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76
NATO SOFTWARE ENGINEERING CONFERENCE 1968
7. Special Topics
hardware manufacturers from providing software. The discussion lasted over three hours, ending after midnight, yet was well-attended throughout. At the end of the discussion the opinion of those present was tested. It was clear that a large majority were personally in favour of separate pricing of software.
7.3.2. ARGUMENTS IN FAVOUR OF SEPARATE PRICING
1. Software is of obvious importance and yet is treated as though it were of no financial value. If software had a value defined in terms of money, users could express their opinion of the worth of a system by deciding to accept or reject it at a given price.
2. Systems organisations, which buy hardware, and either buy or produce software in order to sell complete systems, would flourish.
3. We are presently in a transition stage — when it ends, by far the largest proportion of people influenced by or using computers will be application oriented. Application software will become independent, in a sound practical way, of the underlying hardware and operating systems, and will be separately priced. However, the knowledge built into application programs will have to be protected by some means such as patenting.
4. From the viewpoint of the hardware manufacturer software is currently a sales aid. Most manufacturers are really in the business of selling computer time, not computers, and hence have no primary interest in making its computers run faster than the minimum speed required to sell them.
5. What the user needs is better software — he does not care too much where it comes from. The increased competition ensuing from separate pricing would cause an increase in quality of software produced  by hardware manufacturers as well as increasing the number of sources of software available to the user.
6. Until software is separately priced it is difficult for the software talents of the smaller hardware manufacturers, the software houses and the universities to be effectively utilised. It is these sources and not IBM which have produced the majority of good systems and languages, such as BASIC, JOSS, SNOBOL, LISP, MTS.
7. Separate pricing would benefit hardware manufacturers, and particularly IBM, in controlling the production of software, and enabling cost/performance figures to be calculated, by making normal cost accounting practices immediately applicable.
8. Even if hardware prices decrease only slightly as a result of separate pricing, this is a small gain to the user and anyway is not the main point at issue, which is the improved quality and service that would result.
9. Manufacturers will have a considerable lead over other software producers in designing software for new machines prior to their announcement; but this is unimportant. Most computers have two or three different software systems associated with them during their lifetime, and not just the one that the manufacturer devised before announcing the hardware. Furthermore, the lead time is not always used — IBM had barely started to plan OS/360 at the time System 360 was announced.
7.3.3. ARGUMENTS AGAINST SEPARATE PRICING
1. There will not be enough decrease in hardware prices to have any noticeable financial effect.
2. Users are worried about the service they get from the total system. Separate pricing would widen the gap between hardware and software design.
3. Purchase of software from multiple vendors will create a tower of Babel. At the time of the IBM 704, even two competing assemblers caused much dissension.
4. Separate pricing would enable the software produced by manufacturers to find its true price in a free economy. It would very  likely be priced at a level such that the total system price would be significantly increased, despite the decrease in hardware prices.