From: mccall@mksol.dseg.ti.com (fred j mccall 575-3539)
Newsgroups: comp.os.os2.advocacy
Subject: Re: Bundling Networks, OS/2 v. NT
Date: 9 Oct 92 19:27:42 GMT
Article-I.D.: mksol.1992Oct9.192742.28784
Organization: Texas Instruments Inc

In <1992Oct06.213627.3688@microsoft.com> petesk@microsoft.com (Pete Skelly) writes:

>In article <rhoward.718334894@matd> rhoward@matd.gatech.edu wrote:
>> I have followed a bit of discussion about the pros and cons
>> of bundling all the network support in the base package.  I
>> tend to agree with the non-bundlers.  But....
>> 
>> One of the arguments the NT'ers have used throughout this 
>> discussion is that a bundled network product will work
>> better because it is more "tightly integrated".
>> 
>> Hasn't anyone thought it a bit interesting that the much 
>> vaunted modular, micro kernel based, object oriented operating
>> system that NT is supposed to be *needs* to have the network
>> stuff bundled to achieve "better" or "decent" performance
>> and functionality?  What's the point of a modular or micro
>> kernel based OS?
>> 
>> Please enlighten....
>> 
>> Robert

>I'm a bit curious about why people don't want networks bundled.  This is
>regardless as to whether the network is more integrated or not.

>The only two reasons I came up with as to why people wouldn't want 
>bundled network software are the following:

>1) You think the final product would be cheaper if these things were not
>   included.

>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.

Well, Pete, I hate to say it but software DOES work that way.
Somebody has to pay the development and maintenance costs on all that
network stuff.  Now either that cost gets added in on EVERY package
(which people who don't want the network stuff don't want to pay) or
that cost gets covered in the price of separate network stuff.  It is
that first part that people are complaining about with regard to
unbundling the network stuff, with the tacit assumption that if the
network stuff wasn't IN every package, MS wouldn't use profit margin
from NT to subsidize development and maintenance of all the network
cruft.  What this would result in would be a lower price for NT,
proprer, and a much higher price for the package of NT+network
(because the development and maintenance costs of the network software
would have to be amortized across many fewer packages).

You see, because of the fact that 'production costs' once the software
exists are such a small part of things, software is actually MORE
'like this', not less.  The fixed cost, once you decide to have and
maintain the software, are the vast majority of the cost of producing
the software.  That's why if you sell more you can lower the price
more steeply with software than you can with, say, automobiles.

-- 
"Insisting on perfect safety is for people who don't have the balls to live
 in the real world."   -- Mary Shafer, NASA Ames Dryden
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Fred.McCall@dseg.ti.com - I don't speak for others and they don't speak for me.