Topic: Sell ready configured e-smith boxes

[Tina]

Hi all,
i work at a small ISP that supports some small-bussiness companies. Now my idea is to sell them e-smith servers instead of NT-servers.
my questions is if it´s allowed to download the e-smith iso, install it on the server and sell it, i mean only sell the hardware with the software.
is it allowed to advertise on my website with selling preconfigured e-smith servers or have i to buy a license from e-smith?
please don´t understand me wrong, i don´t want make money with others hard work, but it would be very fine to sell everybody who needs a small server a e-smith box instead of an nt box.

thanks for your help
tina

[gollem]

I think it's ok, not sure though. A subscription isn't very expensive so maybe you could bundle it with the hardware, looks good on the specs too: "Unlimited support".
Compared to a server version of NT it's very cheap.

[Rob Hillis]

Tina wrote:

> Hi all,
> i work at a small ISP that supports some small-bussiness
> companies. Now my idea is to sell them e-smith servers
> instead of NT-servers.

You're not the only one to have the same idea...  I do the same thing, primarily for home customers who want to share a DSL connection.

> my questions is if it´s allowed to download the e-smith iso,
> install it on the server and sell it, i mean only sell the
> hardware with the software.
> is it allowed to advertise on my website with selling
> preconfigured e-smith servers or have i to buy a license from
> e-smith?

The way I understand the GPL is that you are quite entitled to sell a server with e-smith preinstalled, however you and your customer will get *NO* support (other than through these lists) for the software.

If you choose to buy a license from e-smith, then your customer will have the same access to support services through e-smith that everyone else does.

It may be worthwhile looking at becoming a preferred partner through e-smith.  The only reason I haven't done so is that I've only sold two servers (both *very* used machines) and don't anticipate selling more than two or three a year.

> please don´t understand me wrong, i don´t want make money
> with others hard work, but it would be very fine to sell
> everybody who needs a small server a e-smith box instead of
> an nt box.

Absolutely.  It's a far better package than NT/2000 SBS - the hardware requirements are laughable compared to SBS, and installation is both easy and *VERY* quick.

You may want to look at offering two options - fully supported by e-smith, or unsupported.  Most corporate people would want the backup there, even if they never need it.

[Dan Brown]

Because the e-smith software is all released under the GPL, it's perfectly legal to distribute it all you want, whether or not you've paid e-smith.  You won't, of course, be entitled to support from e-smith if you don't pay them.

The only potential snag is your intent to advertise that you're selling e-smith systems.  I know that e-smith holds a trademark on the name, and I really don't know much about trademark law to say whether or how that would restrict you.

[Graeme Robinson]

I don't quite 'get' how the E-Smith support mechanism works either so I'm glad someone raised it here.  

I think I understand how it works but I can't quite figure how  I as a system integrator am going to effectively sell the supported software contract vs getting the software for nothing.  The client still has to pay for my time whether they buy the support contract or not, and the updates are still available whether one purchases the software contract or not.  The reality is that I am the person the client turns to when they have a problem and they will have to pay for my time regardless.  And if I become a Partner, then I personally will have access to the E-smith support won't I?

The way it works with M$ products is that people pay for the shrinkwrap software and rely on the expertise of the installer for support turning to MS helpdesk only in dire need.  In the 5 years I've been supporting Microsoft products I have never contacted MS for additional support (their helpdesk pricing structure seems designed to have this effect anyway).  

Most clients looking at the E-Smith alternatives will say, well let's not buy the support unless we need it at which point we can get it, which seems a reasonable option open to them.

But if I've never needed to use MS helpdesk it seems far less likely that I'll need the E-Smith equivalent when it's such a superior product and based on open source moreover. And anyway I can get that support if I'm an Authorised Parter right, even if the client hasn't paid the support contract?

I think this is a serious problem with E-Smith's marketing model that I would like to see openly addressed.  I want to use and see E-Smith prosper but even if I become a partner (which I plan to) I doubt I'll be able to sell the software contracts very effectively. It seems a marketing model strongly slanted towards medium to large corporate clients of whom I have few.

Am I just so accustomed to existing software marketing models that I am missing something here?

IMO if E-Smith modified their licence to allow for a modest upfront software purchase cost for use in commercial organisations they would make much more money from medium-to-small business systems integrators like myself.

The full support contract could still be there but it would be optional.  As I understand the open source model E-Smith is perfectly entitled to charge something for their distribution.  And it would be much easier to sell as it would contrast dramatically to MS software charges and service models.

I'm hoping this won't be seen as negative comment - just making supportive criticism.

[david]

Perhaps e-smith would appreciate a small contribution in re-sale situations where the full support package isn't appropriate. (ie: cheap domestic situations)
It would be nice to be able contribute something back even though its not required.

[Ross Laver]

Hi,

From e-smith's perspective, this is a nice problem to have. By which I mean: everyone seems to agree with the e-smith server and gateway is a great piece of software that solves a lot of problems for their customers. The only issue is: what's the best way to resell e-smith?

We've put a _lot_ of work into designing our Authorized Partner program, for the simple reason that we know the vast majority of small offices prefer to purchase their IT solutions from local systems integrators. Hence, our success depends on our ability to partner with you folks.

A few points that may help to clarify some of the confusion/questions you have:

1) It costs a lot of money to run a successful partnership program and a support organization to look after our partners' needs, and it's important that we focus our energies where the need is greatest. Realistically, there's no way to price our services in a way that would be attractive to most home users. The same goes for selling our software. We're in business to solve the communications problems of small and mid-sized businesses - not to sell shrink-wrapped cardboard boxes. That's a different business.

2) Dan is right: while our software is freely available, our trademarks are not. We of course have to protect them.

3) I may be wrong, but I got the sense reading David's post that he misunderstands our Partner program and pricing. When an Authorized Partner installs an e-smith server for a customer, he or she does not pay the suggested list price to register that server. Partners are entitled to register servers at a substantial discount from the list price (less, in fact, than many companies charge for software only). The Partner then provides support to that customer, while e-smith supports the Partner. We talked to a lot of systems integrators and they told us this is how they wanted the program to work. We listened.

If you haven't already done so, you might want to visit our Partner Zone for more information:

http://partners.e-smith.com

Or send your questions via email to partners@e-smith.com

Thanks

Ross

[Aaron Held]

I was the Internet Appliance Product Manager for Fountain Technologies, we shipped over 1 million PC's last year and filed chapter 11 this year.

I was working with an eSmith based appliance offering, but the company fell into problems before we got very far in the process.

However we did spen a considerable amount of time pondering this question, and I did run across some interesting perspecitves.  (You can imagine the purchasing directors opinion vs the VP of Business Development's)

Basically you have to examine your business model.  Our business was to sell solutions, or bundled hardware and software products.  When you examine the costs of
1) developing the solution
2) maintaining the solution
3) developing customized solutions for certain customers
4) product marketing

you will see the royalty cost absorbed in the bill of materials cost for the complete product.

Just look at product marketing alone.  How much will it cost you to develop marketing colateral material to sell the solution vs paying a percentage of the retail royalty fee.

As to the customer support costs, our customers traditionally always called us first, and we rarely had to call the manufacturer.  But when you do its usually a crital call, often we were working with the manufacturer on a new problem in order to get the solution to the customers before they noticed it.  And if you never call in for support, well that is a great justification to get the price per unit down.

On a less idealistic note,
Since leaving Fountain (two weeks ago) I became a local eBusiness/network consultant. It only took a week to find a customer in need of an eSmith based solution. I quoted the eSmith server at $1000 for the software and install.  Buried in a $20,000 initial bid the customer never mentioned anything.  Had I not quoted a server OS price, then they would have asked about it (since other bids came with Win2000) and I would have to go into the whole linux story. Better they just see the product and a commercial entity behind it.

If you go the appliance route, then customers will still be sceptical of where the software was developed and who will support it.  We went to market with a Novell based Caching Appliance. Since Novell had a bad rap with TCP/IP services we left thier name out of the intial product marketing.  The customers kept asking about the software load (becuase we were a typicall WinTel HW shop) until we put Novell back in.  They have heard of Novel as a software company so that made sales much easier

But since its a beautiful Sat morning and I am now a consultant I need to go out and join my kids, but if anyone is interested I'll be happy to discuss it in more detail.

Open source is a great thing, but don't expect other business to risk thier operaitons of a belief, specially if they are uninitiated as far an Linux/Unix goes.  A shrink wrapped box is easily worth a the price.  

(And yes we did hire a bunch of oversees developers and build our own, that was cheap, but marketing it was not!)

-Aaron Held
Aaron@MetroNY.com

[david]

I am sorry if my reply was confusing. I think I have a grasp of the partner program and the commercial realities involved. I believe the approch you have taken is correct and offers a very viable alternative to MS SBS.
Watching the posts for some time I see many home users who are very appretiative of all the efforts made by e-smith who would like to make a small contribution. Obviously such contributions would not entail any support or warrantee. Support already available throught these boards and the mailing lists is excellent.

I hope I did not confuse the issue with my suggestion.