AndyH Loc: Massachusetts and New Hampshire

So I recently made the mistake of somewhat derailing a thread on PP software by talking excessively about how corporate decisions are limiting our choices in PP software. I thought I'd repost some thoughts here, to get some ideas from people more current than I.

In all things photographic, and most things we buy on the market in general, there is a long term trend toward consolidation of makers and sellers as industries mature. This is due primarily to the increased capitalization required as technology and plant investment increases, exponentially in recent years. In the early days of the automobile there were literally hundreds of manufacturers, but the consolidation began early, and the rate of consolidation increased rapidly from 1929 to 1960. Even highly successful firms like Packard and Studebaker were eventually forced to merge - combining the Studey manufacturing capacity with Packard's extensive capital. Packard was at the forefront of technological development by the mid 50s, with innovations in air conditioning, suspension (torsion bars), and other areas. Yet the combined firm was not able to keep up with either plant or innovation, and failed within five years. A major maker like Ford could survive a disaster like the Edsel, but a single misstep (inevitable in an evolving industry) could doom an entire company. The aeronautical industry also provides numerous examples - Curtiss Aircraft being the leading one, going from number one to "out of the industry" in little more than a decade. It's like baseball teams - a big budget franchise can survive a terrible contract, but a smaller one will be doomed for several years.

Going to the photographic industry, I look back at my beginner years, when there were a couple dozen choices, ranging from high end makers like Alpa and Rectaflex to entry level dynamos like Miranda, Petri, Mamiya Sekor, etc. We're down to five now, depending on where you set your standard for "serious" cameras - Nikon, Canon, Sony, Fuji, and Pentax come to mind. Minolta, one of the makers who provided mid to high range equipment, is totally gone. From dozens of non OEM lens makers, we seem to be down to two - Sigma and Tokina. Virtually any hardware item you can think of now has a fraction of the suppliers it used to, an inevitable result of the higher and higher capital investments needed to develop and manufacture the latest high tech gear. Depending on what reports you choose to believe, some of the big five may be in jeopardy, at least insofar as producing serious cameras is concerned. This represents a fraction of the business for most of these industrial giants - Nikon is into serious optical goods, Canon's reprographics business may be bigger than their photographic one, and Sony is into, well, everything. Will we soon be in a position where they make economic decisions that determine our choices for us? Is the DSLR, at least at amateur pricing, doomed in favor of mirrorless? Will the entry level "serious" amateur gear become a thing of the past completely (doomed by the development and ubiquity of camera phones)?


When it comes to software, there is a different kind of threat - as consolidation is just beginning. At work, I've been forced to go to the ubiquitous Microsoft Office - even though products like Word Perfect and Lotus 123 were arguably superior, even in their dying days. Harvard Project Manager was a robust program that disappeared quickly after Microsoft decided to enter the field with MSPM. Corel, Adobe, Intuit, and a few other well capitalized firms dominate broad market sectors, and that's just in consumer/business products. I can only imagine what has happened in operating systems and other tech sectors that are far over my head. I've gone to an Office subscription myself, as well as Lightroom / Photoshop subscription. As I've said elsewhere, I'm pretty happy with the updates and pricing - there are reasons that corporations have moved in this direction - and some of them have real consumer benefits. With subscriptions we get regular, minor improvements and upgrades - we no longer have to wait for the next big thing and can predict our expenses with some accuracy.

At work (a small nonprofit, which operates much like any small business) we've been forced toward the new subscription model, not only on Office and QuickBooks, but on a variety of boutique software programs, including our lending software, AutoCAD, and rental property management software, and my favorite boutique product "Housing Developer Pro" developed and sold by a tiny and highly talented group in Pennsylvania. In rental management, our older system, which originally cost less than a grand for a permanent license is no longer produced and the producer out of business. I can either buy a system with a five figure initial cost AND an annual user fee per seat - mandatory - or wait until the old package no longer runs on our latest hardware. The older versions of many products are just no longer supported, and if we want to keep using these products we have to switch products or switch models. There will soon be no middle options.

This is because the predictable revenue stream has become the desired outcome for American business - the American capitalist model, not a Soviet era state where the "Software Industry Consortium" can dictate how a corporation spends its profits for the greatest benefit. If they want profits from LightRoom to subsidize Illustrator, or their takeover of some new market, that's the business of management and stockholders, not buyers of the product. If they raise the prices too high, a new competitor will arise, and we'll be free to purchase it. But as entry barrier costs rise, it becomes less and less likely. I think that the inevitable result of this will be a choice between a variety of megacorporate subscription products or independent freeware / shareware versions with features that are less and less competitive with the titans of industry or geared toward very specialist uses. I can imagine a world of photo software where there is no lingua franca, and you need to use more than one product individually on your images to get what you want.

The inherent nature of capitalism dictates that consolidation happens as industries mature - infrastructure gets more and more expensive at each stage of expansion and adoption, and requires capital investments at logarithmic levels of increase. New tech attracts startups and entrepreneurs, but as the product stabilizes, the number of makers always shrinks, sometimes to the point of near monopoly. If you want an unregulated or lightly regulated capitalist economy, that's just how it's going to turn out. Consumer behavior can make some difference in corporate behavior of course, but it can't and won't change those long term trends. So like it or not, subscription service is eventually (in my opinion) going to make the software license as much an artifact as the television antenna or twisted pair landline.

I may very well be wrong, of course, but these economic trends aren't new, and they seem to be accelerating.

What do you think? Am I being overly pessimistic here? Or will we really be down to a "Big Two" or "Big Three" in gear suppliers and a choice between the handful of dominant software suppliers offering subscription only software and a handful of less capable indies offering "use it forever" licensing?

I don't know, but I'd like to hear from those whose knowledge of the sofware and photographic gear industries is superior to mine. I'm just an advanced (I hope!) amateur in photography, but I'm seeing these limited choices in my business life more and more frequently.


Andy

Fotoartist Loc: Detroit, Michigan

I'm a student of Capitalism. I have faith in its philosophy. It's the single biggest factor that has caused much of the world to achieving prosperity and eradicate poverty wherever it is tried. However, I'm not optimistic for its future as the Progressive Left from our country and the world over are constantly trying to replace it with their brand of socialism in their drive to make us all equal. Equally POOR AND MISERABLE.

AndyH Loc: Massachusetts and New Hampshire

So how do you think this will affect the future of the photographic industry?

Is my view pessimistic or optimistic? And is it inevitable?

Andy

rjaywallace Loc: Wisconsin

Andy, you’ve nailed the current trend pretty well. But, with my usual conflicted logic, I have a couple of observations:

- Is there really all that much difference between purchasing a subscription and purchasing a licence that must be purchased all over again when a product’s next major update version is released? I initially hated LR’s subscription plan, but the continuing update model makes a lot of sense. Years ago, as an Intuit tech support employee at a Tucson call center, I thought the company should sell a subscription-like product where the user could count on always having the latest most up-to-date version every time they launched it with only their data stored locally.

- Didn’t Lotus 123 and Word Perfect die because the economic model to support them was no longer there? In my view, we should give Gates his due - Word and Excel are better, tho less easy (or impossible) for a user to program/modify.

rmalarz Loc: Tempe, Arizona

Andy, you've made some insightful observations here. However, in the software field there are a lot more choices than MS. My workstation, for instance, is free, other than the cost of hardware. It also runs a bit faster than similar systems running MS as an OS. One has to give Linus Torvalds a big round of applause. No subscription, no licensing fees, no payments for anything, including the OS. Fedora is a very accomplished OS and Open Office provides everything MS Office does, plus some, without payment of any kind.

The interesting thing about these free products is their apparent lack of major flaws. I attribute that to the fact that the applications usually list the developers along with their email addresses. Whereas MS tends to let their customers do their debugging, The folks, whose personal information is attached, tend to be very careful with their releases. They also provide support a bit better than the big players.

Just recently we, photographers, noted a change in an addon that many feel is indispensable. The company that originated the application was purchased by a behemoth in the industry. That company then provided the software at no charge. For some reason, the software languished in any new development. Though, it was perfectly good as it was and probably needed nothing new. Then that package was sold to another company who immediately put a price tag on it. What was new and exciting about the "new for a price" nothing anyone who worked for the new owner would point out. So, now people are paying for something that was free for a period of time. I'm going to be interested in seeing how long that one lasts.
--Bob

rmalarz Loc: Tempe, Arizona

I think that would depend on who one supports. NIkon, at the moment, is having difficulties. It's certainly not with their products. The difficulty lies with management. They are making some unwise decisions. Again, it's going to be interesting to sit back and watch things develop. (photographically speaking of course)
--Bob

Fotoartist Loc: Detroit, Michigan

Well, that's an awful broad question. But to narrow it down, is subscription, streaming services, Uber etc. going to replace ownership? I would say, have faith in mostly unfettered Capitalism to make it fair and a win-win situation for the most people. In other words, the marketplace will sort it out far better than elite socialist tinkering can.

AndyH Loc: Massachusetts and New Hampshire

Good points. On the first one, I'm actually okay with the model, for the most part, at least on general purpose products with big consumer user bases. In the long run, I think it will provide an improved product at a reasonable cost - the Model T philosophy. It's in the smaller boutique uses that I see problems, where there isn't a market big enough to support competition. Like I said, I'm seeing this already in the professional products I use at work.

On your second point, this is my daily life, the tool with which I earn my daily bread. I remember the days of Visi-Calc and MultiPlan. Lotus technology dominated the spreadsheet market for many years, it was a far superior and more capable product than Excel. Up into the mid-200s, I had to submit funding applications to the state in this format because it was the lingua franca. That changed faster than I can even remember - I'd have to go look at old spreadsheets to see when the switch was complete. It's really quite remarkable. But now, MS has dominated the market completely; I don't think I can find another product beyond shareware today. The did it by improving the product in leaps and bounds - I'm just guessing, but I'd say they went from inferior to Lotus to vastly superior in a span of about two years. That's amazing in a field where the product wasn't cheap and the investment in learning was already enormous.


Interested to hear your thoughts on this. I'm hoping others will chime in as well!


Andy

AndyH Loc: Massachusetts and New Hampshire

Interesting and thought provoking! In my business, I really have no choice but to go MS, as we are often required to submit complex work product to others in the native format. I've tried open office, and have it set up on my laptop, but due to occasional conversion issues, I generally work in the Excel/Word/Project formats. In the longer run, I think that the continued existence of these indies is going to depend on their ability to export seamlessly into the big format(s). If you don't have Excel, you can't risk exporting an Open Office spreadsheet into Excel format without the ability to check it over for errors and fidelity loss. As getting funding, or not getting it, on a multi-million dollar project depends on these complex, multi-page spreadsheets, it must be error free, and OO has ben unable to open a few of them in Excel format. Analysis of multi-year tax credits and cashflows is often the product of collaborations among a number of colleagues at different entities (consultants, brokers, accountants, etc.). I really don't have any choice in my particular business.

Will MS make it easier or more difficult for other programs to read files written in their formats, and to export to them? I think that's going to determine our software future in the longest of runs.


Andy

wrangler5 Loc: Missouri

As a long time fan of Wordperfect who detests MS Word, my recollection is that Microsoft won that battle, at least in the legal world where I saw it, by fixing their network software so that WP required at least one full time tech support person to keep it working across the office, while MS Word always just seemed to work seamlessly. (I assume something like that happened with Excel, although we didn't use spreadsheets much in my day - my recollection is that the original MS spreadsheet was a complete turd compared to 123 or my favorite, Quattro.) Our 200+ law firm finally gave up trying to keep WP running and switched to Word, which became one more line on my list of negatives that led me to early retirement from that place.

I believe MS used this same power over the OS to resist the move to make Internet Explorer deletable, so users didn't HAVE to have it on their computers. IIRC, they turned it into the base for the file management system - almost certainly NOT what one would choose from a best-practices software design standpoint, but hey, it let MS claim they couldn't get rid of IE because it was just part of their OS. (I've read that Internet Explorer was, for a long time, THE preferred avenue of attack for hackers - don't know if that's still true.)

IMHO this concentration of power was one of the reasons to split MS into separate companies for operating systems and applications, but cash and politics kept that from happening. As usual.

AndyH Loc: Massachusetts and New Hampshire

That certainly reflects my experience. I don't know about Word Perfect, as we switched early, but I've heard this from several professional authors and tech writers whose opinions I trust.


As I noted above, in spreadsheets it was game over very early. As I recall, Excel went from "turd level" to industry standard in a period of about two years. I vividly recall Lotus doing the same thing to Visi-Calc a few years earlier.


Andy

Bobspez Loc: Southern NJ, USA

If you are working on multi million dollar projects, the cost of software is just a small business expense and a tax deduction as well. For some of us that are not in business, and using software for just our own projects, most of these concerns are not applicable. Documents imported into open office from excel do need a bit of tweaking, but once in open office have all the benefits of excel with none of the costs. Older software and hardware doesn't need to be updated or supported to be used. My desktop is running Win 10 64 bit, but my 12 year old laptop still runs Windows XP SP2. I stopped updating it because it didn't have the ability to use SP3. But for email, browsing or shopping on line it still gets used daily. I've had the Adobe CS 6 Suite since it came out, and see no reason to ever upgrade to a CC subscription. I haven't paid for software in years, and don't ever plan to.

Fotoartist Loc: Detroit, Michigan

Photoshop, the greatest piece of software in history for photographers and visual artists came about under Capitalism. They won't take that away from us because of Capitalism. Capitalism will find a way to keep it a win-win for everyone if you just leave it to the free market. Businesses are attuned to market forces.

Peterff Loc: O'er The Hills and Far Away, in Themyscira.

Do we have to make this a pseudo-political discussion? Whilst you may have valid points to make, you're heading this towards the attic. Perhaps it was Andy that set up this discussion, but we don't all need to take it into the abyss.

rgrenaderphoto Loc: Hollywood, CA

It is all a battle of marketing. Microsoft did a superior job in promoting and selling Office apps to business vs Word Perfect's (and Novel) resting on their laurels of early successes while the crew from Redmond went out and won hearts and minds. OPen Office has never bene more than a niche product because of incompatibility issues with Office products. Standardization for corporate IT applications is a sound business decision. Minolta is not gone, is was just absorbed by Sony; probably some of the great features on Sony mirrorless cameras came from Minolta's tech base, which is why they were bought in the first place.

Software vendors move to subscription models because it increases revenue, which after all, is the reason they are in business in the first place. Microsoft saw that Office sales were becoming flat due to market saturation, so the subscription model was adopted. Same with Quicken, Intuit, Salesforce and Adobe. Adobe makes something like $2 billion in revenue from the Creative Cloud. Microsoft made $227 million in Office subscriptions in FY 2017.

I was in a small, local plumbing supply company yesterday in Santa Monica, CA and saw an office computer running Windows XP, because their ancient inventory control program would not run on newer computers. When the hardware eventually dies, they will be forced into an expensive conversion process to a new software system, and their business' bottom line will be negatively impacted. If they had upgraded, paid a yearly subscription fee, and converted to a new application, their business would have been future profed.