[Asterisk-Users] My contribution to the issue of code- reversal

[Andrew Kohlsmith]

On Monday 10 October 2005 08:12, Federico Alves wrote:
> reverse code and it surely is a legitimate operation. Open source is far
> more convenient, but how do we charge for the product? The business model
> is not there: the more popular the product is, the more remote the
> possibility of the creator making any money from it. Take Digium. The more
> experts on Asterisk pop-up, the less demand is for Digium services. In

This is *precisely* why I believe that Digium's current model is terribly 
wrong.  They are competing with the very people that make Digium money.  

In my humble opinion, I believe that Digium should not offer support to end 
users.  I believe that Digium should not offer hardware sales to end users.  
You simply cannot have distribution and sell direct -- it does NOT work and 
you only end up alienating your distributors, the very people who find your 
customers in the first place.

Think about it: How many times do you think someone is going to point a 
potential customer to you if you just turn around and sell for the same price 
they sell at or lower?  Where's their incentive?

Distribution (in my opinion, again) is a manufacturer's best friend.  You can 
have a thousand distributors scattered around the world, digging out 
customers in every kind of niche imaginable.  The distributors and resellers 
know their market segments and have the relationships with the end users 
already. Distributors already have the trust of the end users, something 
Digium will find much harder to earn.

Again, think about it: If a guy you've been dealing with for 5 years says that 
this new piece of equipment will do what you want, do you find it easier to 
believe him than if you just found someone on the internet claiming the same 
thing?  What about if you did a little research and found that a full 50% of 
the reviews on this piece of equipment said it was marginal or hard to get 
working?  Would you try it on your own, or would you prefer if that guy you 
know said that he himself has gotten it to work and can help you with yours?

If Digium were to try and match this level of interaction they would have to 
have thousands of salespeople around the world drumming up business and 
trying to cultivate relationships with all the onesie-twosie buyers out there 
because let's face it, that's where the bulk of the sales will be.  Finding 
the Nufones of the world, the companies who know what they're doing and buy a 
LOT of equipment from you aren't exactly commonplace.  Let the distributors 
and reslellers work their own existing markets and business relationships.  
Give them the volume discounts and hell, maybe even offer them a few points 
more if they agree to stock $x of your equipment at all times.  YOUR 
infrastructure costs drop, YOUR support costs drop and your sales INCREASE.

As someone who's been working for an OEM for the last decade and has seen both 
sides of this coin, it's a no-brainer.

How about the consultant side of things?  How do you make your money when you 
are trying to cultivate and enitre business subculture around your product?  
Through licensing and support of the distribution and consultants.  You 
provide tier-1 support and training materials to registered consultants 
around the globe.  Perhaps a modest yearly license in exchange for a "Digium 
Certified Asterisk Professional" -- make the damn DCAP *MEAN* something 
instead of the meaningless acronym most of the people feel it is today!  
Don't just give a more-or-less textbook test and say "hey you're a DCAP now!"  
Make it mean something.  Give a REAL certificate, maybe those embossed gold 
stars with the year in them -- something physical, something they can hang 
with pride and show potential clients.  YES it costs money to do that, but 
you're trying to MAKE money with this!  Want ABE?  Get it through a licensed 
Digium reseller.  Need ABE support?  Again, here's a list of certified ABE 
consultants.  Point them offsite to the wiki for a list of other consultants 
and IRC and the mailing lists for "self-serve" support.  It takes a little 
bit of infrastructure, sure, but again it's all about presentation.

You simply don't sell to end users on a web store if you've got distribution.  
All you end up doing is stabbing these people in the back, the very people 
who are getting you these customers in the first place!  You either have 
distribution and you work with them and cultivate business relationships with 
them, or you sell direct and pay the price in terms of a) not having the 
market penetration you want or b) have an insane number of sales employees to 
keep track of and trained in order to achieve the desired market penetration.  
You don't do both.

Similarly, you simply do not offer end-user support if you're trying to 
cultivate consultants.  You either create the infrastructure for the 
consultants to make their living supporting your products (knowlegebase, 
registered support network, "intranet", certification) or you support your 
product on your own and spend the money on increased customer service staff 
and overhead that way.  There are ways of doing both here (expensive support 
to end-users, hardware-only support within the warranty period, etc.) but 
it's trickier.

Wow.  That's a lot of text, and it's all just subjective opinion.  As I said 
though, I've been in this type of business (OEM) for the last ten years or so 
and I've seen manufacturers double-cross their distribution just to make the 
sale.  Nine times out of ten, they don't get another opportunity from the 
same distributor.  Similarly, I've seen companies "take" support 
opportunities away from consultants.  Sometimes it's been ok because the 
consultant was inept or was way over his head, but sometimes the manufacturer 
simply undercut the consultant, and the consultant recommended other products 
the next time around.  It's a tricky game.

-A.