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Re: Pay for linux support (was - Re: iix and the rest og the world...)




On Tue, 2 Jan 2001, Eli Marmor wrote:

> Yes. The exact number in the original research was $35 (Average costs
> of "kria" by phone. What is the exact translation for "kria"?), but
> considering the inflation, it must be at least $40 today (and even $50
> if you count the extra inflation in the costs of a technical manpower,
> caused by the prosprity in the hi-tech and start-ups).

actually, these "cost models" have one major flow into them - if you'll
sum up all the expenses assumed for these calls based on such numbers,
and combine them with "assumed" expenses for all other activities of a
company (secretaries, system/network administration, accounting, etc)
you'll often come up with a figure which is much much higher then the
total outcome of the company. this is because these figures often neglect
to account for 'amortised' costs, resulting (among other things) from
people doing more then a single task at their job.

another important issue is the 'per call' price quote. the fact is that
not all users call support, but there are people that go to a comapny only
cause they have suport, even if they never use it. this is mostly true for
commercial companies. thus, a 'per paying user' price quote count would be
probably more useful.

another issue (hidden) in these figures is a set of assumptions, such as:
the average ammount of time spent by various employess on a call, the
salaries they get, the price of software/hardware used for running the
support service (and if that same hardware/software is also used to run
other parts of the service - i'm not sure how that's taken into account).
these parameters vary between companies, and thus stating "a price per
support call" is correct mostly for the specific company for which it was
calculated. remember that even a difference of 1$ or 2$ "per call" could
mean a lot to the profit margin of the company (i.e. if income generated
due to a support call is 50$ and cost is 40$, then reducing the cost by 2$
raises the _profit_ (50-40) by 20 percent(!).

> Actually, I don't have any idea how companies like Netvision can afford
> so generous support deals.

it's not 'generous'. its due to the way that the ISP market in israel
evolved. the cost of support is subsidised by other services handled by
the companies.

> If you'll ask companies like LinuxCare or RH
> for a support package for your company, you may get in return a tens
> thousands Dollars contract.

this is because giving support is the major activity of these companies.
they also give support that normally requires a much more technicaly
competent support personel (i.e. experienced system administrators, rather
then 1st/2nd year students, working on a per-hour fee, which is the
_majority_ of employees that work at dial-up technical support).

what you're doing here is comparing apples and oranges (or rather,
diamonds and rocks).

not that i'm saying that netvision is a profitable company - like all ISPs
in israel - it is not. read the papers a bit to get proper ammounts. just
some figures taken from 'haaretz' - internet gold has lost 54 million NIS
in the 1st 3 quarters of year 2000, which was about 1/4 of their income
at that time. the only reason that internet gold can afford that, is due
to their IPO (so the owners of the company might have returned their
investment already - only the people who bought their shares lost money so
far) - but that pile of money is burning out now...

netvision lost about 7 million dollars (i.e. around 30 million NIS?) at
the same period. btw, as far as i know, netvision did  have a profit in
one year of their operation (i think it was either 1998
or 1999), and that not due to "ISP" services, but most likely due to
"Value added" services (i.e. system management services, firewall
software reselling, etc), but then the share holders decided they need to
have more  users, because internet gold has bit them in market share (and
in losses too), yet went out pubic, while netvision's IPO was not
carrying along well, so they "drove" out their CEO (which thought profits
are more important then market share), and their plan indeed succeeded -
look at their ammount of losses :) . naturally, they seem to have changed
their mind now that everyone is thinking about profits again, and are
looking for a way to sell the company.

i am not aware of exact figures for bezek ben-leumi, and since they are
not a public company they are not obliged to give full reports to the
stock market, but their losses on internet services are most likely far
smaller then their losses over international phone call services, so it
doesn't really matter how much they loose as an ISP (and as partial owners
of walla).

even if you go to the USA, i think that the only profitable ISP there is
AOL (and they have large profits). most ISPs in the USA also loose money,
at at most are on a "break-even" situation, wondering how the hell they
will return the original investment(s).

--
guy

"For world domination - press 1,
 or dial 0, and please hold, for the creator." -- nob o. dy


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