Path: utzoo!utgpu!jarvis.csri.toronto.edu!mailrus!tut.cis.ohio-state.edu!attctc!chasm
From: chasm@attctc.Dallas.TX.US (Charles Marslett)
Newsgroups: comp.unix.i386
Subject: Re: 1-2 vs unlimited licenses (Unix for a 386)
Summary: Peter, DEALER, not INTERACTIVE
Message-ID: <9234@attctc.Dallas.TX.US>
Date: 5 Sep 89 04:09:36 GMT
References: <1989Aug16.020438.5662@esegue.uucp> <7186@megatest.UUCP> <5956@ficc.uu.net>
Organization: The Unix(R) Connection, Dallas, Texas
Lines: 44

In article <5956@ficc.uu.net>, peter@ficc.uu.net (Peter da Silva) writes:
> In article <1109@virtech.UUCP>, cpcahil@virtech.UUCP (Conor P. Cahill) writes:
> > wrongo.  A minimum algorithm would be if the 1-2 user system 
> > can profitably be sold for $x + $x*markup, then the unlimited 
> > user system can profitably be sold for $x+100 + ($x+100)*markup
> 
> This doesn't follow, because the retailer has no money at risk on the
> unlimited license. They don't have to send the cash to AT&T until the
> product sold, so the only capital at risk (which is what you should be
> judging profit margins against) is the packaging and warehouse space.

It may be true that dealers do not need to pay for the AT&T license fees
until the product is sold, but in those cases the dealer also does not have
to pay any other money for the product until it is sold.  AT&T's license fees
are not identified seperatly on the Unix invoices I have had to pay (This
applies to both Interactive and SCO Xenix packages).

If the retailer pays $X wholesale on the box he DOES have $X at risk.
And if the other box cost him $(X+100) he DOES have $(X+100) at risk.

> If the cost on that is $x, with y% profit, then they can make the same
> real profit (for salaries, stockholders, expansion, etc) on a limited
> license at $(x *y%) + $50, or an unlimited license at $(x * y%) + $150.

Again, he makes the same profit, but not the same margin (if he invested the
$100 per package in the bank, he would make the same profit from his business,
and he'd make some interest off the deposits in the bank).

> They get a higher profit margin for the multiuser systems.

This had better be true (as you mention in the paragraph below), but it is
not as much higher as the naieve analysis might indicate.

> I suspect, actually, that this is justified... since I suspect that larger
> multiuser systems suck up more of their support time.
> -- 
> Peter da Silva, *NIX support guy @ Ferranti International Controls Corporation.
> Biz: peter@ficc.uu.net, +1 713 274 5180. Fun: peter@sugar.hackercorp.com. `-_-'

===========================================================================
Charles Marslett
STB Systems, Inc.  <== Apply all standard disclaimers
Wordmark Systems   <== No disclaimers required -- that's just me
chasm@attctc.dallas.tx.us