Subject: Re: Software Insurance.
From: Russell Nelson <nelson@crynwr.com>
Date: 24 May 1999 02:13:01 -0000

[ Nat Friedman and Miguel de Icaza are starting a business to sell
  support for Gnome.  I'd meant to explain how support-as-insurance
  works while at LinuxExpo, but a long explanation in the fan club
  surrounding them was simply impossible.  You two can subscribe if
  you want by sending mail to fsb-subscribe@crynwr.com. ]

R. Brock Lynn writes:
 > Anyone ever thought about it?

Yes.  You have to work hard to eliminate free riders.  For insurance
to "work" (that is, spread risk), you have to ensure that your pool
has a well-balanced amount of risk.  If you allow anyone to sign on
regardless of their level of risk, you'll end up having to charge a
fee commensurate with fee-for-support.  For most people, that's too
expensive.

Essentially, to sell support-as-insurance, you have to become an
insurance company.  Somehow, proprietary software companies manage to
sell such support without becoming insurance companies.  They probably
do so because 1) they can bundle the support with the product, which
greatly increases their pool size, and 2) they have a monopoly on
selling support.

IMHO, we need to get some insurance company executives interested in
this idea.  After all, doctors don't sell insurance to patients, they
sell services to insurance companies.

-- 
-russ nelson <rn-sig@crynwr.com>  http://crynwr.com/~nelson
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