From: johnston@me.udel.edu (Bill Johnston)
Subject: Re: Suggestions for the free Unix projects
Organization: University of Delaware
Date: Sun, 4 Oct 1992 02:49:04 GMT

In article <1al9j6INN9q2@almaak.usc.edu> ajayshah@almaak.usc.edu (Ajay Shah) writes:
>terry@cs.weber.edu (A Wizard of Earth C) writes:
>
>>>There may be a role for a profit-making company to make a $50
>>>shrink-wrapped free Unix with a manual and limited support.
>
>>o	$54 for a boot floppy and tape distribution.
>>o	$66 for a CD ROM distribution.
>>o	$116 for a floppy only distribution.
>>How does $1000 sound?  Like BSDI?
>
>Ok guys: how does Coherent do it?   :-)

That's easy:  bigger sales volume (and as Ajay points out, less 
media needed because the distribution is smaller).  This means 
that Coherent pays less for all production expenses than a startup 
or volunteer organization, with the possible exception of labor.

> They have to even write the OS ;-)

Same thing goes for the programming costs, which can be spread out 
over a very large user base.  Of course, one doesn't get a large 
user base without first satisfying alot of customers.  There is no 
reason why a company that distributes free software can't achieve 
the same economies of scale -- especially when the programmers are
willing to give away their work.

They'll still have to satisfy customers to succeed, and the measures 
proposed by Mr. Shah would be a good first step, provided that an
entrepreneur would be willing to spend the time and money to sell
a product without exclusive distribution rights.  

If the "product" of such a company is considered to be the "service" 
of compiling binaries for specific platforms, copying, and providing 
for easier intallation for end-users;  it should be recognized that
most of these "services" can be immediately duplicated by the first
customer, even if considerable effort goes into writing installation 
software and documentation (presuming of course that these would 
be copylefted, and that media would not be copy-protected).

A service company that provided customized free software installation 
would seem (to me) to have less opportunity of recouping startup 
investment than a technical support firm like Cygnus, which succeeds
partly because the act of solving one customer's tech support problem 
does not immediately pass along the means to enter into competition.

A much better business opportunity for a startup firm might be to 
sell x86 clones with Linux, 386BSD, or Hurd (eventually) pre-installed,
along with service agreements to provide on-going software updates.  

Assembling a quality x86 system inexpensively *and* installing one 
of the free unix-clones OS takes considerable expertise.  This would 
give a technically competent firm the opportunity to provide several 
types of service that customers would likely be willing to pay for, 
with less risk to startup investments from immediately being undercut 
by a competitor.

Now of course if someone wants to set up a non-profit organization
to do the same thing, that would be great.  Just take some time
to compare prices in your local food co-op vs. a big supermarket.
For extra credit, try to figure out why Sony sells more stereos
than HeathKit.  Masochists can ponder the fact that Apple now 
sells more personal computers than any other company.  ;-)
-- 
-- Bill Johnston (johnston@me.udel.edu)
-- 38 Chambers Street; Newark, DE 19711; (302)368-1949
Newsgroups: gnu.misc.discuss