enterprise distribution

[jc at trillian.mit.edu (John Chambers)]

Jerry Feldman wrote:
| We can look at the history of the PC.
| When the first desktop computers were introduced in the late '70s, few found
| their way to the corporate desktop. Some software, such as VisiCalc started |
| to get the feet in the door. However, in comes IBM with a piece of junk,
| and instantly, just about every corporate accountant had one on their desk.
|
| Was IBM's marketing that good? What they did was to legitimize the PC.
| Something, Apple et. al. could not do. I think the same is with enterprize

I've seen the theory that there are two ways  for  a  product  to  be
successful:  1)  high  quality,  2)  a  large  marketing budget.  The
important thing to realize is that there's no point to  having  both.
If you have either, the other won't increase your sales. It will only
increase your costs.

This has been presented as the explanation behind the low quality  of
market leaders in many fields, and computers are often the very first
example.  Bill Gates leverages his IBM connections to get a  huge  ad
budget  for  his  software.   Given that budget, quality software was
pointless.

| Your statements brings up some interesting questions.
| The enterprise vendors, such as Red Hat and SuSE are not selling the bits,
| they are selling the support and services. The corporate mentality is
| always going to question the freebie, whether good or bad.

Very true.  The mantra is "You get what you pay for." This  has  long
since been proven untrue in the computer biz, of course. In fact, you
could make a fun argument that there's an inverse relationship.   But
business people do tend to fall for this. So they're suckers for junk
that has a large price tag, such as IBM or MS products.

They're not the only ones.  A few years ago, I read an anecdote about
a  doctor  who wanted to lessen his work load.  He raised his prices,
thinking that would scare away patients.  He  was  flooded  with  new
patients.   He  had  to  resort to turning away sick people, which is
kinda hard for a doctor to do. But he pretty much had to, because the
logical alternative wasn't economically viable.

For that matter, look into the pricing of diamonds.  They  should  be
rather  cheap, considering that there's a good supply of them and not
all that many real uses. But the supply is also concentrated in a few
physical  locations.   So  it's  possible  to implement a cartel that
controls the sources and sets a high price.  This in turn produces an
artificial demand for a status good.

Some economists like to use the word "perverse" ...