From: sjb5@ns1.cc.lehigh.edu (STACY JOHN BEHRENS)
Newsgroups: comp.os.os2.advocacy
Subject: Re: Bundling Networks, OS/2 v. NT
Date: 12 Oct 92 00:24:30 GMT
Organization: Lehigh University

In article <1992Oct11.093615.7205@microsoft.com>, petesk@microsoft.com (Pete Ske
lly) writes:
>In article <1992Oct10.231756.49561@ns1.cc.lehigh.edu> sjb5@ns1.cc.lehigh.edu wr
ote:
>
>> >
>> >Well, I hate to say it, but software doesn't work that way.  Software
>> >is almost all startup up cost and and very little production cost.
>> >Software has no intrinsic value besides what people are willing to pay
>> >for it, and if what you say is true, that most people won't be using
>> >the networking products, then the networking products will be worth little
>> >to them.  They will be willing to pay what they were willing to pay for the
>> >orrigional WNT product, minus the value of the networking products, which
>> >was little or nothing.  The net price will not have changed.  All that
>> >will change is the possible price for the WNT with the networking, which
>> >may go up, because the people willing to buy it will pay more for it.
>>
>> So no money went into developing that networking software?  If people want
>> and/or need the networking, they *will* buy it.  If they don't need it, don't
>> force them into it.  Are you claiming that NT would cost just as much if we
>> removed networking, multiprocessing, and security features?  Of course it
>> wouldn't.  In fact people would really bitch and moan about this.
>
>Let X be the cost of development per unit sold.
>Let Y be the price per unit per unit sold.
>
>To make a profit, X < Y.
>
>Now, who ever said that Y = f(X).
>
>More to the point, Y is not necessarily based on the value of X, more than
>it should be more than X to make a profit.  Y is based on what the market
>will pay for the product.  Simple economics.
>
If you don't sell enough copies or the price is too low to cover the
development costs for a given set of features, then you lose money.  People
don't like to buy things they don't need.  Even simpler economics.
>
>
>>
>> >>So in asking to remove networking, you are asking to raise the price of
>> >the networking version, and not lower the price of the non-networked
>> >version.
>>
>> No you are lowering the price of the non-networking version.  The costs didn'
t
>> go into that version and so the company can't honestly claim that the
>> pdevelopment price is just as much.
>
>The price for the Non-networked version will be what people will pay for it.
>People, like yourself, will not pay more for the networked version.
>So, if networks are shipped with all versions, then to sell it to you,
>the price should be the same as the price you would have paid for a
>non-networked version.  What's wront if the price is the same for the
>networked and non-networked versions.  Then MS is eating the cost
>of network development, so to speak.  Would you still complain.
>If not, then why not ship everyone the networked version, at the
>cost you would have paid for the non-networked version.
>Would it not then be possible that the development costs of the network
>be made up by the extra sales of people who would buy NT because it
>is a good networking deal.

  When I buy a product, I am buying a certain set
features which I deem cost effective for what they provide.  The company I buy
it from has a responsibility to price this at a price that is equiable to both
parties involved.  If the price is not set to a point where I can pay for it
because it includes features which I deem unnecissary to me, then that product
will not get purchased.  The networking development involved a certain cost.
Take the networking out of a certain version, and I am no longer purchasing
that networking software, nor will I be any further burden on that company for
that particular feature set.  Therefore the price of the development costs
should not enter into the equation for that product and thus it should cost
less.  MS would be selling the networking to those who need it and want it.
If the demand for it is not there then they made a poor business decision in
trying to support it.  Since one of NT's biggest strengths is in its
networking, I seriously doubt this would be a problem.  MS may actually be
hurting sales because people will take one look at it and say, hey I don't
need that, why should I pay extra for it when the competition's product does
what I want and only makes me purchase what I need.  If MS really is listening
to their customers, and I potentally qualify as one, this is something a lot
of people desire.  It certainly wouldn't hurt sales one bit.

>petesk@microsoft.com
>My Opinions...
>
-- 
Stacy John Behrens
*===)-------------
Newsgroups: comp.os.os2.advocacy