home *** CD-ROM | disk | FTP | other *** search
- Path: sparky!uunet!spool.mu.edu!olivea!apple!applelink.apple.com
- From: ALGER@AppleLink.Apple.COM (Alger, Jeff,VCA)
- Newsgroups: comp.sys.mac.oop.macapp3
- Subject: Re2: Takeover
- Message-ID: <725581286.1283715@AppleLink.Apple.COM>
- Date: 28 Dec 92 22:11:00 GMT
- Sender: daemon@Apple.COM
- Organization: AppleLink Gateway
- Lines: 57
-
- MacAppers,
-
- I don't have any particular interest in taking over MacApp, but it would be
- nice to see _someone_ do it. So, in the interest of moving things off the
- moral plane and on to business issues, let's put some real numbers on this
- "takeover" business.
-
- Market size: No matter how you slice it there are only 2000 to 5000 MacApp
- programmers around. Let's use 3000 for a working number.
-
- Fixed costs (read: labor): An organization capable of supporting MacApp
- properly would have to include at a bare minimum two programmers (one only and
- you are at the whim of sickness, vacation, and the attractions of greener
- pastures elsewhere), one documentation person, one QA person (two would be
- better) and at least one full-time manager (better two, one technical and one
- business). And this is bare bones; it assumes, among other things, that tech
- support is provided by the programmers, QA, and documentation folks; that
- secretarial & etc. are part of some existing business structure; and that
- training is provided by third parties. That's five to seven full-time people,
- or an annual budget on the order of a million dollars +/-$200K, not including
- direct production and distribution costs.
-
- Revenues: As a working number, it would take revenues of about $1.5 million
- annually to cover fixed and variable costs, risks, and make a profit.
-
- Pricing: Let's assume that these costs have to be born by the MacApp user
- community. If 3000 subscribers pony up to the table, that's about $500
- annually. Not likely. If 1000 subscribers sign up, that's about $1500
- annually. If 500 subscribers, $3000 each, and so on. The model isn't strictly
- linear, but that's not a bad approximation given that most of the costs are
- fixed.
-
- So, here's my question. Just how much is MacApp support worth? Would you pay
- $500? $1500? $3000? $10,000? What would you expect in return, just
- maintaining the status quo or ongoing evolution to keep pace with the Toolbox
- and OS? Immediate answers to problems or 24 hour email support? Consulting
- and training as part of the bundle? How long would you expect MacApp to remain
- viable (i.e., how long would the business last)? No one of sound mind would
- start up a venture of this size unless it were going to be a multi-year,
- ongoing business with growth potential, yet Apple itself is publicly committed
- to making MacApp obsolete. Would you invest in such a venture?
-
- My suspicion is that a survey that posed these questions would come up with a
- viable - that is, profitable - business model, though that is just a hunch.
- But this begs the ultimate question: if MacApp can be made profitable, why
- shouldn't Apple just overhaul its pricing and do this themselves?!
-
- Finally, seconding Robert Lenoil's comments, I can't see how this is within the
- scope of what MADA can do. This is several times the entire annual budget of
- MADA. MADA can play a role in keeping marketing and distributions costs down,
- but even that would have to be done in an arms-length way, in particular no
- deal could be cut that isn't also available to other vendors.
-
- Regards,
- Jeff Alger
- SBM International
-
-