Can MATLAB be made cheaper?

I use MATLAB intensively for econometric research but also teaching. There is an increasing pressure or recommendation from both the industry and the university to switch to open source languages such as R, Phyton, etc. I very much dislike all these open source programs and I am nowhere convinced that they are superior. I will not count my many reasons here. But I do not like the pressure or the recommendation I am feeling. I think MATLAB developers should learn something from this. Before it is too late, I propose to make MATLAB much cheaper so that people can have wider and borader access to it and do not turn to open source for cost reasons. I am afraid that because of the cost reason MATLAB is losing a lot of ground. If MATLAB wants to preseve ground, the price should go down somehow or some version of MATLAB that is free should be developed. I know about GNU Octave but that is not helping MATAB to preserve ground. If MATLAB wants to survive, I think cost is being an issue.

[Rik]

I was about to suggest GNU Octave. Why is that not helping?

Also, I was under the impression that universities get a steep discount (and students do too). That generally means it is a relatively minor investment for most universities.

Answer 1

[Walter Roberson]

Unfortunately, the situation is messier than just price.

It is a bit easier for teachers to assign no-cost no-activation programming languages, and not have to deal with students talking about problems getting licenses or problems with affording licenses or students having older licenses or students not having purchased the right extensions (toolboxes). And, to be honest, the network license control software that Mathworks uses (Flexera) can be a PITA (it is the same software used by many major vendors, but that doesn't mean it isn't a PITA sometimes.)

However, reducing the cost of MATLAB does not solve those issues -- only going free and without license control would solve those issues.

Every few months, someone or other presenting as a student flames Mathworks for charging anything for the license, claiming that Mathworks is deliberately ripping students off and taking advantage of "captive audiences". The people posting the rants do not just ask for Mathworks to provide an even-less expensive software version for students, such as naming a price that they thought might be more affordable: the people posting the rants usually express wishes that Mathworks goes out of business. That makes it difficult for me to take them seriously as really talking about affordability to students: I inevitably end up with the impression that they are really saying that Mathworks is "stealing" by asking anyone to pay for Mathworks software. No mere reduction in price would ever satisfy those people.

Then there are the Open Source advocates who believe that closed source software is inherently unacceptable no matter whether the software is free nor not. I have observed a group of people who believed so strongly in Open Source that they preferred to spend 10 person-years writing a package from scratch to avoid using any closed source in the project -- they refused to even refer to the prototype that was written in a closed source package. No reduction in price would be acceptable to such people, not even to free: if it wasn't Open Source then it was not to be used. Questions of productivity or total cost of the project were, as far as I could observe, never considered by the group: the most important factor was that it was all to be Open Source.

Is price an issue? Yes, to be sure. Price is often an issue, even in well-intentioned organizations (as opposed to organizations that continue primarily by exploiting everyone, including vendors and employees.) But until you get below the $5 "petty cash" price for your software, you are always in competition with no-cost software -- and if you cut your prices to keep total numbers of customers up, then it is not obvious that you can afford to continue quality development work that attracts new customers.

In any product, there is typically an economic sweet-spot that maximizes profits: charge significally too much and customer retention falls rapidly leading to a net decrease in profits (even at the higher price); charge too little and although customer numbers may go way up, the cost of product delivery and customer service eats into the costs a lot.

If, for example, Mathworks were to double the prices, then they would lose customers. If they lost 50% of customers, they would still be ahead, because there would be lower service costs for the reduced number of customers. Likewise, if they were to reduce the price by 50% and were to double the number of customers along with it, profits would go down because service costs would increase.

It is a marketing art to figure out what the best price is for a product, low enough to attract customers away from higher-priced alternatives, or customers who would otherwise not have purchased anything at all, but at the same time not increasing the service costs (customer service representatives, internet bandwidth, faster servers...)

Is Mathworks currently in the sweet spot? I really do not know. I do not talk to their marketing people, and I have no idea what the current profit levels are, and I have no access to forecasts about how much Open Source is eating into business. Perhaps Mathworks will decide to decrease prices, perhaps not... I really couldnt' say.

... I just need to emphasize that the major business decision at this point is not really whether to reduce prices, but rather whether to go Open Source. Going "Donationware" (free closed source) seldom supports more than 2 people total -- unless you go the Constant Embedded Advertisments route.

Answer 2

[Cris LaPierre]

To be clear, I am not speaking on behalf of MathWorks. These are my observations.

I don't know what price would be acceptable to you, but I wonder if you are aware of the various purchasing options. If you are having to purchase MATLAB on your own, meaning you do not get access through school or work, then there are at least 4 options (see here).

Looking at just MATLAB and current US pricing,

• The highest price point is for those who want to use MathWorks products for commercial undertakings (Standard license).
• The next price point is for educators and researchers at ~1/3 the price. (Education)
• The next option is for home users (hobbyist) at about 60% the price of the education license
• The final option is for students. At $49, that's cheaper than textbooks, and they can use it for more than 1 semester. There is also a $99 suite option that includes Simulink and 10 commonly used toolboxes.

Additionaly, for startups, there is a special MATLAB and Simulink for Startups licensing option.

All that being said, I know there is constant exploration inot how to remain accessible to the most users possible.

[Image Analyst]

I notice that 72% of MATLAB licenses (at least of those who visit Answers) are for academia:

https://www.mathworks.com/matlabcentral/discussions/highlights/732145-who-bought-or-supplied-you-your-current-copy-of-matlab?s_tid=mlc_higlights_poll

Is there an option for students to pay for tech support? Like say some rich student wanted to pay the same price as I do for tech support, like $1000 per year (which actually includes both tech support plus version upgrades). Is that possible? Should it be?

[Cris LaPierre]

Again, not an official MathWorks response, just my observations.

Everyone gets account and install support. Same for reporting bugs.

Beyond that, support is based on the type of license you have. So a student could puchase the standard license. However, I am not aware of another way to buy support time.