all your existing files are still usable.

TLDR: Businesses will gladly pay for it, at its current price. It's cheaper than switching. It doesn't seem so crazy-expensive when compared to other software in the business world.

Enterprise applications are a whole different beast. They come with very extensive application requirements.

[jeffbax]

Originally Posted by BigJonno

This came up in a piracy discussion and it's something that has crossed my mind before. Does anyone have any idea of how much that kind of thing costs and what the sales figures are like? My gut feeling is that they'd make just as much, if not more, money with a price point that didn't restrict legit copies to businesses and professionals that can already afford that kind of outlay, but it's something I know very little about.

It's more than just price but also supporting years of existing. Adobe's stuff is incredibly complex, and have to maintain years of baggage and file formats. While I don't use it, there's a reason they are the industry standards. Their software covers every base, not just the 80% of common tasks I get along fine with Pixelmator for $29.99

Ultimately, there's no such thing as an objectionably fair price. To the businesses that make millions upon millions of dollars with these tools, the $700 or whatever cost it takes to get the suite is completely fair. To a non-professional individual whose needs are really likely well served by cheaper alternatives it is high, but even for a professional designer who buys one copy every few years (believe it or not, the hammer you have now is likely going to be a pretty good hammer for years to come and you don't need every single version) it's still justifiable. It puts food on the table.

Somewhere at Adobe, they've done the cost benefit analysis to determine this price point and they believe it is the right one.

That said

1) fulltime development staff
2) fulltime QA and regression staff
3) marketing and distribution costs
4) customer support costs (which is likely lower by virtue of a $700 price keeping people from buying it)

Are all significant. Ultimately though, it's not about what does it cost to make the suite, but what it is worth to those who need it.

[TheKeck]

Pricing can be a very funny thing. At my old job I worked on Quickbooks Enterprise Solutions. They talked one time about how there are some companies who won't touch the product simply because they don't take software seriously that "only" costs $5000. If we simply charged 20 grand for the exact same thing, we could likely pick up some of that business.

[civil_dead]

I'm currently paying $30/month (got a year-long discount) for the Adobe cloud system. That gets me access to the entire Adobe suite--from web to graphics to video--for two machines (Mac OS on my desktop and Win 7 on my laptop). For me, that is beyond worth the cost. I get the latest versions of industry-standard software that lets me shuttle files between not only my personal machines but work machines if I'm working on-site (currently freelancing). At $360/year I feel I am getting a great deal considering I have the entire Adobe arsenal at my command. When my year is over it will jump up to $50/month ($600/year), at which point I will reassess the situation.

Psychologically, breaking it down into smaller chunks makes me feel better about the cost. I do have CS 5.5 Master Collection, but that's only for a Mac, whereas this route lets me do the Mac/PC thing. For me Adobe stuff is really the only way to go, as that's what I know best and it is also what the industry uses.

[Bone]

Also consider that I can probably use Photoshop on my PC and still open files from 1996 that were originated on my Power Mac, some 10 Photoshop iterations and many OS iterations later. The support and backwards compatibility is huge when you are THE industry standard for desktop publishing.