1-2 vs unlimited licenses (Unix for a 386)

[Darryl Richman]

In article <PCG.89Aug23164912 at thor.cs.aber.ac.uk> pcg at thor.cs.aber.ac.uk (Piercarlo Grandi) writes:
"My dim remembrance is that the AT&T royalty is (depending on
"volume) under $50 for 1-2 users and under $150 for unlimited
"(complete system, I think).
"
"Note that the entire AT&T royalty is under 10% of the 386/ix
"selling price, i.e.  just a fraction of the likely margin that
"ISC has on it.

Harldy a (small) fraction of our margin.  Perhaps you forget that the
list price has to cover everyone's cost, from reproduction of the
floppies, printing our manuals, packaging the subsets, to
distribution.  Usually, manufacturers see between 10 and 25% of the
list price from the distributors.

"If the royalty were more like 30%, as for the low cost Microport,
"Everex, Belltech products, then the difference between the two
"royalties would excusably be too large to ignore.

Also note that Microport is in Chapter 11, Belltech is now owned by
INTEL, and Everex sells hardware into a lot of other markets.  We are
now owned by Kodak.  I don't claim to know what the other owners want
out of their businesses, but Kodak wants us to make a profit.  (We want
to make a profit, since I see in the paper that Kodak is thinking of
laying off 10s of thousands of workers next year.  I'd rather not be
one of them.)

"Of course it is passing along the X Consortium's price-tiering
"that forces poor ISC to sell the X development system for $795
"(more than the price of the Unix development system); or maybe it
"is true as somebody once wrote that ISC has huge QA costs (in
"validating free sw that is running successfully off the shelf at
"a few hundred or thousand sites around the world, and that is
"regularly updated by the X Consortium).

Feel free to get the X software and run it yourself.  I guarantee
you we are saving you a *lot* of headaches for the cost of X from
us.  We also pushed hard to bring you X11.3 when everyone else
was sending out 11.2.  Just as we have pushed hard to bring you V.3.2
6 months ahead of the rest.

"The conclusion is that if companies want to charge what the
"market will bear, and/or charge high prices so as to dampen sales
"because their organization is already strained under the volume
"of those it makes now, they can, but please without blaming AT&T
"relatively very low royalties or QA that is terribly expensive, or...
"--
"Piercarlo "Peter" Grandi           | ARPA: pcg%cs.aber.ac.uk at nsfnet-relay.ac.uk
"Dept of CS, UCW Aberystwyth        | UUCP: ...!mcvax!ukc!aber-cs!pcg
"Penglais, Aberystwyth SY23 3BZ, UK | INET: pcg at cs.aber.ac.uk

That's a very smug conclusion to reach from your ivory tower.  The
AT&T royalties are in the same ballpark as our profits.  If it's so
easy, why don't you make a go of it, eh?  There are obviously lots of
profits to be made undercutting the rest.  I've just spent 6 months
making V.3.2 boot on a large number of "clones"--and I'm going to be
spending another 6 months making it talk to a lot of "compatible"
devices.  If you think we're out there trying to take you for a ride,
buy someone else's product.  But we definitely supply a lot of value
added, and it costs a lot to keep from messing it up.  Ask SCO--they're
the only ones that have been in this market longer than us.  And they
charge a bit more.  Perhaps they know something that the Johnny-come-latelys
don't.

		--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