1-2 / multiuser licences

Darryl Richman darryl at ism780c.isc.com
Tue Aug 29 23:39:24 AEST 1989

In article <1638 at lamont.ldgo.columbia.edu> fritzz at lamont.ldgo.columbia.edu (fritz zaucker) writes:
"1) Why do all the INTERACTIVE people say that they don't know
"   the AT&T license fees. Who else then them
"   could get this information easier (I suppose there should
"   be somebody in their company how pays these).

I'm a tech type, not a marketeer.  I have no access to this kind of

"2) It makes no sense to me how the difference in AT&T fees
"   are compared to the INTERACTIVE margins. The fees
"   are fixed costs (as the ISC people say themselves) and
"   because of that the difference in price for the
"   1-2 and unlimited user version should be the difference
"   between the AT&T fees for these two versions. If
"   the other statements are correct this should be 100
"   (one hundred) dollars or the ISC people should tell
"   us what the real difference is (the price difference
"   is a lot more than 100 $).  

You haven't got a good grip on the way distribution and retail sales
work.  Each in line boosts their cost of product by a percentage,
often 100% or more.  They don't much care why their cost is at a
certain point.  So, by the time you buy anything, it costs 4 times
(or more) what the manufacturer got for it originally.  Three fourths
of your cost was profit and overhead of the distributor and retailer.
And that original $50-150 (or whatever) for licensing is now $200-600
of the cost.  Which is why it is critical to have a 1-2 user system
as well as an unlimited.  I know that as a consumer I don't much appreciate
this, since I hardly find retailers to be value added (and in some cases,
like autos, they are often value subtracted), but you're gonna have
to reform a the whole marketplace before you get around to us.

One way to avoid the retail level is to direct market.  But this is
a difficult way to go for what is supposed to be a mass market
product.  Usually developer companies choose this route on low
volume items that they don't have to store.

"3) I believe that the work ISC is doing in implementing
"   UNIX for the 386 should be payed reasonable. But
"   nevertheless this pricing policy should be explained suffiently. 

I can only offer you my own naivette' here, but this is my understanding
of why prices get set the way they do.  I'm not in marketing or sales,
and (as my .signature claims below) these are only my opinions.  I
know that a couple grand is a whole lot of money for a personal
system, and even for a small company.  But everyone seems to be
desparately clinging to the idea that Unix is going to be a business
OS.  (I'd like to see some proof of concept, myself.  IBM seems to
be having a difficult time convincing people that they want to pay
a few hundred dollars for multitasking.)

		--Darryl Richman
Copyright (c) 1989 Darryl Richman    The views expressed are the author's alone
darryl at ism780c.isc.com 		      INTERACTIVE Systems Corp.-A Kodak Company
 "For every problem, there is a solution that is simple, elegant, and wrong."
	-- H. L. Mencken

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