I won't lie, I've seen more than a few episodes of the 1990s television series Star Trek: Voyager. I started watching it out of boredom, but lately I've become fascinated by a unique characteristic amongst all the Star Trek shows:
The character who captains the ship is evil.
If you've never seen the show, it is advertised as the story of the journey of a single ship, helmed by a plucky and yet vulnerable "Captain Janeway", struggling against all odds to get her crew home safely. But nothing could be further from the truth.
The more I watch this show, the more convinced I am that the writers intend to illustrate that StarFleet captains are psychopathic, remorseless scourges upon the galaxy. The Janeway character is written as a flawed, sociopathic woman whose military dogma and clumsy aping of real human emotions destroy the lives of everyone who crosses her path.
(Warning: spoilers ahead)
Here, for example, are the plots of some actual Voyager episodes. (And I want to just emphasize that I am not making these up, these are the real storylines):
We went to the big island for our Annual Trip / Spring Break / Funemployment Celebration / Birthday / Sanity Restoration Vacation. I took some pictures, but mostly we had rum drinks.
It occurs to me that this is an obvious follow-up to my previous article about how to buy a used car. If you buy a car without trading in your old one, then you'll need to sell your old one off. But never fear, it's not that hard!
Why not trade inI have now sold 3 cars and bought 5 through the used market, and I've been more and more happy with avoiding the experience of trading in my car. Specifically:
Why trade inStill, there are some disadvantages to self-selling:
So if you've got time and you'd like to save a few grand, here's an overview of the process.
1. Estimate the sale priceIt's a good idea to do this early on, because understanding the financial magnitude of the transaction may affect your thinking. For example, it might change your mind about whether it's worth selling at all, or it might change your mind about how much you can afford to spend on the replacement car. Here are 3 tools for estimating how much you'll get from your sale:
2. Prepare the car for saleThe better shape your car is in, the easier it will be to sell. On the other hand, it's not cost-effective to spend unlimited money on speculatively shining up the car. The goal is to bring the car up to "good-to-excellent" condition for as little money as possible. Here are some suggestions:
If you have to leave the car on the street or continue driving it while it's for sale, you might try to arrange to have it detailed immediately before a buyer sees it. This is more of a hassle but it will save you some money if the car gets detailed and then immediately splashed with mud or whatever.
3. Photograph the carLots of clear, well-made, high quality photographs of the car will make a big difference to online shoppers. A typical clueless craigslist poster will put up 3 grainy cell phone photos that make the car look like it's "probably black". Don't be that guy.
You'll notice, in contrast, that the dealers always get the car clean and then take like 50 pictures of it. This is what you want to do. Here's a checklist of photos that I always take:
Upload the pictures to somewhere globally accessible. I host large versions of the images on my own web server, but you can use Flickr or Blogger or one of many other image bucket services. (Don't use Facebook or any service that requires buyers to sign in to see the pictures. You can test by making sure the pictures appear when you use Chrome's "Incognito Window" to view them. If it works, then no authentication is required.)
Here is the last set of pictures I did for a car ad (click to enlarge):
4. Write the adI write a fancy web page because I am compulsive, but you can just write a Google doc and then paste it into Craigslist. Depending on the kind of car, you might write a few nice sentences about the car's best features ("very reliable!" or "great for Tahoe!" or "fun to drive!" or "great for kids!") The best way to market the car mostly depends on the car and the likely buyers.
Regardless, there are some facts that every car advertisement should include:
Personally, I want the buyer to know everything that I would want to know about the car if I were buying it. To that end, I mention every issue I know about in the advertisement. If there are scratches, dents, upholstery rips, or other damage, I include photographs of them in the ad. I also mention any mechanical issues I know about.
You don't have to be as complete, and much depends on your conscience. But consider this: a misleading advertisement is likely a waste of time and cause a poor transaction for you. Buyers will be excited about the car based on the ad and will take up your time scheduling meetings to see it. But if upon seeing it they are disappointed, they'll walk away or offer you a much lower price because of the surprising things they find about the car in person. In my view it's more efficient to attract only motivated, well-qualified buyers to the "meet-and-drive" stage of the sale. But it's up to you.
Here's the last advertisement I used to sell my STI. I got the price I asked for, by the way: http://www.zerotrickpony.com/rus/sti-for-sale/
5. Post your adOnce you're ready to start meeting buyers, it's time to post your ad! I would start with craigslist because it's free, but if you're concerned about more exposure or if it's not getting much interest, you might try purchasing an ad on AutoTrader. I've never posted there but I do look for cars there, so I know that it's a place where a lot of people look. If you use craigslist then you'll receive responses via anonymized email. (Although I believe there's no way to respond to the sender without revealing your email address.)
6. Arrange a meetingThis is the bad part. Craigslist has real buyers, but it also has idiots, flakes, and thieves. You should read the Craigslist warning about scams and protect yourself. Here are three things to watch out for (these are not common):
I like to do this over email as much as possible so that I can process a lot of inquiries at once. I end most emails with "Let me know if you'd like to schedule a time to come look at the car in Santa Clara. I am free X, Y, and Z mornings / evenings this week." I always suggest the next action so that they can get the ball rolling. Be sure to schedule during banking hours.
I don't give my home address until after they've confirmed a specific time. Leading up to the meeting time, I confirm with them (usually the night before) to remind them of the meeting. Often they've forgotten about it and now can't come, so it's good to save yourself this headache.
Prior to meeting, I usually ask something like "which bank will you be drawing the cashier's check from?" This allows you to check the hours and location of the nearest such physical bank (see below), and also to confirm that they're not going to use First Scam Bank of The West. It also reminds them that you expect them to come prepared to buy the car.
If you have an unusually desirable car, especially a sports car, you might say something like "I've had a lot of problems with joy rides, so please don't come until you're ready to buy the car." For a normal car you won't have to say this.
This will likely be frustrating, but once you actually get someone to show up, they will probably buy the car. My cars have always been bought by the first person to come see them. So take heart.
7. Show the carWhen you finally get someone to actually show up, it should only take another hour or two to sell the car to them. Let them look over the car. I try to chitty-chat with them as they do this; they're more likely to trust you and buy the car if you get them to like you. This is a good time to check one last time that you've gotten all your possessions out the glove box, compartments, cup holders, under the seats, etc. And ejected CDs from the stereo, if you're selling a car so old that it had CDs.
8. Test driveID required:
Before they drive the car, photograph their driver's license with your cell phone camera, and confirm that it's not expired. (As the owner of the car you can be ticketed for allowing an unlicensed driver to drive it, so be sure they are licensed.) You're also going to want to know exactly who this person is in case there is an accident and a police report. This is very unlikely but it's good to be careful.
If your car is a stick shift, confirm that they are experienced driving a manual transmission. If during the drive they seem to have lied, simply tell them to pull over to the side of the road. When they do, take the keys out of the ignition and then switch places with them. The test drive is over, drive home. Tell them they're welcome to drive the car more after they buy it.
During the test drive, try not to freak out. Remember: they'll probably buy the car, so it's about to not be your problem regardless of how they abuse your motor, clutch, and brakes. If they really damage the car then you'll have legal recourse. (This is very unlikely.)
That said, there's no need to allow a long test drive. They should at most need 10-15 minutes, go around surface streets, and one exit on the freeway. If they propose to go further, politely recommend a shorter route.
Close the deal:
Once back in one piece, I usually say something like "So what do you think? Want the car?" If they brought a car guy, you can let them confer by themselves. (Let them look at the car, but take the keys with you.) He / they should make you an offer or walk away within a few minutes.
9. Agree on a price, shake handsNow you are that used car salesman! At this point they should make you an offer on the car, and you can decide to accept it. If they are savvy, they will make various arguments as to why they should pay a lower price. You can rebut or accept these arguments as you like.
Time, the most precious asset
As with many kinds of negotiations, the person least in a hurry often does the best. If you are in a hurry to sell because you need the money or because you are frustrated by the process, then you're likely to capitulate to a lower price. For example, the buyer might say something like "well I'll take it today for $1000 off the price, but otherwise I'll need to think on it." You may find this tempting if you're in a hurry.
On the other hand, if your car is desirable and you have a lot of interest, then you don't really need to accept a low offer, because there will be others. For example, you might say "I don't really see why I would reduce the price, I've got someone else coming to look at the car tonight." That puts the time pressure on the buyer, and it may cause them to accept a higher price.
If you both agree on the price, shake hands! You just need to get the money and then you're done.
10. Get paidIn-person car purchase scams are rarer than shipping scams, since you have the person's identity, driver's license, eye witnesses, etc. Even so, you should protect yourself in case this person attempts to deceive you. It's not that hard, fortunately.
If you're accepting cash, then you simply need to count it and then you can be satisfied. Touch every bill and, to the best of your ability, confirm that it is real. I would recommend that you drive the cash to your bank and deposit it in the presence of the buyer, before you let him leave with the car. If the sale price is more than a few thousand, you might consider refusing cash and taking only a cashier's check.
If they haven't already made the check, you can simply go to their bank with them and watch them have the check made. Offer to write your own name on the withdrawal slip so there are no typos. Confirm the amount.
If they're bringing you a check that's already made, you need to verify it before you accept it. There are several scams involving fake cashier's checks, so it's a safe form of payment only if the check is real AND the bank is real. Here's how to confirm payment:
11. Sign over the titleJust like buying a car, but the other way around:
The "selling price" box
When I have sold cars I have been propositioned by the buyer to write a lower price on the DMV forms than the real price. The purpose of this is to mitigate the sales tax and I'm sure it's illegal. When I have gone to the DMV to register the car (see below) they have quizzed me aggressively about the price of the car, because they know that this evasion is common. I know people who have done it and they get away with it as far as I know, but it's not legal.
12. Release liabilityYou have to mail the white top part you ripped off of the old title to the DMV. Mailing instructions are on it. Mail it in as soon as possible. Also call your insurance company and drop the car from your insurance. Do this as soon as possible. If the new owner gets in an accident, you want a paper trail that the car is no longer your problem.
Enjoy your free parking spot and your pile of money!
Having just recently bought and sold used cars, I thought I might jot down some advice on the subject while it's fresh in my head. (And if you want me to help you buy a car, you can get an idea of what steps I follow.)
Why usedMost people worry that there might be something wrong with used cars and they'll get ripped off. That's a risk, but there are some major advantages to buying used:
Why not usedThere are some caveats to buying used which you should be aware of:
1. Select some carsHere I don't mean, specific physical cars. I mean, combinations of make / model / year / colors / options that you think you might be happy with owning, which are around 3 to 5 years old (ideally) and are in your price range (whatever that is). Think of some possibilities and put them in a spreadsheet. It's okay if you add cars that you're not initially sure about, because spreadsheet rows are cheap. If you've no idea how to get started, here are some ideas:
If you're budgeting somewhat precisely, remember to include sales tax because it can be a significant amount. It depends on where you live, but (for example) in Santa Clara County in California I pay 8.75% tax on cars, which means writing a check to the DMV for over $1500. Don't let this surprise you!
Remember insurance costs
Your insurance premium may change substantially when you buy a new car. Newer cars are more expensive to insure because they are more valuable. Sports cars are also more expensive to insure because insurance companies suck. It's a good idea to call your insurance company ahead of time to get an estimate, so that you can budget accordingly. If you replace a 20 year old Civic with a 2 year old BMW, your premium could easily triple.
2. Narrow the fieldYour spreadsheet should now grow some columns, which you'll need in order to compare the possibilities and decide what you want. Edmunds is a great resource for gathering information (especially numeric information) about used cars. You should choose criteria that matter to you, but here are some columns that I think everyone should have:
You might want other criteria like cargo space, power sliding doors, sunroof, or stereo features.
The Freudian Sort
Here's a pro tip: when I get indecisive I like to add weighting coefficients and numeric scores to each of the characteristics I care about such as "comfort", "fun", "beauty", etc. I score all of the cars and then use a weighted sum to compute an overall score for each car. I then sort the spreadsheet and see which car gets the highest score.
This process is not at all useful for actually comparing the cars. What it does reveal is which car's coefficients I keep fiddling with to get that car to come out on top; that is the car that I choose because I obviously want it badly enough to scam my own spreadsheet to get it to justify my purchase.
3. DriveYou should drive each car type you're considering, well in advance of being confronted with the reality of actually buying one. This is best done by going to a dealership and doing a test drive. You can find dealerships that have that car in stock by searching for it on Autotrader or Craigslist. You can then confirm using the dealer's website; almost all of them have their inventory online.
When you meet the car, you should look at it inside and out, and then drive it. Here is a sample checklist for your visit:
Note: Unfortunately visiting the car will force you to interact with sales people, but you can simply tune them out. Car salesmen are expressly instructed to jabber constantly to keep you from thinking your own thoughts about the car, so you really should ignore them. If it fills you with guilt to take up their time without buying the car, remember: they are evil and they actually lobbied congress to force you to deal with them. They asked for this.
After the first drive or two the reality of your criteria will sink in for you, and it may affect your spreadsheet dramatically. For example, you might realize that you don't actually care about having a manual transmission. Or you might decide that only 350 horsepower is just not enough. Revisit your list of prospects after each drive and reconsider.
4. ShopOnce you've visited every car and loved it or eliminated it, it's time to shop for the particular specimen that you'll end up buying. I prefer Craigslist for this, but Autotrader is another good way to find cars. Use Autotrader's keyword search rather than criteria search based on things like transmission type or body style, because many Autotrader ads don't have the metadata filled in correctly. The year and make filters work fine, though.
I make a spreadsheet of all the specimens I can find online. Here are some things you can look for to screen out cars that you probably don't need to waste your time with:
5. Schedule a purchaseOnce you have some finalists, make plans with each owner to meet and see the car. You have some prep work to do, because you should expect to pay for the car and receive it right then. It's generally rude / unnecessary to see the same car multiple times, so you should be prepared to buy. Here's what you need to do to get ready:
6. Evaluate the carWhen you arrive, you'll first look over the car, and then drive it. Your evaluation has two purposes:
7. Agree on a price, shake handsIf you're negotiating with a normal human, this part is not that bad. I'm not going to give you a lot of really shrewd haggling advice because I personally suck at this. But in theory, the Kelly Blue Book price is (absent any other data) considered a "fair" price. If you are sociopathic and love to argue, feel free to try to abuse the seller to save money, but I don't personally do this. I've met sellers who compromise a little, sellers who compromise a lot, and sellers who don't budge a single penny.
When you do propose a lower price, you typically do so by arguing that the car is not in as good a condition as Kelly's "good" condition criteria, or that the car's condition was not as advertised. Some common strategies I use:
About dealersSometimes a dealer has the car you want. This is very sad, but is occasionally unavoidable. (I have come to suspect, by the way, that dealers are buying up used inventory to eliminate the private party trade. So in the future this will probably only become more common.) Buying a car from a dealer is largely the same up to this point, but I have a few additional tips for you:
The only price you actually have to pay is the cost of the car, sales tax, and a tiny (usually $20ish dollars) DMV fee. There are no other costs, and yet the dealer will present you with hundreds of dollars in "fees" when you get to the money man. To eliminate this annoying fleecing, I recommend you negotiate on the total price after all fees and tax. You should say the words "out-the-door" to make the salesman realize that you understand that random scam fees will be included and that you want to negotiate them all ahead of time. To understand the out-the-door price, simply think of the real price you want to pay, add sales tax, and that's it. The dealer is welcome to charge you any other fees they like, but they have to lower the price of the car by that amount. This will also simplify your process of checking the paperwork at the end.
"Sitting on the lot" time
Pricing for used cars at dealers is all over the map. A Honda Civic in a large city may be priced surprisingly competitively. Or, a rare and desirable sports car may be priced surprisingly high, and you'll find that all the dealers will maintain the same conspiracy and you'll just have to pay if you want that car.
But regardless, all dealers will imply that the car you're shopping for is a hot item, on the brink of being sold, and you should rush to pay a high price TODAY TODAY NOW NOW. Your weapon against this tactic is the CarFax. You'll be able to see when the car was last in the hands of an actual human owner. When you see that it's been weeks (or sometimes months... MANY months), you can point out that the car is overpriced since it has been sitting on the lot for so long and/or has bounced through several auctions without anyone wanting it. I've had this tactic be effective one out of the two times I tried it.
The money man
Unfortunately it's standard procedure for the car dealership to attempt to trick you into paying more money after you feel that you've arrived at an agreement. If you negotiated on the "out-the-door" price then this will be somewhat mitigated, but you should read all of the paperwork and remain defensive until the deal is completely done. Here are some tactics you may face:
8. Pay for the carThis is the one good thing about shopping at a dealer; they'll take many methods of payment, including personal checks, credit cards, and they'll even do financing. But if you're buying from a private party, you'll need solid proof of payment to satisfy a savvy seller. Ask to see the title document (it's brown) before you go through with this, since it's annoying to void payment.
Before you spend effort on paying this person, photograph their valid driver's license with your cell phone camera. If they object, or they are not who they appear, or if their name doesn't match the name on the title, walk away. It's illegal for an unlicensed person to anonymously middle-man a car purchase, so protect yourself.
When I pay cash, I drive the seller in the new car to my bank, Wells Fargo. We go inside and he watches me have a cashier's check made. I have him write his own name on the withdrawl slip to put on the check. (It's important not to have typos). If you are presenting a check that the seller didn't see you make, you can suggest he call the bank and have them verify the amount and payee over the phone. (He should look up the bank's phone number online and NOT read it off the check, since that's a common scam.)
Once I have the check, I give the check to the seller and take the keys and the title document. The seller fills out the title information and signs it over to me. See below. Like the fox, the chicken, and the sack of grain crossing the river, Don't leave the seller with both the keys or the title and the check. I think you could recover your money in court, but that would take up a lot of time.
Third party loan
Paying with a third party car loan is much the same; you should have a blank check from the bank that you can simply fill out and hand to the seller. He should be able to call the bank to verify funds.
9. Sign over the title
The "selling price" box
When I have sold cars I have been propositioned by the buyer to write a lower price on the DMV forms than the real price. The purpose of this is to mitigate the sales tax and I'm sure it's illegal. When I have gone to the DMV to register the car (see below) they have quizzed me aggressively about the price of the car, because they know that this evasion is common. I know people who have done it and they get away with it as far as I know, but it's not legal. (Interestingly, the "purchase price" box on the back of the title appears below the "penalty of perjury r.e. the foregoing" signature line, which suggests that it might not be perjury to lie on this part of the form. But I am not a lawyer.)
10. Getting homeThis is a small thing, but you do now need to somehow take two cars home: the one you arrived in and the one you just bought. If you came to the purchase with a "car guy" or other wingman (which I recommend), he can simply drive the car home for you. When I'm by myself I just park my own car in a nearby neighborhood and drive the new car away. I ask a friend to help me retrieve my old car later. It's not a great idea to leave the new car unattended right after you've purchased it; a lot of weird things could happen if the seller is malicious and has an extra key.
11. InsuranceMost car insurance policies automatically cover a new car that you've just bought implicitly for a few days, so you're not uninsured. (Although if this is your first car and you have no insurance policy yet then you are uninsured, which is illegal. I've never encountered this situation before, but I imagine you ought to buy car insurance with your cell phone before driving away.)
But in most cases, you can just call your insurance company in the next few days and add the car to your policy. You'll need to know the VIN number, license plate, and probably also the make/model/year. Bear in mind that your premium may increase a lot, see above.
12. RegistrationThe brown piece of paper you just got is not actually your title to the car; it has now become your application for title as the new owner, which you now have to turn into a real registration at the DMV. Make an appointment and then take the paper to the DMV.
You'll have to pay the sales tax at this point, which might be a large sum. They'll take a personal check, because they know where you live.
Pro tip: go to AAA instead
If you have a AAA membership, they can do these DMV services for you at a AAA office. They're much faster and much nicer.
That's it! Phew. Enjoy your new car.
Today I sold my Subaru to some kids from Sacramento. They were very nice but I assume the car is as good as destroyed in their street-racing hands. So, rest in peace, beloved machine. You were bloody fast and you never let me down. sniffle.
PS: Lest you have any real sympathy for me, know that I sold the car for a ridiculously high price. I then used the money to buy a newer Subaru which is almost as fast and much more practical. So it's fine.
I spend New Year's Day in Death Valley, and took some pictures:
I've been realizing recently that there's still no really good substitute for drawing a diagram with a pen and paper. Pixel programs like Photoshop seem to force me to fuss over a degree of precision that I am not ready for, and drawing programs like Illustrator and Google Diagrams have indirect and clunky controls. And touch screens will always suffer from the fatal "I cannot see what I am doing around my fat fingers" problem. Short of lugging a Wacom tablet around everywhere, I feel like technology has failed me.
Take, for example, this highly technical illustration of my idea to save mankind from extinction, producing limitless and perpetual energy for all. I was able to sketch this out in about 5 minutes, and then take a picture of it with my cell phone camera. Admittedly I made some mistakes in pen and I also perhaps didn't do the best job of conveying what a clothes dryer looks like, but hey, that is what labels are for.
As you can see, by harnessing this abundant source of created matter, we can power our civilization indefinitely. I'll be publishing next year, but I wanted to thank you all for your support on my path to fame.
Don't you think it's pretty weird what people "like" on Facebook? How would it make you feel if the system told you that 8 people "like" your divorce?
One of the many things I do with my free time instead of posting to this blog is playing dumb video games late at night. I've just come to the end of a compulsive, sugar-fueled binge of RPG games including Mass Effect 2, Fallout 3, Skyrim, and now finally Mass Effect 3. (An unspeakable number of hours and also brain cells died in this campaign.)
Mass Effect 3 is a vast space opera in which you kill bad guys, romance your crew, and save the galaxy by answering a series of multiple-choice questions. You may have also heard that it has many different endings depending on your actions. I got the crappy ending. (It's okay, though, I watched the other endings on YouTube. Good enough for me!)
A lot of people were upset about the final scene, but personally I feel more jilted by the lack of XBox 360 Achievements that properly recognized my in-game efforts. Here are a few achievements that I deserve, and would have received if they existed in the game:
While chuckling over Twitter with some friends about how all enterprise software is terrible, one of them replied:
"Which is weird, right? It's like if architects could only build cottages and skyscrapers always fell down."
It does seem like a strange contradiction. How could software be so unlike the construction industry? I found quite a number of articles about how awful enterprise software is, and I agree with all of them. But I don't think this is a coincidence of the vendors who make this software, or the industry, or the sectors. Instead, I claim that
expensive software is intrinsically likely to be of poor quality.Let me walk through my claim by starting with some background:
How software is madeI've often thought making software is like building a house. (Because what do I know about houses.) Programmers use editors, construction workers use hammers. But a professor of mine once pointed out that it's really the wrong analogy. Programmers are designing software, much like an architect draws a blueprint. They're not making anything when they do this; you can't use software by itself, just like you can't move your furniture into a blueprint. It's a computer that turns the code into actions, just like a builder turns a blueprint into a house. So in a sense, programmers and architects are planning, but they're not making.
This dis-analogy is important because of cost. Most of the cost of a building is in, well, building it: hundreds of thousands of dollars even for a single building. But a computer can execute even very complex software for (usually) pennies. So while an architect and a programmer may get paid the same, one of them is 5% of the cost of the overall project, and the other is 95%.
The fact that software is mostly R&D cost and almost no manufacturing cost makes it very different from most of the products that other engineering traditions produce, like cars and furniture and skyscrapers. This matters because the cost to make just about anything (usually) sets a lower bound on its price. If it cost a lot to "manufacture" software, then a lot of the sale price would be set by the need to recover manufacturing costs for each item sold. But there's almost no per-unit cost for software, so the supply portion of the price is set almost entirely by its R&D costs. The more customers, the lower the per-unit cost needed to cover the fixed R&D costs.
Expensive softwareI'll clarify that by "expensive" I mean "how much does the customer pay to get the software". If you buy QuickTime Pro from Apple, you pay $35. If you buy Photoshop, you pay $2000. If you buy an SAP installation, you pay ten million dollars. That's expensive. You could argue that SAP is not so expensive per user, because one $10M SAP installation serves hundreds of thousands of employees in an enterprise. I am expressly not accepting that definition of cost, and I'll explain why in a second.
Enterprise software is some of the most expensive software on Earth by this definition. There are lots of reasons for this, at least one of which is that enterprises (big companies) have a lot of money, and so it makes sense to charge them more because they have more to give. (This is what I like to call the "how much ya got" pricing model.)
But another force at work is simply recovering those development costs: a software package for huge companies costs a lot to make, and yet can only be sold to the few thousand companies on Earth big enough to need it. They each have to pay more in order to cover the development cost.
In contrast, cheap software is often cheap only because it has a lot of customers paying a bit each for it. That is: the R&D costs are not necessarily lower, it's just that the denominator of the cost over the large user base makes it seem cheap.
Software qualityHere are 3 quality data points:
What the market will bearThe software industry, like most others, mostly makes products that are absolutely as low quality as anyone will buy, and rarely higher. Speaking as an engineer I can assure you that the software you buy is of exceptionally poor quality compared to what is possible, and also compared to the engineering done in other commercial sectors. (My favorite restatement of this observation is this probably apocryphal quote from GM about what it would be like to own a car built like Microsoft Windows.)
It's not because software companies have poor QA practices, software developers lack training, and the discipline lacks rigor. These are all real problems, but they're symptoms of the root cause, which is simply that customers buy crappy software anyway. (A reductive explanation for why: new software is still being pioneered at such a high rate that most software companies feel that it is vastly more profitable to make new software than to improve old software. So whenever they can choose to improve quality vs. expanding the product to serve a new need or market, they usually choose expansion.)
By the way, I imagine that there is a distant future in which Moore's Law fails us, computing finishes saturating society, and the rate of discovering new ways for computers to help us dwindles. That will be a very well automated world, and in it the software developers of the day will finally turn, for the first time, to quality. But I wouldn't expect that to happen any time soon.
Complaint-driven qualityWhich is not to say that software companies don't care about quality at all, it's just that they care about it as little as possible. And when you're trying to invest minimally in quality assurance, supporting your customers only when they complain is a good strategy. (Reacting to a complaint costs money, but not reacting to a complaint that doesn't exist is free. So there's a nice upside compared to hiring a testing staff who you have to pay even if everything is going well.)
Of course, there is risk in this reactive strategy: if you get lots of complaints, you'll spend a fortune on reactive quality measures like customer support, bug fixing, hot patching, deploying consultants. If you do too much support then you'll be forced to either react so much that it wipes out the sale price of the software, or else you'll have angry customers and they'll all stop buying your product. When this happens, I'd say "the market did not bear the quality of the software".
Per-customer support costsSoftware companies can control the risk of being swamped with support calls by increasing the quality of their product--- if it works for you, then you won't need to complain about it. Here's an extreme example: Google search works pretty well, and you probably didn't learn to use it from a Google employee. Good thing, too, because when was the last time you called Google's 800 number to get help using search? Why, never, because there is no 800 number. Your zero dollars spent searching buys you very little personalized help from Google. This is not a coincidence.
But software companies don't have to (and therefore mostly won't) mitigate support costs beyond some profitable fraction of the per-customer purchase price of the software. Because see above: their goal is to care about quality as little as they can get away with--- as little as their customers ("the market") will let them. So how much support cost is justified by an Enterprise SAP installation with a ten million dollar price tag? Why, quite a lot! So much, in fact, that SAP and its affiliates can afford to send men in ties around the world in airplanes to make their customers happy with SAP.
If SAP is sending what are basically field engineers to each customer anyway, they know that it doesn't really have to work terribly well out-of-the-box. Polishing the base product would amount to little more than controlling support costs (an efficiency), which can only increase margins but can't increase top line. So instead, SAP will spend that effort on something with a much bigger upside: trying to increase the top line with new customers.
Happy customers, not happy usersNote that I said that these companies want to "make their customers happy". I did not say that they make their users happy, because they certainly don't. Their users are employees of the parent company, all busy writing scathing blog posts about how terrible the SAP software is. But they're not actually customers in the sense that they didn't write the check, and so SAP doesn't care as much if they're happy.
The "customer" is typically an executive, who, being rational, is perfectly willing to accept quite a lot of grumbling from his employees if the system basically works and is an improvement over what was there before, and justifies its costs. Compared to making millions of users happy, that's a low bar.
Few customers and high costs mean low qualityAnd here, finally, is my point: Enterprise software makes a small number of men ("customers") happy enough to write huge checks, without requiring the happiness of the much larger number of people who must use the software. The huge checks pad the enterprise vendor's support budget, which has a directly reductive effect on the vendor's quality efforts. Thus, the vendor's software will suck. I think that this low-quality effect is, because of the market incentives, intrinsic to anything sold at a high price to a small number of customers.
Just exactly like enterprise software always is.