It depends primarily on two factors. How complicated the program is and how much demand there is for the program. The more complicated the program is, the more man hours have to go into writing and trouble shooting it. This means that it is more expensive to publish. The greater the demand for the program is, the more copies of it you can sell. The more copies of it you can sell, the further you can spread out the cost of developing the program. So, let's look at some examples. Adobe Photoshop is a high-end graphics program. As such it is very complicated and, therefore, it is very expensive to produce. Photoshop is a much more sophisticated than your run-of-the-mill amateur photographer is going to want or need. So, the only people who are really going to want it are the graphics professionals. As such, Adobe is not going to sell that many copies of the program. So, the cost of development is going to have to be recouped from those copies that do sell. Thus Photoshop is a very expensive program. On the other hand, there is something like Blizzard Entertainment's Warcraft. This is a fairly sophisticated game. As such it too will be expensive to produce. However, being a game, it is going to have a much broader market than Photoshop does. Therefore, it will sell more copies than Photoshop and the cost of production will be more spread out. So, Blizzard doesn't have to charge as much for each copy in order to make a profit. My final example is a program called GraphicConverter. This is another graphics program, but it is no where near as sophisticated as Photoshop. Therefore it is not as expensive to develop. Additionally, being simpler, it will appeal to more consumers than Photoshop. Therefore, it too can sell for much less than Photoshop. So, what we have here is basically a balance between cost of production and demand. Cost of production drives the price up while the demand for the product drives the price down. (It should be noted that this assumes that the software company produces just enough copies of the software to cover the demand. If they don't produce enough copies that scarcity of copies will drive the price up. If the produce too many, then the over supply will drive the price down.)

The phenomenon that throws a wrench into this whole discussion is Freeware and GPL. While there is much in the arena of freeware that amounts to basic utilities that fill a niche that the big software corporations missed, there are some amazingly sophisticated programs out there available for free. Zone Alarm, a free firewall comes to mind, as does AVG, an anti-virus product. In both cases, they are free because there are more feature-rich versions of the same product targeted to corporations (who can afford it) which cost money. The free versions are subsidized by the sales of the not-free versions. Then there's GPL. http://en.wikipedia.org/wiki/Gpl Ever heard of Linux? Free! Open Office - free. Gimp? Almost as sophisticated as Photoshop, but free (and included in most Linux distributions). So I'm answering this question in the context of people who make software to make money versus people who make software for other reasons. Expensive software can be the result of a combination of market forces, resources needed to develop the software, how much support you will get for the product after you buy it and greed. Inexpensive software can be the result of the same factors, but to the opposite extreme. The there's the GPL offerings. Because in some peoples' minds - software should be free.

LETS PUT IT THIS WAY! the cheapo software is for the CHEAPO people and the expencive software is for the rich people! SIMPLE // PROBLEM SOLVED!!! =D

GREED

GRRRh!! THE FKN PEDO GOT THE TOP ANSWER! >=)

The backup services and the cost of Research and Development.