smith@origin.life.uiuc.edu (Steven Smith) (05/06/89)
With the advent of the new SUN 3/80, Sun is in a position that the company has never been in before. Sun can now offer a system that is functionally as good as (better) than a similarly equipped Macintosh for a lower price. This places Sun in a much larger market share than they have held in the past. Sun can now deliver software "compatible" products that span all the way from desktop micro to graphic workstations to large scale mainframes, and in the process, blur the lines dividing them a bit more. But will Sun be ready for the micro market? Sun has always been a pioneer in the bang per buck club, under cutting the likes of DEC and IBM in any price/performance comparison. They accomplished this by limiting their profit margin in favor of market share. Well, once again it is time for Sun to take this approach, but this time it must be in software. In order for Sun to make any dent in the personal computer market, their notions about software pricing must change. Since their migration to SunOS 4.0, Sun has made it known they see software as a profitable commoditiy. The "unbundling" of 4.0 says this loud and clear. Fortran and Pascal, once considered part of the standard Unix release are now considered unneeded by the average user, and thus should be sold seperately. At the same time, new tools such as SunWrite/Draw/Paint are priced at an outrageous $1000, even though such tools are considered mandatory for any functional personal computer in today's market. Sun will sell such tools as NeWS for a reasonable cost. But the primary reason for this appears to lie in Sun's wishes to make NeWS a standard. If Sun does plan to move into the low-cost market, then they must make it affordable to program and use their machines. There is a lot to be said for the NeXT machine for this reason alone. The $6500 that an educator pays gets him much more than just a black box. Why Jobs even bundled Mathematica, not to mention all of the basic tools. So Sun, if you are listening, you have a chance to knock the top right off of the low end market. But you must make it worth while for people to make the big jump to Unix. You must convince the cottage software industry that you will help not hinder them in development. And you MUST make it cheaper for people to get basic work done. Steve Smith U of Illinois, Microbiology smith@origin.life.uiuc.edu These opinions are my own, and not necessarily those of the University of Illinois, faculty, or board of trustees. /*Please mail flames directly, no need to jam the Digest*/ [[ Whoosh! --wnl ]]
dav@hplabs.hp.com (David L. Markowitz) (05/12/89)
In article <8904222133.AA04813@origin.life.uiuc.edu>, smith@origin.life.uiuc.edu (Steven Smith) writes: > With the advent of the new SUN 3/80, Sun is in a position that the company > has never been in before. Sun can now offer a system that is functionally > as good as (better) than a similarly equipped Macintosh for a lower price. > This places Sun in a much larger market share than they have held in the > past. Sun can now deliver software "compatible" products that span all > the way from desktop micro to graphic workstations to large scale > mainframes, and in the process, blur the lines dividing them a bit more. > But will Sun be ready for the micro market? I think Sun is very worried about this too. They don't yet know HOW to approach this market. I have been told that Sun would like to market these machines through stores, but they are waiting for a few things. One comment that I heard was that Sun is "waiting for an appropriate product"! It sure seems to me like they already have a couple and are just dragging their mice - ummm - feet. Considering that IBM markets the RT through retail outlets... > In order for Sun to make any dent in the personal computer market, their > notions about software pricing must change. Not just theirs - the third party software companies are just as, if not more so, guilty of this. > At the same time, new tools such as SunWrite/Draw/Paint are > priced at an outrageous $1000, even though such tools are considered > mandatory for any functional personal computer in today's market. I have been marketing software for Suns for the past three years. At one point I was informed (by a potential customer) that I had the lowest priced product in the Catalyst catalog. This was because my product is a game, and I had priced it based on the cost of games for PC's. It is no longer listed because Sun, in their wisdom, decided to drop the games section of Catalyst. Now that Suns are making their way into the home and dormitory (this started with the 386i), I would like to see a simple way to market this "shrink-wrap" software that Sun likes to talk about. > If Sun does plan to move into the low-cost market, then they must make it > affordable to program and use their machines. There is a lot to be said > for the NeXT machine for this reason alone. The $6500 that an educator > pays gets him much more than just a black box. Why Jobs even bundled > Mathematica, not to mention all of the basic tools. They also need an easier retail/educational sales outlet for hardware and software. You can't expect a sophomore to go to Sun's local office, and if they (all) did, the office wouldn't be able to handle the load. How about "authorized service centers"? What do students do when the monitor dies? > So Sun, if you are listening, you have a chance to knock the top right off > of the low end market. But you must make it worth while for people to > make the big jump to Unix. You must convince the cottage software > industry that you will help not hinder them in development. And you MUST > make it cheaper for people to get basic work done. Even if Sun isn't listening. Are any other entrepreneurs out there interested in creating a Sun software marketing house? I've got some products waiting for a market - who else does? David L. Markowitz Rockwell International ...!sun!sunkist!arcturus!dav dav@arcturus.UUCP The above opinions are merely that, and only mine.
alfred@mcc.com (Alfred Hartmann) (05/26/89)
David L. Markowitz' comments on this topic in SUN-SPOTS DIGEST, Monday, 15 May 1989, Volume 7 : Issue 293, are very accurate. It is the plentious availability of low-cost software running on low-priced commodity hardware that makes the PC market the Number 1 computer industry segment today, measured in numbers of users, numbers of dollars, numbers of systems, aggregate MIPS, tonnage of available software, number of trade publications, impact on business, education and humanity, or whatever metric you prefer. Workstation cost would have to drop to near zero to make the total cost to the user of hardware + software equal between PC's and workstations. Whatever pundits are comparing only hardware costs are leaving half the terms out of the marketing equation (and probably the terms with the higher coefficients). Workstation software is priced to whatever the corporation can bear, and is totally ought of sight for personal budgets. Airlines know all about this type of pricing racket, and price their tickets high for the business traveler, whom they identify as someone who books late and doesn't stay over a weekend. But the "personal traveler" who plans his or her vacation in advance and stays awhile gets lo-ball MaxiSaver fares. Otherwise they would drive a car (personal transportation, comparable to personal computer). Either the workstation and third party workstation software vendors have to figure out a similar pricing strategy, to weed out corporate Daddy Warbucks from at home users, or they can kiss their futures goodby. They can't continue to have annual production runs equal to one day's manufacturing output of personal computers and still expect to be around in the next decade. You would think the workstation software vendors make enough profit advantage by selling node locked software, so that the software price could be equal with PC software, which is typically passed around among a few friends. That ought to be worth a profit advantage of maybe 4X - 6X versus the unauthorized copying that goes on with PC software. But their desire for margin advantage doesn't end there, and the workstation software package price is jacked up another 4X - 10X in absolute dollars (from tens or hundred of dollars for the PC version to thousands of dollars for the workstation version of similar software). So that makes the compounded total price elevation for workstation software more like 16X - 60X over the effective PC software price. And that doen't even include the other PC software advantages, like wider variety of PC software, easier acquisition (storeshelf shrinkwrap vs. signed multipage license agreement plus money order mailed off somewhere), easier installation (no PC superuser/Sun worshiper), fourth party how-to-use manuals in any bookstore, stop by the computer store demos, demos on television (PBS' weekly Computer Chronicles show), etc. etc. etc. PC's bring computer power to the people through low total cost of ownership. Workstations haven't made much of a dent in total cost of ownership just by offering low priced hardware, any more than discount needles would lower the cost of a drug habit. --Alfred Hartmann MCC - Austin, Texas alfred@mcc.com