OS costs

[Dick Dunn]

I'd taken Warren Calhoun's article about good prices as a jumping-off
point; I started with a statement about not disregarding the R&D costs. 
In response, he said:

> As I should have known, what I deemed a casual remark managed to strike a
> nerve.  This was really not my intent...

Perhaps I should have started a completely separate article.  It's not that
he struck a nerve so much as he gave a good point to start thinking/talking
about OS costs in our little world here (386, UNIX) and try to make some
sense of them.

>...My comment about discounting the
> R&D costs was not meant the way it was apparently interpreted.  What I did
> mean was that I am not qualified to judge the R&D costs...

Sometimes I wonder if the vendors are either!  It's a hard problem...not so
much that it's hard to judge the R&D costs _per_se_ as that it's hard to
see just how they should figure into the product cost.  (The suits under-
stand this better than I do, but they still have some unpleasant guesswork
to do.)

> The point that I was trying to make is that whatever SCO gets, it must be
> some amount that they figure will enable them to recoup their costs over the
> life of the product and still make a profit...

Perhaps, but not necessarily.  I doubt that they intend to take a big loss
on it (!) but there is such a thing as taking a slight loss to get yourself
established in a market.  (I have *absolutely no* idea whether this is the
case.  I'm just rambling about possibilities.)  Also, the question of
whether they'll recoup the R&D depends on how many they sell, of course,
and that may not be easy to guess.  In a rapidly-changing market, fore-
casting even with the best of information is risky.
-- 
Dick Dunn     rcd at ico.isc.com -or- ico!rcd       Boulder, CO   (303)449-2870
   ...I'm not cynical - just experienced.