Let me clear up a few things. Where as I think they should keep a consumer product I don't think it makes sense to put it in best buy or any of the other major distributors. You are absolutely correct that the cost is very high. Now as to the cost of producing the product. You are accounting for an organization that doesn't have the infrastructure in place. Because of this your estimates are not conservative, they are overstated. I will address a few points. > 4) A good majority of the people I have talked to who are complaining > about it have only bought handful of boxed sets (if any) and then used > those to install it on hundreds of computers. It was good for their OEM > or consultant business but bad for Red Hat because they were spending > tons on development but seeing little in return. This does not change with them working with Fedora or not. As far as whether this is of a benefit or harm to RH it is arguable. It is, however, the nature of producing a product based on free/libre and open source software. This is the market that Red Hat is in. For this reason they make their money on subscriptions to RHN. I own 8 subscriptions for RHL and 3 for RHES at work. I am happy to be paying for the service. > FTP/WWW colocation internet costs. Probably $1 mil/year for the > bandwidth, power, machine maintenance. And from what I have seen.. those > prices are going up and not down. These costs are incremental based on the number of subscribers. Since they have the architecture in place already your costs are likely high. Moreover, when you consider Fedora is freely available over the same network your arguments have little weight. > 2-4 Maintenance engineers and 3-6 QA staff. Maintenance engineers are > a special breed because they have to remain focused on old 'crap' that > might be fixed in a newer edition but with a complete new API/ABI so you > cant go to it without breaking 200 other apps. Cost to company counting > benefits, taxes, overhead, and other items.. 175k->250k per engineer. > Take the conservative numbers... 875,000.00/year. I will give you a fixed cost of 175k-250k for this. My email however said that they would simply take a current Fedora version and make it the home product line. Therefore they need only maintain it for 2 years as the product would already have been well tested as Fedora w/6-9mo under its belt. > There are additional costs in sales force(staff of 3-6), technical > support (staff of 12 minimum to deal with just the amount of tickets 6.2 > produced.), keeping a maintenance lab, shipping of defective product, > creation of the product, discounts for various partners, and things like > that. If you take a more conservative interval of ~1/year, you end up > with about 2 mil/year in those costs. The core team is in place already to deal with these costs. The additional costs of the specific product line should be very low. > Also I think this doesnt take into the taking back 'damaged/unsold' > goods that most small producers have to have in their contracts. The > last numbers I saw was that on average that was 60% of all product > shipped into the retail market. I cant remember how that is added into > the cost structure (or if I have already done so.. so I wont try to add > it in again) If it's a direct product this is minimal and incremental based on the number of SHIPPED copies. Personally I don't care if it's download only so long as they fix their PO process. > There is little stopping others from doing this with Fedora. Of course > they will have to help absorb the costs of updates for the 2 years. And > push to get it into channel, and all the other things that are mostly > money losers. You are right. Except for the fact that they don't have the infrastructure in place to do it and they aren't already deeply tied to the project. I believe the costs for Red Hat are much closer to $200,000 annually + $5 / RHN subscription. This wasn't a cost or profitability decision. It was made because they wanted to increase the user base of RHWS. Their motivating factor is lost sales. In time we will see if the increased RHWS subscriptions are better than the bridges they burned with desktop users. Remember every person that is offended to a point of complaining costs on average 10 people later. -Chris "Restriction of free thought and free speech is the most dangerous of all subversions. It is the one un-American act that could most easily defeat us." - Supreme Court Justice William O. Douglas
