Home Computer: Streetwise way to cut the cost of software: Mike Hardaker used to sell computers until he went straight. He explains how to get the best deal on essential programs for working with Windows

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The Independent Online
I USED to be a dealer in personal computers. Socially, this ranks somewhat higher than being a heroin dealer, but below those who deal black jack or nine-card brag for a living. Contrary to popular belief, dealers of IBM PC and PC-compatible computers do not make a lot of money from selling hardware - a fiercely price-competitive market sees to that. The profits come from software and it is the way in which this is commonly sold that has given PC dealers their often reptilian reputation.

You need software - computer programs to make a computer do anything useful. It is software which lets you turn an otherwise meaningless chunk of tin and silicon into something you can use for typing letters, calculating balance sheets or keeping lists of customers addresses.

When I was in the business, the better-known application programs - each task, like writing letters or reports, counts as a discrete application -carried recommended retail prices of something like pounds 500 each. Like most dealers, I did my level best to sell these things at list price the margins were highly attractive.

PCs are getting cheaper and cheaper. However, software is not keeping pace with the downward trend of hardware prices. There is extensive discounting resulting in so-called 'street prices' but a pounds 1,000 computer can easily turn into a pounds 2,000 system once you have added a few application programs. This hidden cost applies equally to first-time buyers and those who are upgrading, improving or adding to their existing systems. New users have always needed to kit out their computers from scratch, but people upgrading used to move software over from their old hardware and just run everything as before, only faster.

Things have changed because of the runaway success of Microsoft's Windows. This offers a host of features which appeal to PC users, from an elegant graphical user interface for easier operation of the system to multi-tasking, the ability to have your computer do several things at once: calculating quarterly sales figures while you write a letter, for example.

However, if you want to get the most from Windows you need to use software which has been specially written to take advantage of the program's features. Check the price-lists in any computer magazine or press advertisement and you will see that the leading Windows applications are typically listed at pounds 395 plus VAT. And there are still plenty of people who will, as I used to, attempt to sell them at that price.

However, there are a number of ways in which you can save a lot of money. First, there are software upgrade deals and the so-called 'competitive upgrades'.

These are targeted exclusively at those who already have applications software. If you want to shift from the Dos version of the Lotus 1-2-3 spreadsheet program - running only under the basic MS-Dos operating system -to a spreadsheet that will run under Windows, then Lotus Development, publisher of 1-2-3, one of the world's best-selling application programs, will offer you an attractive deal to 'upgrade' from your old Dos version of 1-2-3 to 1-2-3 for Windows.

Equally, Microsoft would rather you switched to its spreadsheet program, Excel. So it will offer you a 'competitive' upgrade - if you can prove that you have 1-2-3 for Dos, then you can upgrade from that to Excel at a substantially reduced price.

So if you already have a PC software package, you should be able to move to a Windows equivalent, either from the same supplier or a competitor for about pounds 150 including VAT. Second, the large dealer margins on much software mean that some suppliers are willing to sell products listed at pounds 395 plus VAT at a healthy discount - 40 per cent is not unusual and you may do better still.

The corner-shop PC dealer is unlikely to offer discounts like this, but the bigger mail-order companies have the turnover and the low overheads to offer such deals. You should, for example, be able to find Excel - list price pounds 395 - for about pounds 270 including VAT or even less.

Next, some software suppliers are selling programs in 'bundles', where several applications are sold as a package for a list price which is much less than the sum of all the individual prices of the programs in the package. The leading examples are Microsoft Office and Lotus SmartSuite, each of which includes three full-price products together with one or two smaller 'utility' programs, for a list price of pounds 595 plus VAT - typically available, at discount, for about pounds 470 including VAT.

If you actually want the three products on offer in each of the packages - a word processor, a spreadsheet and a presentation graphics package - then these bundles represent a good deal. There are even competitive upgrades available - if you have any word processor, spreadsheet or presentation graphics program - which can drop the street price below pounds 350 including VAT.

Finally, there are the low-cost packages, which offer fewer features than the big names and are targeted at the first-time user. The best-known of these is Microsoft's Works for Windows (see review), which combines basic word processing, spreadsheet, database and graphics programs in one package which can be found for a discount price of about pounds 110 including VAT.

The problem with these low-cost packages is that they leave out features which are found in the more expensive applications and unless your requirements exactly match those features which are included, you may find yourself unable to do something you want to. As a rule of thumb, 80 per cent of people use only 20 per cent of the features found in the high-end packages - but each user wants a subtly different 20 per cent. If you need features not found in the cut down version, you have no choice but to go for the big stuff.

The best deals can come with the so-called 'hardware bundles'. These include several hundred pounds-worth or more of application software for 'free', when you buy a new PC. As might be expected, some of these deals provide a way for suppliers to get rid of software which has not sold too well.

The word processing program WordStar for Windows and spreadsheet Quattro Pro for Windows, for example, are both adequate at what they do, but have lagged in performance tests.

However, several hardware manufacturers offer either Office or Smartsuite with their machines. There is little to choose between these two products, but Office scores through the inclusion of Excel - which is generally regarded as the best Windows spreadsheet.

So if you are offered either as part of a PC bundle, then consider it seriously - both will do an excellent job of getting you started in Windows computing.

JARGON BUSTER

Word Processor: An 'electronic typewriter' which can be used for creating documents of all kinds from letters to novels. Modern Windows word processors include many page-layout features that allow you to create documents that look like printed material, with several columns of text and elegant typography, and to include illustrations.

Spreadsheet: An 'electronic ledger' made up of a grid of rows and columns - creating individual cells - which can be used for financial analysis or creating forms. As well as numbers and text, you can include formulae in a cell to perform calculations - working out the VAT on every purchase and adding it together each quarter, for instance.

Database: An 'electronic card index' which stores information, sorts it, searches for individual 'cards'and selects items from them for building up into reports - the names of everyone on the parent-teacher mailing list with a child in the sixth-form, say.

Presentation Graphics: A program which allows you to make 'electronic slides' combining text, charts and freehand drawings to print on to paper or overhead projection foils or process into actual photographic slides.

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