(fax) "Doing nothing?"

[Dave Gilliss]

I was in "the industry" also and I'm guessing that you are down in the
trenches (in the server room) and not part of the accounting/budgeting
process. When I got promoted and left the server room I was rudely awaken by
the cost of all the stuff that I was playing with down there. Just our
licensing costs each year were over $3M (for MS, Oracle, Symantec, etc). I
won't even get into the service contracts on our Dell clusters and Sun
servers, tape libraries, and salaries. I know you said use linux for reduced
costs, but someone still has to support this and on a project this scale
you're going to have to have a lot of hardware and utility redundancy,
massive data storage, stable power, geographically distributed datacenters,
and backups, etc.  this ain't no basement project. If it was there would be
a lot more serious competition to itunes store, but right now there isn't.

Also, you may want to check out Steve Job's salary. I know that since he
returned he hasn't gotten a salary from apple, zero, nadda, zip. He may get
a bonus (but I don't think he took it) but even if he did, he's earned it.
He's got enough money from apple's glory days and from pixar. he came back
strictly for pride and to spread his vision. Say what you will the guy has
incredible foresight and he's always been ahead of the game, some times too
far ahead (yep, I've still got my newton!).

 

Dave-G
(who is happily out of "the industry" now)

PS, oddly enough, the total cost of your estimate is exactly what I paid for
a Sun Timberwolf backup tape library with all the trimmings.

On 3/2/06 11:36 PM, "faxlist-request at 2350.org" <faxlist-request at 2350.org>
wrote:

> Message: 2
> Date: Thu, 2 Mar 2006 13:13:51 -0600 (CST)
> From: Trevor Cordes <trevor at tecnopolis.ca>
> Subject: Re: (fax) CDS ARE DEAD, Steve Jobs and Pete Namlook
> To: Fax List <faxlist at 2350.org>
> Message-ID: <200603021913.k22JDpnY010644 at pog.tecnopolis.ca>
> Content-Type: TEXT/plain; charset=us-ascii
> 
> On  2 Mar, Warren Lapham wrote:
>> "Doing nothing?" Do you have data to back up this assertion, or is
>> this more anti-Jobs vitriol?  Servers and related infrastructure
>> generally have a nonzero cost.  The same is true for the salaries of
>> development teams and content management teams.
> 
> The hardware and software costs are negligible, believe me.  I could
> lock myself in a room for 2 months and write the iTunes program.  I
> could buy an off-the-shelf Beowulf server cluster for $100-$300k.  If
> you use linux and manage things well, you can scale to huge proportions
> at miniscule incremental costs.  Most people don't realize how cheap it
> is to do this stuff; I do because I'm in the industry.
> 
> Even if you multiply my estimates by 10, you only have to look at the
> stat that they've sold 1 billion songs at $1 each to see that even $3M
> in "overhead" is waaaay less than 25% of $1000M.  Apple did NOT spend
> $250M on overhead, trust me, unless the "overhead" is Jobs' salary.
> (Remember, in corporate accounting, Jobs' salary would be part of
> "overhead" and NOT "profit" as you would guess.)
> 
> I just think people should be informed of what gouging is actually going
> on.  If they then decide that they don't care, then let them do what
> they want, but don't call it "overhead" and make believe that it's not
> mostly extra profit.