I am often asked by some customers on weather the idea of 'chopping off' bits of functionality off a product and launching this as a new 'lite' product is a way that can enter the market at a different level (usually at a lower price) and compete against products that are priced lower.
Subtractive Marketing like that seldom - if not never - works. There are hundreds of examples like that in the world of IT (and not just software) that demonstrate clearly that you should not try to follow such a tactics. Your audience is not stupid, they can see what you are trying to do and they can feel annoyed by the fact that you are trying to sell to them a 'handicapped' product at a lower price.
A fabulous set of selected gems on software, management and beyond by Joel Spolsky on Software (a.k.a. the programmer that can write).
I have been asked in numerous occasions by clients or would-be-clients what exactly is the software they should be building. And most of the time the question revilves around demand and profits. Most want a 'quick and dirty' solution for a shareware that will be done within 3 months and start producing profits from day 0.
Understndably profits and choosing the right field in software is a big issue but it carries a lot less weight than the actual quality of the software itself. If you forget about the type and focus on quality and the ways that you can offer this to your customers then whatever the starting demand of the software you are bound to succeed.
Sounds to easy? Wrong... Quality is not easy. This is a lot harder than it sounds and a lot harder to implement than it is to agree that you will follow such a tactics. There are things that you will have to re-invent in yourself and your company on the way. And there are many mental obstacles which are not easy to overcome.
A few months ago we talked about Google purchasing Urchin. The good news is that Google is now offering the online live statistics of Urchin for free. I am not sure how Google will be able to cope with the mass of data theyw ill be collecting through this and I am sure that we will soon here voices of concern concerning this collection of data having to do with the backend and economics of each website and business but at least for now we can benefit with a great statistical package at zero price.