What's a fair price for SPSS? (created 2010-08-06).

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There was a discussion on an email discussion group about SPSS about how the SPSS software package was too expensive and how they should consider offering a discount price for the home user. Everyone was in favor of lower prices, of course, and compared the pricing of SPSS to that of Stata and R. In the spirit of debate, I offered a contrarian viewpoint. It also applies to similar complaints I have heard about the pricing of SAS software.

I don't think that any of us on this list have an appreciation of the big picture. In the world of software where things change very rapidly, we have seen continual and regular success for SPSS (and SAS for that matter) over a span of more than four decades. The pricing structure for SPSS has been pretty consistent, and they make a ton of money.

The problem with a special low price version for people like you and me is that it would cannibalize all their current sales. You can argue, what about Stata? What about R? Those are different products, and they should have different prices. If IBM (the company that recently bought out SPSS) adopted the Stata pricing policy, how do you know that they wouldn't take a very successful product and drive it to ruin?

Oh sure, cut the price and sales go way up. But do any of us understand the market for statistical software well enough to predict whether the increase in volume will make up for the loss in revenues. I don't think so. The folks at SPSS (and at IBM even more so) are survivors who have continued to succeed in a mercurial market. Maybe they are making the wrong call here, but given their access to marketing data and their previous track record, I am extremely reluctant to second guess them.

Don't get me wrong. I'd be thrilled if SPSS lowered their prices. And I use R largely because of its price. You can't ignore price when picking a package (or for that matter, ignore the difference between a flat out purchase versus a yearly license fee). I just think that some of the arguments that SPSS should lower their prices are a bit naive. It's sort of like telling Jaguar that they should sell all their cars at the price of a Honda Civic.

I have not bought SPSS for my private consulting business, but I am very grateful that at my part-time job at UMKC, that they have made the commitment to pay for SPSS, and I recommend SPSS to a lot of people at UMKC. I'm thinking about writing a second book,
* http://www.pmean.com/10/SecondBook.html
and if I can convince a publisher to print it, I will use SPSS in all my examples.

Other than how it affect me directly, I don't know if the SPSS pricing model is good or bad. I don't think any of the rest of you do either.

The only comment I will say with certainty is that it is a mistake for any one of us to become too dependent on a single statistical package. If arguments about statistical packages amount to a religious fervor, count me in among the polytheists.