On Tue, 2003-10-07 at 14:04, Chris Spencer wrote: > 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. > So sort of move back to the pre-6 days when you could only get it online or through some computer store that bought it on-line.. or even further where there is no physical copy.. just what you get off of RHN? That might be feasible if you also limited bandwidth to only RHN paying customers. > 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. > Actually, all my costs were with infrastructure in place and on-going. The big old database servers, netapps, and other stuff are all bought. > > 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. Actually I was going by the bills for ongoing colocation at a smaller facility and upgrading it to a newer one. There are a LOT of computers behind RHN to keep it going, handle the load etc.. I have good idea that the initial creation of RHN cost a lot more than 1million. The netapps that support just the regular FTP/WWW cost that much. > > 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. > The cost of Fedora downloads is probably considered overhead into this.. bandwidth isnt free and therefore has to be accounted somewhere. > > 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. > Maintenance is expensive.. I do it and you cant just take the latest and greatest to do it right without pushing out a completely new distro to consumers every 6 months... at which point you arent maintaining it.. you are just telling people to go to latest fedora. > > 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. > These are ongoing costs.. initial costs were much higher. > > 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. > They have a process now? That was always a work in progress as different customers had different PO requirements. The problem with direct 'product' is the storage and then shipping and handling costs. Red Hat was very much in this model up until 6.0. It went through about 3 outsourced shipping/handling companies as the volumes grew. You can either bring it all in house which would be a new cost center of initial infrastructure, or you can use 3rd party groups but lose a lot on that. > > 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. > -- Stephen John Smoogen smoogen@xxxxxxxx Los Alamos National Lab CCN-5 Sched 5/40 PH: 4-0645 Ta-03 SM-1498 MailStop B255 DP 10S Los Alamos, NM 87545 -- So shines a good deed in a weary world. = Willy Wonka --
