Market forces, entries, and exits
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| Author | Content |
|---|---|
| gus3 Sep 13, 2011 4:15 PM EDT |
When some entity (private or corporate) buys a product, the purchaser generally expects some kind of return on the purchase price. For example, my Asus EeePC 900 cost just over US$200, but between the pure utility and portability, and the ability to tinker with a somewhat constrained system--by today's standards, anyway--I have gotten back more than the $200 in practical use and mental exercise. If the purchase turns out to be unsatisfactory, "Satisfaction guaranteed or your money back!" can help to reverse the situation. Of course, this doesn't apply to purchase contracts such as cell phones or car loans. But the general rule is, the greater the initial investment, the greater the expected return. When Windows 95 came out, IIRC the low-end was US$50 in 1995 dollars. People expected to get back more than that $50, in improved system stability; I leave them to judge whether or not their investment was worth it. Now, let's take a hypothetical, oversimplified, Windows-to-Linux switch for an Oracle system to handle over 1,000 concurrent connections. Clearly, Windows wasn't up to snuff for such a mediocre load. So the exit costs, even accounting for the service contract's early termination and the depreciated initial investment, must be less than the maintenance costs of going with the status quo, in order to be justified as a business decision. After a point, the return on investment (ROI) no longer justifies the initial and ongoing investments. But what happens when zero-outlay or reduced-outlay, commonly referred to by the BSA as "piracy", enters the picture? The ROI may go up, as a percentage of the initial investment, but as the initial investment is lower, so are the expectations of performance. (Staff costs will be lower, too, because those who know will have to keep their mouths shut if they want to keep their jobs.) With these lowered expectations comes a raised willingness to leave. This would be true, even knowing that the exit costs will be greatly reduced; after all, how much can it cost to stop using something you won't admit to using to begin with? At some point, the initial investment ceases to be a concern. Product merits, including interoprability and customizability, become the dominant factors. Whether it's "acceptable piracy" in developing economies, or "unacceptable piracy" in affluent societies, is immaterial I think. Crud on a plate gains no esteem, except among those who invested in it. Or, as the sayings go: "There is none so blind, as who will not see." "Never argue with a man (or woman) whose job depends on not being convinced." Thoughts? Counterpoints? Am I onto something here? |
| jdixon Sep 13, 2011 4:23 PM EDT |
> People expected to get back more than that $50, in improved system stability. I'd say the selling points of Windows 95 were better performance and functionality, not stability. |
| skelband Sep 13, 2011 5:55 PM EDT |
@jdixon: "I'd say the selling points of Windows 95 were better performance and functionality, not stability." Wasn't W95 supposed to be the first Windows with proper pre-emptive multi-tasking? IIRC, the supposed benefit was that rogue processes wouldn't trash the system as easily. |
| gus3 Sep 13, 2011 7:17 PM EDT |
@skelband: the first desktop Windows with pre-emption, and that only for 32-bit Windows programs. Windows 3.x and DOS still used cooperative multitasking, within their shared space, even on Win95; WinNT 3.51 had pre-emption before Win95. The added stability was largely due to better address-space separation for Win95 processes. Was it worth $50? As I said, I'll leave that decision to others. |
| helios Sep 13, 2011 8:01 PM EDT |
"Never argue with a man (or woman) whose job depends on not being convinced." I read that as "Never argue with a man (or woman) whose job depends on not being convicted. Either way, it makes sense. |
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