[jaynate]

Had me hooked right up to this point: “When we get the check, we pay a commission to this representative. Assume the commission is $500.”

I’ve never seen a software company pay 50% commissions on a software sale. I know it’s and example but the percentages are wrong even for the perpetually licensed days. Should be closer to 8-15%.

Totally sales and marketing spend could indeed be higher in this model because autodesk moved to direct positioning with end buyers rather than distributors.

[jdswain]

Commissions were different back then. I worked part time selling computers around 1990 and a little earlier, margin on computers was moving down, but was as high as 50%, I recall it moving down to 30% and stabilising there for a while. I don't remember software margins, but it could have been about the same. I used to get 50% of the margin as commission.

[xoxxala]

When I sold Windows 2.1 at Egghead Software, my spiff was an extra 30% for the first month as a promo. I always assumed that was a loss leader by Microsoft to push extra copies on release.

[kragen]

Hey, and now Apple and Google have set it at 30% again!

[kragen]

I'm pretty sure this is a roughly accurate breakdown of AutoCAD's cost structure 34 years ago. How long have you been in the business, and what was the highest-sticker-price software you were selling?

[kragen]

I am amused to see no response to this comment in two days.

[WillAdams]

A further consideration here is that this wasn't just commission, but also a payment towards providing support to the customer.