Subject: Re: [ppc-mobo] Re: GPL-like hardware design license?
From: "Brian J. Fox" <bfox@ua.com>
Date: Thu, 7 Oct 1999 01:43:22 -0700


   From: "Stephen J. Turnbull" <turnbull@sk.tsukuba.ac.jp>
   Date: Thu, 7 Oct 1999 15:03:36 +0900 (JST)

   Ah.  Something interesting, after all.

   >>>>> "Brian" == Brian J Fox <bfox@ua.com> writes:

       Brian> If your modifications create product development that you
       Brian> don't have to pay for, but that satifies your
       Brian> additional/alternate business needs, then you will directly
       Brian> benefit from the competition between those companies
       Brian> developing the products.

       Brian> Doesn't this carry monetary value?

   Probably not.  Assuming that my business and its competitors have
   similar needs and opportunities, cost reductions for a business due to
   decreased input prices will be matched by similar reductions for the
   competitors.  If my rivals compete on price, the cost reductions will
   simply disappear at the bottom line due to "pass-through" reductions
   in price.

   It is unlikely that a single business can increase its profit by using
   a free license.  The only circumstance I can think of is when the
   customers care about the "free" label (eg, as some people care about
   "Made in USA" labels).[1] This is plausible for certain kinds of
   software (eg, targeted at Linux users), but not for embedded systems,
   and probably not for PCs.

I find this fascinating.

RedHat employs programmers -- this represents some portion of their
monthly nut.  RedHat also gives away the results of this R & D.  And,
of course, RedHat uses software that they didn't create which runs on
RedHat systems.

RedHat makes money on customer relationships, based on faith and
trust (in much the same way that IBM does).  The actual product is in
reality a commodity.

Now, let's say I design a motherboard which has distinct advantages
over what is out there already.

If my business model says that I have to make money selling
motherboards, and motherboards alone, giving my design away simply
creates competition in my space.  But, if I am a forward-thinking
company, then I actually have some other space in mind into which I
will be selling my products, for example, entire system packages for a
specific market segment.

In this scenario, I'm not even interested in manufacturing
motherboards, I simply want to use a higher quality motherboard in my
completed systems.

So, instead of paying for the actual production of the boards, I let
others have my design, and they do the work of creating the actual
good, which might involve creating business relationships with BIOS
vendors, leveraging existing relationships with chip manufacturers,
etc.

I simply purchase the board from the lowest bidder, with the distinct
advantage of having had my board design available before anyone else,
allowing me a faster time to market, better integration into my
specific vertical markets, etc.

End result?  I paid for R & D but not manufacturing, I stayed focused
on doing the business that I am in, and I'm first to market in my
segment.

Brian