We have lots of FogBugz customers who have high-priced Remedy, Rational, or
Mercury products sitting on the shelves after investments of well over
$100,000, because that software isn't good enough to actually use. Then they
buy a couple of thousand dollars worth of FogBugz and that's the product they
really use. The Rational salesperson is laughing at me, because I have $2000 in
the bank and he has $100,000. But I have far more customers than he does, and
they're all using my product, and evangelizing it, and spreading it, while
Rational customers either (a) don't use it or (b) use it and can't stand it.
But he's still laughing at me from his 40 foot yacht while I play with rubber
duckies in the bathtub. Like I said, all three methods work fine. But cheaper
prices is like buying advertising and as such is an investment in the future.
"Camels and Rubber Duckies" (on the Pricing of Software)