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Mike Cannon-Brookes has written about the high price == stable company fallacy, answering the calls to make his products more expensive.

There are a lot of good points there.

I have always been amazed at the psychology of clients. For example, take the J2EE application server space.

We pretty quickly got to the point where choices were:

• "Free": JBoss / open source [note: open source certainly isn't free as in beer...]
• Expensive / High end: BEA / IBM / Oracle / ...
• Medium: Resin, Lutris, JRun, and the like

I saw a lot of clients dismissing the medium camp as they saw things as black and white:

"We are doing large enterprise stuff, so surely we need BEA/IBM"

"We can 'get away' with the free JBoss/Tomcat"

So, I always felt bad for the middle tier which had compelling products for a lower cost, but had to always justify this, and also SELL MORE.