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- Newsgroups: comp.sys.dec
- Path: sparky!uunet!zaphod.mps.ohio-state.edu!wupost!darwin.sura.net!haven.umd.edu!decuac!hussar.dco.dec.com!mjr
- From: mjr@hussar.dco.dec.com (Marcus J. Ranum AXP)
- Subject: Re: DEC Support?
- Message-ID: <1992Nov19.151137.22365@decuac.dec.com>
- Sender: news@decuac.dec.com (USENET News System)
- Nntp-Posting-Host: hussar.dco.dec.com
- Organization: Digital Equipment Corporation, Washington ULTRIX Resource Center
- References: <1992Nov18.054500.2450@csrd.uiuc.edu> <1992Nov19.121523.8216@brt.deakin.edu.au> <DGRAY.92Nov18233610@menudo.uh.edu>
- Date: Thu, 19 Nov 1992 15:11:37 GMT
- Lines: 48
-
- > More "outrageous prices" --- care to justify these assertions?
- >
- >Okay, How many manufacturers are getting $10,000 for a 1.3 gig drive?
- >How about $2000 for a single hard drive controller? $8,000 for a 351
- >meg drive? (I would point out that an 8 meg RAM card costs $8,000,
- >but I understand SGI has even higher prices than that.) These are
- >what I call outrageous prices.
-
- [advance warning: possible tongue-in-cheek posting]
-
- Let's set up a hypothetical situation, and see how it fits. ;)
- I have no idea if this is correct, but from where I sit this seems to
- be what happens all the time...
-
- Suppose you have a vendor and a 3rd party who both sell a 1.3Gb drive
- for their computer. The vendor sells it for $10,000 and the 3rd party
- for $3,000. Outrageous. Then we find out that the vendor has actually
- designed and built that drive from the ground up, tested and qualified
- it, documented it, laid in spare logic boards for it, had to set up a
- whole field service organization that understands that drive, etc. The
- 3rd party, who are much smarter, buy the drives en masse and put them
- in a customized box with a power supply purchased en masse. Let's just
- suppose that the 3rd party pays $500 for the bare drive and logic board
- and cabinet. Adding assembly, cost of sale, staffing and stocking, etc,
- and they sell the drive for $3000 and pocket $500/drive. The vendor,
- after building the drive, logic, paying the engineers, etc, etc, etc,
- etc until they are blue in the face, finally slashes the price and
- manages to sell the 1.3Gb drive for ONLY $10,000 and pockets $500/drive.
-
- Digital still has (but it's changing *FAST*) a tendency to
- want to build everything from the ground up, rather than buying it
- off the shelf, stuffing it into a box, and putting a label on it.
- This is apparently not a very effective approach these days, since
- it increases the time to market, increases costs, and decreases
- revenues. I suspect a hard dose of reality is effecting a change.
- The fact that Digital has been getting increasingly aggressive with
- keeping prices down is a good sign to me - look at the DEC PCs -
- they are almost in the ballpark of taiwan, inc. PCs. Nobody, even
- IBM is getting away with selling overpriced stuff "hand built from
- the ground up by craftsmen in our plant in the black forest, each
- piece lovingly polished by a bevy of maidens before wrapped in
- silk and shipped by cruise ship to your door" anymore.
-
- In short, you don't need to flame DEC for what you perceive
- as high prices. Buying stuff from a 3rd party hurts a lot more than
- anything you can post to USENET, and gets noticed more.
-
- mjr.
-