Subject: Re: appliance-based business models
From: "Stephen J. Turnbull" <>
Date: Thu, 27 Oct 2005 21:53:39 +0900

>>>>> "Jim" == Jim Thompson <> writes:

    Jim> Stephen J. Turnbull wrote:

    >> 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.

    >> That's the core competence.

    Jim> Yeah, we got that guy, spent years at Tandem and IBM (he's
    Jim> way old).  Customers love him.

    >> Software development is merely a (useful) hobby.

    Jim> Oh great, thanks.  (So it doesn't matter if I'm late?)

That's for you to answer, for _your_ business model, of course!

According to David's description of this business model, though, yes.
That's what "core competence" means.  Everything else is
outsourceable.  Happens every day, doesn't it?

I'd be happy to be proved wrong.  But it doesn't do any good to ignore
that possibility; great idea + hard work + wrong business model =
unhappy (maybe bankrupt) people.

So we're back where we started: we don't know how to turn free
software assets into a revenue stream.  We only know how to turn
developer labor into a revenue stream.  That gives competitors who do
turn software assets into revenue streams a huge advantage, and turns
the expansion of "FSB" into "Red Queen's race".

All of which puts the marketing group in control, unless you are a
real star.

My brother's a hardware guy, good enough that when he gets laid off,
he calls it "time-and-a-half vacation".  But he's not a star, and his
one complaint (that I've heard) is that he never gets far enough ahead
of the marketing demands for the workable to do something weird and
wonderful.  That's what Brian Behlendorf is saying, too, though he is
more businesslike in talking about radical improvements that you can
never quite afford to implement, and the huge temptation to
"corporate" to take the "faster, better, cheaper" technology away from
competitors somehow.

    >> 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.

    Jim> No, he can't stand the thin margins and "lack of proprietary
    Jim> content", so he stays away from "open source" and "free
    Jim> software" and tries to mix in his own stuff (and then charge
    Jim> more).

Laurent Guerby just posted that his company had no problem figuring
out why open source made sense for them, although they knew nothing
about it when they started.  Maybe you're underestimating your rival.

    >> 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.

    Jim> Sure, but I can *buy* appliances in the market.  Some of them
    Jim> quite high-end.

I don't understand.  I thought this thread was about _selling_
appliances to feed your coding jones.  "OEM" doesn't fit the bill as
far as I can see, since free software gives you no advantage (assuming
a rival competent to recognize the quality of the software).

    Jim> But I don't understand your point citing Tiemann.

It's the same one that Brian Behlendorf made: we end up with the
marketing tail wagging the development dog.  Michael Tiemann says he
loves his job.  Great!  But what if you'd rather be writing code?
Then it doesn't help to see how Michael Tiemann did it, because he
found something he likes as much as being a developer, but is
something different.

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

No comment on that?  This is my main point.  And it's not just because
I love software developers, although some of my best friends are
software developers.  ;-)  Software development, specifically software
development oriented toward solutions of _other people's problems_ is
socially beneficial, and should _as such_ (not just "in combination with
marketing", etc) be _directly_ encouraged, with lots of dirty old
greenbacks as well as shiny gold stars.

Of course development needs to be combined with marketing, but
_developers' pay_ should not depend on their _marketing talent_, any
more than marketers' pay should depend on their coding talent.  The
combination should be achieved by the organization, not by each
individual member.

    >> 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".

    Jim> We do it, its not a big business, but its a good living for
    Jim> half a dozen people, and we have a lot of fun.

Great!  If you're having fun, and making a satisfactory living, I have
nothing to say to you, except Congratulations!

As a social engineer, that's what I'd like to have for _everybody_.
That is the kind of world I'd like to construct.  So what do you have
to say to me?  What is it you _do_, and how does that "work", and how
can I apply that to, say, me making a bundle out of XEmacs?

Just kidding about that last, of course that's not fair.  Nobody has
claimed a panacea.  How about:

You've seen my arguments for a vicious cycle in the "appliance model"
that turns developers into mere employees of the marketing arm.  How
do we _systematically_ break that cycle to achieve a better balance,
that (a) compensates the developers with a good lifestyle and (b)
leaves enough surplus for "a mix of people who are there for
sustaining reasons, those who are there for core development of new
features (and whose salaries have to be paid somehow), and those who
are there for fun, for the intellectual stimulation of it all"?

In fact, I'd like to go a little farther.  Brian calls those who are
there for intellectual stimulation "hobbyists", but I'd like to see
some way to pay them, too.

Feel free to answer the unfair version of the question, too.  I'd love
to have an answer!  :-)

School of Systems and Information Engineering
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.