[asterisk-biz] PBX Functionality for Less than the Price of a KeySystem (3Com Asterisk IP Telephony Appliance)

[Alex Balashov]

Alex Balashov wrote:

> The price can float more freely,
 > far less anchored to the underlying production costs.

To expand on this a little bit:

Say you want to be a wheat farmer.  Wheat doesn't have a lot of 
differentiation points that have a grandiose impact on price.  Sure, 
there are different types of wheat, grown under different conditions, 
and so on, but as much as they're different, they are also, in very 
significant ways, the same -- it's still wheat.  Wheat is wheat.

The agricultural processes involved in producing wheat are well-known 
and easily discoverable.  There are abundant quantities of wheat 
ubiquitously consumed across a broad swath of economic sectors and 
market segments, at all levels of income and so on.  So, the real 
question in going into wheat production is simply whether you want to do 
it -- that is, whether you want to and are able to make the investments 
in capital machinery, land, seed, and so on, and whether you can make it 
scale in a way that is competitive and make it efficient enough to 
compete with modern, high-volume agro-industrial conglomerates.

Aside from that, though, it's not really hard to figure out what the 
machinery costs, what the land costs, what the seed costs, and what kind 
of pricing your competitors are getting from this source, that source, 
to make this type of wheat, that type of wheat, and the techniques they 
use to get this yield and that yield and sell it here or sell it there, 
and so on.

That is the main reason why it is structurally a commodity, aside from 
its ubiquity.  This dynamic results in a very visible cost structure 
that creates aggressive competition almost exclusively focused on price.
As said before, wheat is wheat.  The way that you innovate your way into 
success as a wheat-grower is by tweaking various parts of the process on 
an economic level;  increasing efficiency, finding ways to squeeze down 
the prices of your inputs, and so on.  In marketing wheat, you can't 
really tack a lot of "value-added" characteristics onto it stemming from 
some sort of inherent opacity.  It's wheat.

That's kind of how it is with PC hardware, although obviously, not 
immensely so.

Proprietary communications systems are not like that at all, and have 
not ever been historically.  The engineering is relatively opaque and 
secretive, as is the underlying cost structure.  Furthermore, PBX 
systems have always been a business-focused product whose value lies 
almost exclusively in its being a capital good.  PC hardware is a 
mass-market product for all sorts of consumers, and attempts to mark it 
up in business target markets are predicated on additional value-added 
characteristics (support, service, perception of higher quality, etc.).
Otherwise, they're still anchored to that underlying transparency of 
cost structure.

-- Alex


-- 
Alex Balashov
Evariste Systems
Web    : http://www.evaristesys.com/
Tel    : (+1) (678) 954-0670
Direct : (+1) (678) 954-0671
Mobile : (+1) (706) 338-8599