Alston Grove

My dentist talks a lot, but he’s very interesting to listen to. I guess he learns to do all the talking because his patients always have their mouths stuck open. I just had my check-up, and he was talking about the software problems he has in his office. It was a real life example of how niche software is where the cash is for small business ….

He tells me the familiar story of starting his office with DOS-based software, then going through painful upgrades to stay current. He tells me the software he bought is from Eagle Soft. I think he said the software cost $5000 up front. For small business, that’s a good chunk of change.

The software is quite complex, so he buys a yearly support package. The catch is that Eagle Soft will only support the most recent version of their software, forcing my poor dentist to upgrade with each release. And the upgrades aren’t free. He says he’s upgrading every 6 months or so, and estimated spending $20,000 over the years.

So he’s switching to EasyDent, which is closer to realism at $1350. I just love the screenshots! It reads, “Designed by dentists for dentists” — no kidding! Were they color blind dentists? If you look at their pricing, they offer to convert Eagle Soft data for $1200. What a great sales idea! You sell software that converts your competitor’s data to import it into your software! Sure, I’ve seen stuff like Excel import Lotus spreadsheets. But a complete conversion from one software package to another? It’s like BEA offering software that you point at your Websphere Commerce Suite website and — wham-o! — it’s converted to Portal. Think of how easy that makes it for people to switch. I think that’s a nifty gimmick.

It’s fascinating how customized and complicated niche software is. You need intimate knowledge of that market to write decent software. Is that what makes it expensive? It’s not like it costs $5000 to burn a CD. Was the time it took to create the software and the level of knowledge needed to get the business of it right? You don’t find dentist software at CompUSA for $100. You might find general point-of-sale software or simple customer relationship managers.

I guess the niche markets are too small and specific for mass software at good prices. Complicated business knowledge and small numbers of dentists lead to a barrier for entry, lower demand, and higher prices.

Would I find it interesting to write dental software? Hm, designing the architecture and using cool technology would be fun. For me, learning the business always seems to be a side effect. Eventually, I’d be a dental expert, like it or not. But as new technologies came out, I could upgrade my product and release new versions. And to cover the cost of technology evolution, I’d only support the latest version and charge a premium for it.

This entry was posted on Friday, May 2nd, 2003 at 5:12 pm and is filed under Software. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.