Software Prices/Student Discounts

      • I went looking into buying a couple more pieces of dev software lately. The college I go to has student discounts on software. I noticed that compared to typical new-online-retailer prices, different software companies offer vastly different percentages of discounts for student software. Everything isn’t available but for what is, these discount rates range from as little as 25% off retail (AutoCad), to near 80% off retail (Borland Enterprise IDE’s). Some companies have wide variations on individual products: Adobe Photoshop-66% off retail, Illustrator-33% off retail. -And a lot of programs that are priced $100-$150 retail offer almost no discount at all, maybe 10%.

How does this setup work? There seems to be some wierd marketing logic going on here. Who sets these prices, and how do they reach their decisions? Except for AutoCad, it’s almost as if software with larger retail prices is given at a deeper discount, to bring its price in line as much as possible with other near-similar offerings from other companies. Borland JBuilder 4 Pro is listed for the same price as MS Visual J++, which is outdated and non-standard Java to boot, even though the retail price of JBuilder is four times Visual J++. -?- I am not hardly complaining, but how do companies arrive at retail prices, and how much percentage profit do they typically make per sale? - MC

Aside from getting poor college students to buy things they otherwise wouldn’t buy, I think the main reason software manufactures give college discounts is to get brand loyalty. Once you’ve learned Adobe Photoshop, you’re going to buy upgrades and use it in your business later on.

Because of that, I bet they are willing to lose money or break even in order to get you hooked.

As to the exact numbers, I haven’t a clue.

Software with an educational discount is what is known as a “loss leader”. The distributor is trying to sell you a product at a steep discount in the hopes that you’ll buy additional products and services from the company down the road and market share. A product like Photoshop can be daunting for first time users, maybe on your way to checkout, you’ll pick up a reference manual or call Adobe support, generating additional revenue. When you graduate from university, you’ll be more likely to persue employment at companies who purchased these tools at their full price (and who will likely need another license when you’re hired) Maybe you’ll influence software purchasing within the company. Even if you don’t pursue work with the software, the cost you DO pay more than likely covers the cost of production and distribution (although this is not always true). Either way, the distributor wins. The bottom line is that the software distributor is trying to get it’s foot in the door and they want to make their product as competitive with anything on the shelf. It’s a combination of these last two factors that’s led to the variations you’ve seen. It’s more art than science.

Another factor you should consider. In general, the student discount entitles you to use the software for educational purposes. That means that you can NOT profit from it’s use in anyway. The second you sell your development services or a software product, you need to purchaser a development license.

I’ve had a real problem with spelling and grammar this week - sleepy brain … persue s/b pursue :slight_smile:

The marginal cost of a piece of software is nil, the first copy of a program costs millions and the rest cost pennies. I doubt the software company loses any money at all, they just make a smaller profit.

The rationale is as others have stated, have students make an investment in learning the SW, then use it in their professional lives where the student or the student’s firm pays full price for the upgrades.

Apple attempted to do the same thing with hardware back in the 80’s, but it didn’t work because the PC was so widely adopted by business because of cost differentials.

The size of the educational discount may be a reflection of the assumption on the part of the manufacturer about how well the “lock em in” strategy will work.

There may also be tax advantages to the discount.

Im pretty sure they come with no tech support. You’re supposed to get that in the classroom, see?

      • Ha-ha-ha-ha-ha-ha-ha!!! You mean, like live people? -No piece of software I have ever bought had tech support! - MC