"get ready for this – access to first-quality software developers at the very low cost of $12 an hour. "

followed further down by:

"Lots of rough edges: For all its simplicity and low cost, Applane is not Salesforce or LiquidPlanner or Basecamp. And you will feel it. Features are rugged. Google Ranking data and sales conversion tools were not first-rate. And do not expect that fun Web 2.0 feel of a BatchBook, or even a Capsule CRM Tool. Plus, overall, the code can be slow, particularly for larger databases. The company said it is upgrading to new server technology to address that issue."

These two seem in conflict.

Even without that second statement, $12 is well below market rate in India, where the IT talent market is extremely competitive. There are some great people there, but expect to pay somewhere in the range of $40-50 for "first-quality" software developers, which is still well below US rates for comparable talent but not the cost advantage it might at first seem.

Well, after having read the article... it appears that you pay $12/user/month (after the first 2) from your business for the software, plus $12/hour for development.

So, you actually are paying more for the add-ons to their software, plus you're locked in to their system.

Yeah. What exactly is a "first-quality software developer" and who is qualified to assign that label to one?

Consider the typical "corporate IT" environment where your boss is not qualified to evaluate your ability as a programmer. Unfortunately for you he stumbles across an article like this in a reputable business newspaper and thinks to himself, "Why am I paying $120k/year for programmers when I can pay first-quality programmers in India only $12/hour?!" Next thing you know, you're out the door. In time he re-learns the lesson that you get what you pay for, but too late for you.

Corporate IT in the US is fast becoming a wasteland of foreign graduates desperate for green cards, outsourced consultants and offshoring. IMO the only options as a programmer in the developed world are to go very high end, do a startup where you sell directly to the end user who doesn't care what kind of programmer you are, or get out of the programming field altogether.

Hopefully there's some bosses's bosses out there that say "why am I paying someone $150 k who is not qualified to evaluate programmers?"

It's an interesting approach, because presumably Applane continues to own any customization work they do and can feed back changes into their core product. Essentially subsidizing the company's cost of development.

Plus given the customers are paying for the new features, they know it's features that their customers actually need (as opposed to want).

Good luck to anyone who tries that. My experience suggests you're going to need it

You get what you pay for, this much is true.