Suns in the Personal Computer market

[Alfred Hartmann]

David L. Markowitz' comments on this topic in SUN-SPOTS DIGEST, Monday, 15
May 1989, Volume 7 : Issue 293, are very accurate.  It is the plentious
availability of low-cost software running on low-priced commodity hardware
that makes the PC market the Number 1 computer industry segment today,
measured in numbers of users, numbers of dollars, numbers of systems,
aggregate MIPS, tonnage of available software, number of trade
publications, impact on business, education and humanity, or whatever
metric you prefer.  Workstation cost would have to drop to near zero to
make the total cost to the user of hardware + software equal between PC's
and workstations.  Whatever pundits are comparing only hardware costs are
leaving half the terms out of the marketing equation (and probably the
terms with the higher coefficients).

Workstation software is priced to whatever the corporation can bear, and
is totally ought of sight for personal budgets.  Airlines know all about
this type of pricing racket, and price their tickets high for the business
traveler, whom they identify as someone who books late and doesn't stay
over a weekend.  But the "personal traveler" who plans his or her vacation
in advance and stays awhile gets lo-ball MaxiSaver fares.  Otherwise they
would drive a car (personal transportation, comparable to personal
computer).  Either the workstation and third party workstation software
vendors have to figure out a similar pricing strategy, to weed out
corporate Daddy Warbucks from at home users, or they can kiss their
futures goodby.  They can't continue to have annual production runs equal
to one day's manufacturing output of personal computers and still expect
to be around in the next decade.

You would think the workstation software vendors make enough profit
advantage by selling node locked software, so that the software price
could be equal with PC software, which is typically passed around among a
few friends.  That ought to be worth a profit advantage of maybe 4X - 6X
versus the unauthorized copying that goes on with PC software.  But their
desire for margin advantage doesn't end there, and the workstation
software package price is jacked up another 4X - 10X in absolute dollars
(from tens or hundred of dollars for the PC version to thousands of
dollars for the workstation version of similar software).  So that makes
the compounded total price elevation for workstation software more like
16X - 60X over the effective PC software price.  And that doen't even
include the other PC software advantages, like wider variety of PC
software, easier acquisition (storeshelf shrinkwrap vs.  signed multipage
license agreement plus money order mailed off somewhere), easier
installation (no PC superuser/Sun worshiper), fourth party how-to-use
manuals in any bookstore,  stop by the computer store demos, demos on
television (PBS' weekly Computer Chronicles show), etc. etc.  etc.

PC's bring computer power to the people through low total cost of
ownership.  Workstations haven't made much of a dent in total cost of
ownership just by offering low priced hardware, any more than discount
needles would lower the cost of a drug habit.  

--Alfred Hartmann
  MCC - Austin, Texas
  alfred at mcc.com