Meeting with Netpliance 51
Kalin Harvey writes: A while ago I posted an announcement
on Slashdot asking for feedback to take to Netpliance regarding the i-opener
and their relationship with the hacker community. Since then I have
met with Netpliance and basically concluded that a lot of the dialogue
we were having about the company was missing the mark. Netpliance
is a different company than many of us thought and basically don't have
the ability to sell vast quantities of i-openers to the hacker community;
their whole focus is the service, on many devices, not just the i-opener
hardware. However, they also are big fans of open standards, and
would love help to contribute to an open development model and see the
embedded linux appliance market grow. They are also already making
commitments to working with the open source community. You can read
my full account
on linuxpower.org
Why do they care? (Score:1)
Those little boxes are awesome. I want thinking of getting a WebSurfer so I could telnet to my machine while still on the couch... but on a 32 inch TV...
We need to see more "open sourcing" of hardware... so I don't have to dig around to figure out how to get my Furby to speak of things past. I really didn't know what to say here... my bud, PB, says they should attack intruders. He is funny in the head.
Ryan
"Don't nargin your MEX files!"
For what it's worth... (Score:1)
Honorable Goal (Score:2)
Its a strange world we live in when companies actually reject customers who are Willing and Able to buy their product in the hundreds.
bpd
Kalin Harvey needs an economics class (Score:5)
Personally, I have begun to grow tired of these so called emissarys of the open source movement who make the open spource community seem like raving fanatics or clueless cheapskates. It doesn't take a genius to realize that Netpliance was always planning to sell the service and to go there and ask them to change their entire business model to satisfy a bunch of geeks who are not part of their target audience is ludicrous (heck, some ISPs still don't support Linux). It seems to me that if Open Source advocates want to be taken seriously by corporate interests they should be conversant with basic economic concepts and have an idea of real-world business practices. If this doesn't happen then corporate interests will continue to view Open Source advocates with disdain, suspision (sp?) and distrust.
Then again, do we reallly need corporate interests to satisfy all our wants? For example, if all you want to do is hack an I-opener, buy it, pay the $20 a month (if you're a good hack you make that much in an hour or two at work) and hack away. I'd simply see the $20 as a payment plan, similar to what I have on my car as opposed to buying a service (which it half is).
Re:Why do they care? (Score:1)
Those little boxes are awesome.
You should care - hacking the boxes is fine - they don't seem to mind it. The problem comes if you're buying the box just to hack it and use it outside of their service. These guys are selling these boxes at less than what it costs them to make them. If you hack the box and don't subscribe to their service, they won't be able to continue selling those "awesome" boxes.
netpliance internet service (Score:2)
Netpliance Propaganda (Score:2)
Re:I SUCK (Score:1)
bpd
Re:Honorable Goal (Score:1)
Sorry, not buying it ... (Score:3)
Their behavior with regards to how they handled this whole situation gives an obvious clue to the nature of the company. The author of this piece must not have much experience dealing with the teflon warriors, since the article read like some marketing drivel.
Sorry if this seems harsh, but it's true, this is a company that talks up open source, and open standards but controls the user's experience completely and goes with a proprietary OS for the device. Which is fine in my opinion, but coating the board with epoxy? That's ludicrous. Retroactively applying charges to consumers who didn't authorize them? Criminal.
The fact of the matter is they don't give a damn about any of us, they're driven by pure greed. And not "good" greed (where they'd ramp up and try to supply those of us who'd want a device without the strings), but bad greed ... hoarding the devices to ensure they have excess to maintain maximum profitability.
In my opinion, they're just another AOL wannabe, and can't see past their next fiscal year. This is worse than anything else they've done. Just another company exploiting the net by trying to reduce choice and enhance their control.
Am I cynical? Sure, from experience. Maybe I'm wrong and they really have a great vision and want to empower the consumers with great technology and yadda yadda yadda. More likely they just want as much money as they can possibly get.
good message (Score:3)
I'm basically a liberterian, I believe that information does want to be free and that we should have the right to do just about anything that doesn't hurt another.
However the overall tone, especially in the last few weeks has seemed to me to be a little extreme. There's a lot of @!#@ the man going on. Jon Katz's lastest rant is probably the best example of that.
The best part of having a community of very smart people is the possiblility of a dialog that considers issues from both sides.
We need to remember that netpliance probably has a staff with plenty of geeks just like us. They're not corpratist, they not looking to get rich by raping hackers, they're not making toxic chemicals or crack cocaine. They will simply be out of business if they sell $400 boxes for $99.
Rather than condem them for doing something that when we stop and think kinda makes sense, it's better to do as Kevin did and approach them rationally.
An mod-able i-opener at a price palitable to both hacker-consumers and netpliance is something we want, netpliance going out of business because we've bankrupted them is not good for them, us, or society.
ok, now tell me why I'm wrong
The Honest Market (Score:5)
But they're a perfect example about how a corrupted market can affect even non-corrupt entities such as Netpliance.
Consider the $300 to $400 rebates that have been applied to computer prices across the country. It's a nice way to subsidize the cost of a computer--"and all without the government stepping in". But suddenly prices are no longer as advertised; you can't even look at a computer product anymore without looking for the fine print to see what it REALLY costs.
More than any other market, technology abuses the core concept that what you buy is A) What you think you're buying and B) Costs what you think you're paying. Old Man Murray(the ridiculously brutal commentary page at www.oldmanmurray.com) recently savaged Origin Systems for, as they said, "They've broken the sacred bond of trust between gamer and gaming mega-corporation: that there is actually a game in the box you're purchasing."
You just don't get that in other industries, but a combination of clueless newbies who don't even know the primary purpose of what they're buying and intensely focused techies who don't care about anything *besides* the primary purpose of what they're buying has fostered an environment where technology companies feel free to make bolder and bolder moves against basic consumer presumptions. The FTC, afraid to put the brakes on "the engine of the New Economy", is afraid to step in, even when scams such as UCITA are propogated and computers get advertised at blatantly false prices.
Netpliance doesn't sell boxes, folks. They sell a damn cool service. For $99 down and $20 a month, you go from Zero to Net Connected. Obviously this requires hardware, which Netpliance was willing to provide at a loss. The same happens for Cable Modems and DSL, for that matter. That's what they wanted to do, that's what they're built to do, and that's what they would be doing, if the rest of the market--if the big boys at AOL/Compuserve, and Microsoft, and Prodigy, and everyone else--hadn't defined customer expectations as a computer at a couple hundred bucks as long as you got that net connection "you were going to get anyway" through them.
Once the market had been polluted by the big players, where do we get off raging against a little guy with interesting hardware who did nothing else but enter the market they created?
Yes, it's a scam. But with the ridiculous fear against doing anything about it in government, what is nothing less than bait-and-switch has become a standard for an entire market. In such an environment, who wouldn't expect Netpliance to package their service as a product? It's easier to sell, they didn't invent the scheme, and honestly it gets cheap computers into people's hands, which is a major goal for everyone.
Now, things went wrong for Netpliance, but that's because they went the extra mile and designed a genuinely interesting piece of hardware to accompany their service. To be honest, they should license the design to another company--VA? Point of Sale? Hello?--and let them deal with the hassles of the product market, while they sell their service for $99 and $20 a month. But the FTC will have to step in and enforce honesty in the market first.
Expect this to happen when high speed networking hits critical mass *or* when a downturn in the economy makes large numbers of people cancel their modem Internet service.
Yours Truly,
Dan Kaminsky
DoxPara Research
http://www.doxpara.com
It's still a Lousy way to treat customers (Score:1)
Just enough rope to shoot ourselves... (Score:2)
Thin clients have an interesting effect on Windows sales -- they potentially remove Microsoft from both the workstation and server market. After all, whenever anyone uses a thin client to access a network resource, they are largely unconcerned with where the data is coming from -- only that it's there (stability) and available (performance). Any time stability and performance are of greater importance than interoperability with Windows and ease of administration, Unix and Linux are more likely to be used as servers.
If we successfully drive these companies out of business so we can save a couple of hundred bucks on Intel hardware, we open a crack for Microsoft to get in and stay in, at the expense of the average user, and at the expense of *nix.
Skepticism is good, but... (Score:5)
As a counterpoint, I also would say that I don't think startups are in the same league. My bias is that I've worked for several, and understand that environment pretty well. I believe it's highly likely that Netpliance did not "give this guy a line", with the implication that they somehow mislead him about their true agenda or intent in order to generate positive press. I do think the author of the original article could have been a bit less star-struck and written a more balanced account, but I'm guessing that didn't happen because of inexperience about the functioning of startup businesses.
Here's what I'm guessing happened with Netpliance. I believe, as a whole (like many startup Internet companies) that it was formed by smart, well-meaning people who are passionate about a vision, which in addition to having some socially redeeming values (bringing the Internet to the masses) is potentially highly lucrative. I'm guessing that the demand for their appliances caught them completely by suprise, and likely posed a short-term, very serious threat to their financial viability as a business. This is something that, due to the way the investment community works, they would never admit to publicly, unless they *HAD* to. If they *HAD* to, SEC regulations would require them to distribute that information broadly and publicly. You can understand why they wouldn't want to.
Why would they have been in financial jeopardy? After the original
I don't think they made an unreasonable decision, given the circumstance. Being a "nice company" to a large community outside of your target market at the expense of the company's existance is just not an option. Their original misstep was to err on the side of being a nice company, and not lock people into a mandatory service agreement. Should they go out of business because they failed to forsee that the geek community would be so interested in their hardware? I don't think so.
Before you think I'm a total Netpliance apologist, understand that I was burned by this as well- I ordered a unit, and I had it canceled. My experience was that this was handled fairly smoothly, even if there wasn't a lot of communication about it. I understand that many people were handled less smoothly, and we can definitely fault Netpliance for not implementing what was a necessary decision in a way that was less disruptive. But accuse them of lieing to this reporter and "giving us the finger" is a bit much, even for a skeptic.
Re:Netpliance Propaganda (Score:2)
Pardon me for being blunt, but why would they want the "teeming masses of Open Source developers" as customers? They're not going to buy the ISP service, they're just going to buy the cheap hardware and avoid paying for the service. If everyone did that, netpliance would be out of business. So, people think that they're clever because they managed to get the device and not pay for the service -- great. Now they whine when netpliance starts realizing they can't keep letting people buy devices w/o service and makes it mandatory.
Re:Sorry, not buying it ... (Score:2)
Hrm. So, "good" greed means they'll sell you a device at a loss. They'll go out of business, just because YOU want a cheap computer from them, so damnit, they'd better give it to you.
Then again, maybe they SHOULD do that... after all, losing money seems to be the surest way to be a successful "dotcom" these days..
Re:Honorable Goal (Score:2)
It's not so noble to start up a business locking people in to a service contract. Maybe it's not ig-noble either, but it's not any less business than IBM, Apple or Microsoft. (Or AOL).
If they really wanted to "support the Open Source community" they could always offer a no-service hardware-only version, at a higher price-point. I suspect they've had a think about that, but they couldn't figure it to pay.
Re:It's still a Lousy way to treat customers (Score:2)
The moral of the story is: Circuit City will not, in all likelyhood, EVER call you to tell you that your machines are in. I'm amazed that in my case they had the "courtesy" to make what they thought was a preemptive service call.
As a side note, I personally feel that Kalin Harvey's article is right on the mark. While I refuse to become personally outraged by the behavior of many of Slashdot's denziens towards Netpliance (not to mention the unforgivable and completely unintelligent arrogance of many of the regulars on Ken Segler's iOpener BBS [kenseglerdesigns.com]), I firmly disagree with the thought that Netpliance is "screwing the hacker/open source community". They've got a specific business model (a very good one IMHO) and it specifically doesn't include providing the world's cheapest X terminals to self-righteous geeks. I've never seen a community more quick to cry "Fuck the bozos! Why isn't the Man doing something about this?!?" when a free lunch turns out to be less than the golden goose with the singing harp thrown in for good measure. The only faults I find with Netpliance's behavior are a lack of foresight ("Do not underestimate the power of the Dark Geek") and a willingness to act rashly out of corporate panic (epoxy? clipping IDE header pins? Retroactive service contracts? PLEASE.). However, many of Netpliance's critics suffer the same general failures.
I count myself lucky to have gotten an iOpener at all, and would gladly have tipped my hat in salute to Netpliance had they successfully prevented me from causing them to loose another ~$200.
Poor Babies (Score:1)
Yeah, there *are* so many of us that we would drag the company down financially, aren't there?
How many people are actually going to hack the hardware? Perhaps they should sell the 2.5 inch drives with the units to make up the cost.
I thought the concept was interesting, and that they would freak on a few hundred people actually hacking thier hardware that they would change the system to prevent it. How much did that cost??
get real, ala metallica (sux).
Yes, Kalin Harvey needs an economics class (Score:1)
Thank you, thank you, thank you, for saying that. You left out "self-appointed", but otherwise you are spot on! It is embarrassing to read articles like this one. Not only did the author display his (and the general geek audience's) cluelessness about econ, but then he decided to embrace the "let's be grownups" movement and dressed his piece in "suck to the suits" style, with the result that it begins to read like an ad. I don't want to attack apple pie or motherhood, but instead of "oh, how wonderful is Netpliance", isn't a more appropriate geek question something along the lines of, how can our mothers, who produced us, be so clueless about computers? :)
Please, just keep writing about how to take the covers off of boxes, or have intelligent econ geeks explain econ.
Re:The Honest Market (Score:3)
This is easily the most intelligent thing I've seen posted so far. If NPLI is supposed to be focusing so hard on delivering a service, they should outsource the hardware and OS development. Of course, the execs there realize this already! That is why they are so interested in open source.
Now if there were some kind of open hardware development, then maybe we could build a similar box.
But the best move in this regard would be for NPLI to go find some hardware manufacturer to build these i-openers so NPLI can focus on what it should be focusing on.
The side benefit of such a move is that we geeks could get our hands on such a box for a fair market price without jeopardizing NPLI's business.
---
After some thought... (Score:1)
Granted the Open Source community is hungry for their hardware, and from the article it seems that large institutions are hungry for the devices aswell for a variety of applications, Xterminals being the one mention in said article.
So we have two distinct markets that can be approached with two different products, one being the Subscription service, the second being the hardware. Currently they are taking a loss on the hardware inorder to sell the subscription service. Why on earth don't they restructure themselves so that they can sell the hardware to both markets and minimize the loss? It may fall into the boring catergory of innovative accounting but the gist is, if you lossing say 400$ per unit in one market and making 100$ per unit in another your total revenue increases and your total losses are decreased. Makes sense to me.
And in the long run the proliferation of such hardware would be a benefit to the company on the whole. It could spawn a new catergory of computers with Netapliance being at the forefront.
If they are only worried about their bottomline, then they should crunch the numbers. They are shooting themselves in the foot.
bpd
Morality of Profit? (Score:1)
There's nothing wrong with a business model based on a service contract. Moreover, there's absolutely nothing wrong a company attempting to make a profit. Obviously, that's what NetAppliance is doing -- and this article does a great job explaing what, up until now, has been a fairly confusing picture of their business model.
You're certainly entitled to your opinion of service contracts, but I'll say this: I'm bothered by the implication that "service contracts" are somehow "less moral" than, say, an outright purchase.
It seems that open-source zealots often want to quantify the morality of profit-making. If you make profit by method X it is somehow "less moral" than if you make profit by method Y. (This is, of course, assuming that both X and Y are legal means of making profit in the first place.)
I understand (or think I understand) the attitude of the faithful when it comes to open source, open access, and a close adherence (and understanding) to the bazaar model: that's fine. I understand that. I understand that these are cornerstones in the so-called movement.
But I've yet to see a lucid explanation of how the "morality" of different types of profit models plays into the acceptance of a product into open source channels and into the (so-called) movement. I suspect it has something to do with how the profit is made versus how the product is "consumed".
But to outright cast aspersions on a "service contract" model simply because it (for good or bad) locks a person into a monthly payment is, IMHO, absurd. So long as the contract is legal and clear -- and so long as both parties accept it -- then it would seem to me a valid (i.e. moral) way of making profit.
You seem to indicate that this is not so -- please explain.
chris
Re:Why do they care? (Score:1)
Re:Kalin Harvey needs an economics class (Score:1)
Another thing a lot of us assumed about the i-opener is that sales were not going too well and that the company really didn't have much going for it anyway. The reality is that they are having trouble keeping up with the demand for the devices from their core market. They have been experiencing a predictable network effect as granny gets on-line and then wants all of her friends to join her so she has more people to e-mail. If their massive customer service department and the stories I heard from random employees I grabbed (who had no idea who I was) are any indication, the i-opener is actually doing very, very well with its core market (due to SEC regulations, exact numbers were unavailable).
and another:
Netpliance never intended to focus on hardware. Hardware development is a relatively small part of the overall business. They have several times more employees working in software development, content delivery, interface design, and countless more working in customer service. Although they have a branded box that carries their services, the company is actually focused on providing the content and interface regardless of the device. They have already signed deals to have the i-opener software and content delivery deployed on set-top boxes developed by a major cable company, as well as R CA branded Internet devices; they are also looking to offer the i-opener service on other devices such as PDAs and screenphones.
The behavior of yourself and other slashdotters is like me asking MSFT to create a GeorgiaTech version of Windows 2000 simply because a few GeorgiaTech students wiill buy it. Now listen very carefully, if the return on investment is not large enough do not invest in the market
Selling the hardware and allowing it to be configurable by users would involve jacking up prices, more expensive tech support and a restructuring of their revenue projections simply to satisfy people who can simply buy an I-opener at $99 and pay $20 a month, then tinker away to their heart's content. After all $99 plus $20 a month would be the equivalent of paying a lump sum of $400 or $500 for it if they sold only hardware.
Re:Why do they care? (Score:1)
If all I do is run down to Circuit City and purchase one under the agreement AS present when this first started I've given hard-earned cash for a piece of gear. They setup the terms of purchase, I complied.
This sounds like a case for a first quarter law-student, i.e. obviously we've formed a contract by the exchange of goods that was complete. NetPliance trying to come back two weeks later and changing the rules of the deal, or crying foul don't hold water.
Re:Honorable Goal (Score:1)
Its a strange world we live in when companies actually reject customers who are Willing and Able to buy their product in the hundreds.
Maybe someone needs to find out who actually makes these. Somehow I doubt they'd object to selling them by the hundred....
Re:Morality of Profit? (Score:1)
Sorry maybe my post wasn't clear. I have nothing against service contract models.
My post was really just to say, let's not confuse "business (for a profit) as usual" with "a noble and illustrious goal".
Also, they made a buzz about supporting the open source community. As I said, they could give the hardware hackers what they wanted too, by providing the alternative option of a no-service hardware-only box. Obviously, not for the same price.
Market reality (Score:1)
They are not selling hardware, per se. The main piece makes it clear that the guy went there thinking that, and was educated a bit.
The software is a key element -- they are licencing it to other companies. IMO this is the main thing they are selling. They are mainly in the business of selling very easy to setup/use/maintain internet software. But they are also not just selling software.
They are also selling support -- handholding -- the ability to call them up when things go wrong, and have them fix it.
But in fact, what they are selling is a mix of all three of the elements above. Unlike AOL, they are targeting a fixed hardware bundle. I don't think I need to explain to geeks how much easier that makes things for them, in terms of writing the software and offering support. So, it makes these things cheaper.
Why sell a mix of things like this? Because what (most) people buy when they "buy a computer" is not the computer itself, or the software, or the support -- they are buying a service, a bundle of abilities that collectively make their life easier.
What geeks don't understand about computerish stuff, is that we don't see this market the same way as normal people do. We see the individual things in this market as having value intrinsic to themselves. So to us, something like the i-opener is cool -- it has value for us separate from what-it-does, but simply based on what-it-is. Yes, part of that is the fact that it is cheap, but part isn't.
Normal people don't think this way, about computers. They simply want a service at a price low enough that it makes sense. Netpliance thinks it has identified a way to provide a service -- a bundle of hardware, software, and support -- at the right price, so that they can make a mint. Maybe they are right. Maybe not. But either way, the idea that they would be interested in the desire of geeks for cool toys is silly. The market for providing cool geek toys is large, but already saturated with players.
Regarding Don's point the market is corrupt, that selling computers with rebates for ISP subscription is bait and switch: that is a very arrogant attitude. It assumes that the common person is unable to read, or understand, the fine print. Yes, I agree that it is annoying to have to read the fine print to find out the "real" price for a system. But I am a big boy now, and I can do so. The idea that I am somehow superior to some "common person" in this ability is offensive to me.
Re:Kalin Harvey needs an economics class (Score:1)
I disagree. There were several interesting bits of info IMHO. First, they are doing good business selling the iOpener in its planned role. Thus the hacker market isn't as attractive as it might otherwise be. Second, while the LCD price they get is good, supply is a real issue, so expanding the market for their machines is problematic compared to getting more $ per customer, by providing services after the sale. Third, they feel that the market for a low-end hacker machine is going to be satisfied by others soon.
If it weren't for a couple of these issues, it would make sense for Netpliance to sell a hacker's machine, with a higher base price and no service contract. This article explains why that doesn't appeal to the Netpliance guys.
QNX/Neutrino RTOS beats Linux (Score:1)
Its a corporation not a charity, you idiot (Score:1)
Re:It's still a Lousy way to treat customers (Score:2)
Re:Sorry, not buying it ... (Score:2)
So - there is the OTHER side of the story.
Say "Netpliance"-Do you think hardware or service? (Score:1)
I agree completely. So, why does Netpliance not sell $400 boxes for the more sane price of $400, contract-free and not filled with epoxy? Or even $500, with a tidy profit?
For the layfolk to whom these are originally intended to be sold, $99 and a service contract of X years would work fine.
Right now, with demand being what it is, I can understand their stance. When supply catches up (and it must, else this all becomes a non-issue), not selling more-expensive multi-use boxen is foolish and laughable.
There exists a prime market for small, low-cost, reliable computers. The I-Opener is solid state, with no moving parts (aside from the easily replaced keyboard).
At a factory near here, they once had text-based terminals running over serial lines to (presumably) some sort of UNIX host, which were scattered about the plant, even on the production floor, for data entry and reporting and whatever else they needed them to do. Recently, the serial lines were replaced with Cat5, and the terminals turned into tiny little WinCE boxes with either bulky CRT monitors or hideously expensive flat panels. The requisite wire-mess doubled from three (keyboard, power, data) to six (keyboard, mouse, video, two for power, and ethernet), bringing with it all the joy of flakiness as the cabling degrades over time.
Given the specific nature of the business (baking cookies), the software is undoubtedly custom, and thus could be built to run on any of the multitudes of real multiuser operating systems existing today, perhaps even on the legacy hardware they already had. X11 would flow over the network instead of whatever bit of proprietarity the WinCE things talk. And at the end of the wire, would be an I-Opener, booting some free (or low-cost), stable operating system (or just a light-weight X server) from flash. Money would be saved, things would work in a stable fashion, and there would be much rejoicing.
I don't see this falling to the same pitfalls as other so-called thin-clients due to the following differences that I percieve. Firstly, it can be inexpensive (traditional thin clients didn't really help out the initital investment cost). It is flexibile (flash). It can run standards-based protocols, such that The Guru In The Back can run the same applications in the same fashion on a desktop PC. Applications run on a central host, rather than at the individual workstations. And finally, it's *plenty* fast enough to display all manner of business graphics, and likely will continue to be until the next big paradigm shift in display technology.
The author of the article to which we're all replying states that if Netpliance were to go this route, they would be eaten by a large company with razor-thin profit margins. However, given the demand for these devices, Netpliance becoming a serious player themselves is almost inevitable.
So, perhaps if they're as smart as they think they are, they should look at a bit of diversification. Adding 10/100 ethernet, socketing the flash, and swapping pins on the IDE header shouldn't take too much time or money to implement, and the rest of the box is already built. They may consider themselves to be a service-oriented company, but the name Netpliance speaks otherwise.
not enough LCDs (Score:1)
customers in the hundreds? (Score:1)
Its a strange world we live in when companies actually reject customers who are Willing and Able to buy their product in the hundreds.
I'm pretty sure this statement demonstrates how out-of-touch with real life markets and companies many members of the slashdot community are. One cannot sell a product in quantities measured in hundreds and expect to make a living, much less a profit.
What has Netpliance done? (Score:2)
When you honestly look at the big picture, you have a company who's idea was to bring the Internet affordably to many people. In the process they stumbled upon a very useful product beyond their original vision. My question is this: If so many people want to hack these little boxes to do something they're not really designed to do, they why not start your own business? Develop your own little thin client and run Linux on it and sell it.
Now I am not saying go out and rip off the i-Opener design or anything, but if this is such a popular device, why doesn't someone else come along with their own and market it to corporations and schools?
I'm not saying that Netpliance isn't nuts for not jumping on this chance to fill a clear market void, but if it isn't in their mission statement, then why fault them? They are pursuing the audience they set out to, and they're well within their rights not to drop one market for another. I applaud Netpliance for not seizing a quick buck but standing by their business model.
Re:Sorry, not buying it ... (Score:1)
-Matt
Re:Kalin Harvey needs an economics class (Score:1)
Actually, the long term contract profits are probably larger than the profit to be made from selling Linux X terminals. Since their LCD supply is currently constrained, they will sell to the most immediately profitable market. Netpliance probably is not obsessed with the service market -- they are just going where the money is right now.
Later on, as the high-profit market saturates and the supply isn't as tight, it'll make sense to start selling to the smaller margin markets (geeks, corporate thin clients, and so forth).
The LCD panel is what we really want (Score:1)
The cheap LCD panel is the only real "value" to the hacker in all this. The rest of the parts for a cheap "thin client" is all off the shelf stuff readily available.
The cheapest LCD screens on the market are $500 or more because the lowest models are 14" active matrix displays sold to people who will be sitting in front of them hours on end.
No one seems to see a market for the lower quality ones for use in cool geeky toys. Who do we convince otherwise now that NetAppliance has failed to step up to the plate?
Why aren't VA Linux or Penguin Computing filling this niche?
Re:Sorry, not buying it ... (Score:2)
What Netpliance is doing is drooling over the much higher margins they project from a captive audience on their service (this device can't be used with anyone else's service), and don't want to even risk their surplus of devices in case they get a sudden burst of new customers.
The bottom line is they have the devices, they could sell them at a profit right now. They surely have a surplus of the devices, they still won't let them go. But they will immediately stop distribution (and sales) in order to quash what could've been a major business oppurtunity.
This is not a company that is for the consumer, they said it before, they sell a service. It's not internet service as we know it, it's propritery service, like AOL. They just want a piece of the control pie that AOL is enjoying alone. They want that captive audience.
Netpliance needs an honest business model (Score:2)
Netpliance did not choose this model. They chose to simplify the up front purchase without requiring agreement to a contract. They didn't want to scare away customers who aren't sure if they really want to make this kind of committment. They chose to sell through outlets (i.e. Circuit City) that were not able to handle prcessing a contract.
Companies should expect that their customers will act in their economic self-interest. If you need to compel behavior to protect your business model, you need to put it in a contract and not resort to shady tactics like charging people for services that they did not authorize or retroactively changing your terms of service. Netpliance can't have it both ways: wanting not to scare away people who are afraid of a committment and enforcing a committment that people have not made.
Their business model is broken as designed. It is based on a fundamental contempt for their customer. They do not deserve our resepect. If they need to compel behavior after the sale, they need to execute a properly drafted contract.
Anomalous: inconsistent with or deviating from what is usual, normal, or expected
Netpliance misses its own point (Score:1)
These guys made a huge PR mistake and are still trying to cover their asses - and not doing a good job of it. If they really care about the Open Source community like they say, why did they start clipping pins, pouring epoxy all over the board and changing the root passwords?
Netpliance is a cowardly company and they don't deserve to survive because of it. The market will take care of them shortly.
Re:The Honest Market (Score:1)
Problem is, nobody in their right mind is interested in making hardware. Look at Apple. NeXT. Be. To a lesser extent, many of the top- and second-tier PC makers. All companies who overextended themselves making boxes, only to find themselves hopelessly under- or overstocked. Either way, they lose money. Worse, they'd be stuck building an unproven product with a bad track record for a company with a bad reputation. You don't need an MBA to realize your upside potential sucks.
If you want i-opener-like hardware at cost, Merinta will sell you the iBrow [merinta.com], the unit Virgin Connect is using, without the contract. Just don't hold your breath for Netpliance to do the right thing.
Re:Kalin Harvey doesn't think he needs an economic (Score:1)
And, the author of the original critique was pointing out that there is a commonality among the "emissaries" in the tone of the pieces they/you write wherein you endorse i-opener or whoever: guess what? to an MBA, the difference between i-opener, Apple, Palm, AOL, Be and whoever is, some have selected hashing, some use binary search, and others use btrees. That's all. There's nothing particularly original or clueful about any of their strategies. The market conditions differ, and the execution varies, ... and it's even interesting to learn when you don't know it. But it just sounds dumb for you to endorse them.
(and as an aside quibble: "familiarity breeds contempt" does not refer to meeting people, but to living in close quarters with them.)
Anyway, to the folks in this forum who say i-opener is a hardware company so they should sell hardware... is your cable company a hardware company because they give you a cable box? You have to think about the staff required to interface with customers and the money invested in the various infrastructures you need to support your sales and support model. Hardware, software, content, services... these are completely different things which is why we see different companies doing them, and having different cultures. With the current i-opener model, when they deliver a box to a grandmother, they get to go to wall street and say, "it cost us X to deliver this, but we expect to see Y+Y+Y+... coming in monthly". That "+Y+..." is the key to the value of this customer. If they start selling hardware alone, it'll be "we spent X to get Z". Wall Street prefers recurring revenue because as you expend more effort to get more customers, the stream of cash coming in GROWS. With non-recurring revenue, you need to keep working for each new bit of revenue. It's hard to grow sales that way.
Kalin Harvey doesn't think he needs an econ class (Score:1)
here it is for all you 1+ers:
This thread started with a pretty insightful post I thought.
I can agree with you that many of the points I made about the economic viability of Netpliance selling hacker boxes seem pretty obvious. But at the same time, this was something that wasn't immediatley grasped by a lot of people out there. Just read the feedback [slashdot.org] that I got from slashdotters on this issue overwhelmingly asking them to sell hardware to hackers at a reasonable price as a sound business move.
I thought it was important to speak to that response since it was obviously indicative of how a lot of people felt. Looking back, I can't say that I regret writing the article the way I did.
Spending time explaining what a majority of people wanted explained may have made me look amatuerish in some ways, but I thought it was important to do considering the tone of the debate up till now. I personally agree with most of what you said above, and the article was partly an attempt to help make these economic concepts easier to understand by the masses of open source people out there, because /yes/, that is something we need.
Thanks,
Kalin
PS. I certainly don't purport to be a spokesperson, or "emmisary", for anything but my own perspective.
Re:The LCD panel is what we really want (Score:2)
Re:What has Netpliance done? (Score:2)
Re:Netpliance Propaganda (Score:1)
but I agree with his comments. Where Netpliance made their mistake was twofold:
They didn't *enforce* their business model, right from in front, and
when that proved to be a mistake, they didn't step up to the plate and take their lumps on what had already been ordered, they *retroactively* attempted to force contracts on people *whose transactions had already been completed*.
If their management, and by extension, their board, can't make the stockholders understand that It Would Be A Bad Thing to piss off that group of customers, then perhaps they deserve what they've gotten.
They will *not* be the only people in this market... and who tells Aunt Molly what to buy?
But I dunno, maybe it's just me.
So many things are just me [greenspun.com].
Cheers,
-- jra
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