Subject: Re: implementing revenues
From: Zimran Ahmed <>
Date: Wed, 19 Sep 2001 15:46:52 -0700 (PDT)

> The costs of task-based contracts are always going
> to be proportional
> to their price, and competition will always push the
> margin towards 0.

margins in service based contracts will not be pushed
to zero. look at strategy consulting, legal, financial
advisory etc. which all operate this way without zero

remember, productivity of programmers varies widely.
most engineering environments are terrible. There is
LOTS of room here for fee-for-service firms with
non-zero margins. 20%-30% is not unusual in this

> "total solution", but it isn't really a basis for
> growth.

i'd have to disagree (see above).

> The margin for boxes of Free Software is, again by
> competitive
> pressure, always going to be low.  The number of IT

again, i would have to disagree. remember, in a
network economy you want to commoditize away the
complementary good. IBM loves linux because its the
ultimate commodity OS -- if they can load it into as
many of their boxes as possible, that's great.
Commodity OS actually helps de-commodify the hardware.
So again, i would have to disagree here.

also, would you consider TiVO a FS Box? you should.
All embedded devices should seriously consider Linux
as being the ONLY OS of choice.

> developers buying boxes is always going to be small
> compared to the

i would disagree. again, you need to be broader in
what you consider a box.

> A third strategy is net-based upgrade subscriptions.
>  There, at least,

subscription based stuff is something all tech folks
are struggling with. TiVo has come closest. MSFT may
manage it with .NET. Oracle et al. essentially manage
it with the lease-style contracts.

> least two
> strategies: (1) pray to the magic cauldren; (2)
> develop innovative
> technology that supports super-efficient creation of

<sigh> sooner or later the tech industry is going to
figure out that consumer oriented devices are NOT
watching consumers carefully and building stuff they
actually need. Palm used VERY OLD TECHNOLOGY. TiVo
used VERY OLD TECH. Email, AIM, and the Web is VERY


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