Subject: Re: appliance-based business models
From: "Stephen J. Turnbull" <stephen@xemacs.org>
Date: Wed, 26 Oct 2005 14:54:28 +0900

>>>>> "David" == David Kaufman <david@gigawatt.com> writes:

    David> Selling a box however, that is truly *worth* ten times the
    David> sum of its parts, *because* of the software that you
    David> installed on it (and, perhaps, just coincidentally you also
    David> wrote or helped to write) is quite appealing to developers,
    David> is it not?

Well, here Joe Corneli is right.  What that box is *worth* is the
smaller of (a) the intrinsic value to the customers (ie, the price at
which they'd rather do without) and (b) what the customers have to pay
for comparable equipment elsewhere.  If the hardware is commodity
hardware and the installation is straghtforward and the software is
free, that "ten times the sum of its parts" will soon be driven to
1.0000 (or, if you're not as smart a systems integrator as you
thought, 0.85) times the sum of its parts, because _that_ kind of
profit margin draws VCs like blood draws sharks.

If that margin lasts from the time your high school senior takes the
SAT until you write your first tuition check to Stanford, I whiff

    David> the "evil" things that stubbornly appear to be
    David> indispensable to turning a profit in the software
    David> "publishing" industry

But it sounds to me like what you really mean is that the _value_ is
_here_:

    David> Now we must fix the bug where the customer plugs it in
    David> upside down or on the same power strip as the office
    David> coffeemaker.  Here we have to write the procedure where the
    David> tech support folks take the call to explain why coffee and
    David> electricity don't go together while still making the
    David> customer feel happy that they chose your product, and will
    David> still enthusiatically recommend your company to others,
    David> because you treat people like people, and, well, not like
    David> bugs.

That's the core competence.  Software development is merely a (useful)
hobby.  You might very well find yourself at the mercy of a competitor
who has no illusions about being able to do _both_ well.  In fact, we
already know he's at least as good a software developer as you are,
because his software _is_ your software.  Odds are that somebody out
there is a better appliance engineer than you are, and has no
addiction to software development to confuse him about priorities.

See also Michael Tiemann's home page at
http://people.redhat.com/~tiemann, especially with reference to the
last few lines of his "timeline of contributions to GNU".

Now, I have nothing against appliance salesmen; I had a Maytag washer
and dryer set for many years.  Great stuff!  Said jokingly, but 100% sincere.

But I'd really like to see software developers be rewarded for being
software developers, not for doing something else!

[...]
    David> So the Sourcefire/Snort situation has admittedly gotten me
    David> a little excited that theirs may be a way to effectively
    David> straddle the free software and profitable software worlds
    David> without compromising the freedoms and fairness we enjoy in
    David> the former or settling for mere "lifestyle business",
    David> one-man-show, small-potatoes or also-ran status in the
    David> latter.

It is, but only if your software is amenable to packaging as an
appliance "with no user-servicable parts".  Most software is not;
that's the fundamental semantics of "software", especially as modified
by the word "free".


-- 
School of Systems and Information Engineering http://turnbull.sk.tsukuba.ac.jp
University of Tsukuba                    Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
               Ask not how you can "do" free software business;
              ask what your business can "do for" free software.