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

Stuart Lynne sl at van-bc.UUCP
Sat Sep 2 19:29:17 AEST 1989


In article <828 at cirrusl.UUCP> dhesi at cirrusl.UUCP (Rahul Dhesi) writes:
>Let's assume that the company porting UNIX pays AT&T a royalty of $50
>for a 1-2 user license and $150 for an unlimited user license.
>
>If the 1-2 user system can be profitably sold for $x, then the
>unlimited user system can be profitably sold for $x+100.

Not necessarily. Part of what you are paying for is support and the amount
of support is proportional to the number of users on a system. It is much
more complicated to setup a Unix system to run well and be secure for say
four to eight users than it is for your own personal workstation. This will
generate more support calls for setup during that initial "free" support
period.

Also almost everyone I know realizes that every level of the distribution
chain adds on it's own percentage. Personally I dislike multi-level
distribution channels and *much* prefer to deal directly with the product
manufacturer. In this day of instant communications this is becoming much
easier and effective as well.

An excellent example of how well this can work is Cincinatti Microwave. They
manufacture and sell what are (arguably) the best radar detectors available.
But you can't buy them at your local car shop. You pick up your phone, visa
card in hand and phone their 800 number. Within a day or so it arrives UPS
Blue. 

CM sells their products at prices slightly less than the other (not quite)
equivalent products that are available from your local automotive shop. But
in their case they get 100% of the price (less sales support costs) compared
to their competitors getting probably around 30% of the selling price. 

While it may be arguable about whether or not they have the best products it
is not arguable about who is biggest. 

The problem for company like SCO or ISC is that if they start giving
discounts to people who deal directly with them their distributor channels
start to get very upset. And up till now their distributor channels have
been very effective at producing sales. So they tend to try and push
customers to the distributors and resellers. 

-- 
Stuart.Lynne at wimsey.bc.ca uunet!van-bc!sl 604-937-7532(voice) 604-939-4768(fax)



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