Slashdot Mirror
Meeting with Netpliance
Kalin Harvey writes: A while ago I posted an announcement
on Slashdot asking for feedback to take to Netpliance regarding the i-opener
and their relationship with the hacker community. Since then I have
met with Netpliance and basically concluded that a lot of the dialogue
we were having about the company was missing the mark. Netpliance
is a different company than many of us thought and basically don't have
the ability to sell vast quantities of i-openers to the hacker community;
their whole focus is the service, on many devices, not just the i-opener
hardware. However, they also are big fans of open standards, and
would love help to contribute to an open development model and see the
embedded linux appliance market grow. They are also already making
commitments to working with the open source community. You can read
my full account
on linuxpower.org
I read the article and applaud netapliance's attempt to bring the internet to "Grandma" as the put it. It really is a noble venture and hope they do succeed. But they must admit that they have stumbled upon something that they shouldn't ignore because its not in their original "business model" and thats the need for a small utility computer. They say that they have only a limited supply of the i-opener computers and it would hurt their market projections if they were to be sold to individuals or companies outside of their target markets.
Its a strange world we live in when companies actually reject customers who are Willing and Able to buy their product in the hundreds.
bpd
--
I read the article and all I came up with was a resounding duh. The author acts as if it is a surprise that Netpliance was selling the terminals as a loss to gain market share to later recoup the cost on charging for service. Well ...Duh, they were selling a PC for $100 - $300 (depending on what discount you got). It was obviously at a loss.
Personally, I have begun to grow tired of these so called emissarys of the open source movement who make the open spource community seem like raving fanatics or clueless cheapskates. It doesn't take a genius to realize that Netpliance was always planning to sell the service and to go there and ask them to change their entire business model to satisfy a bunch of geeks who are not part of their target audience is ludicrous (heck, some ISPs still don't support Linux). It seems to me that if Open Source advocates want to be taken seriously by corporate interests they should be conversant with basic economic concepts and have an idea of real-world business practices. If this doesn't happen then corporate interests will continue to view Open Source advocates with disdain, suspision (sp?) and distrust.
Then again, do we reallly need corporate interests to satisfy all our wants? For example, if all you want to do is hack an I-opener, buy it, pay the $20 a month (if you're a good hack you make that much in an hour or two at work) and hack away. I'd simply see the $20 as a payment plan, similar to what I have on my car as opposed to buying a service (which it half is).
I had the opportunity to use one of the I-openers yesterday. I was getting my oil changed and the place had one for customers to use. The software continued to lock up and the proxy server that netpliance's ISP used couldn't find a thing. After several reboots I finally made it to a website and it took forever. I believe embedded Linux is the best thing that could happen to those machines. Cool little gadget, that's for sure.
It seems to me that Netpliance knows it handled itself very, very poorly, and is now attempting to satiate the teeming masses of Open Source developers that it has alienated. Unfortunately, bald faced propaganda such as this does nothing for me. This article reads like it was written by a NetPliance PR person. I don't want some warm, fuzzy article about a company, especially one that up until this point has treated everyone I know with contempt and deception. They just think everyone will believe it because it's posted on a domain with "Linux" in it. "Mandatory" retroactive service agreements, collecting addresses and credit card info from Circuit City, the list goes on and on. After stunts like these, they're going to have to earn their respect, not lie to everyone even more. Granted, acknowledging that we (as a market) exist is a step, but regardless of how nicely they're doing it, they're still brushing us off. They're ostensibly giving us the finger, the whole time hiding behind their "SEC Filing" and "FCC Regulations. Take this quote for example: They also risk violating FCC regulations if they sold certified devices that they knew would be modified. That is the sober reality of the situation. *Every* electronic device has to be FCC certified in order to be sold, from my TV to my computer, to my toaster. There's tons of websites on modifing every single aspect of computers. Does that mean that Dell is in violation of FCC regulations when Joe Schmoe decides he wants a bigger hard drive, or a different OS? Not at all. They're selling a certified product that falls within certain parameters; once it's in the hands of the consumer, it's out of their control. The FCC knows this, so claims like this are absurd. The bottom line is, NetPliance gave this guy a line, and bought into it 100%. You'd get less biased information off their home page.
Their behavior with regards to how they handled this whole situation gives an obvious clue to the nature of the company. The author of this piece must not have much experience dealing with the teflon warriors, since the article read like some marketing drivel.
Sorry if this seems harsh, but it's true, this is a company that talks up open source, and open standards but controls the user's experience completely and goes with a proprietary OS for the device. Which is fine in my opinion, but coating the board with epoxy? That's ludicrous. Retroactively applying charges to consumers who didn't authorize them? Criminal.
The fact of the matter is they don't give a damn about any of us, they're driven by pure greed. And not "good" greed (where they'd ramp up and try to supply those of us who'd want a device without the strings), but bad greed ... hoarding the devices to ensure they have excess to maintain maximum profitability.
In my opinion, they're just another AOL wannabe, and can't see past their next fiscal year. This is worse than anything else they've done. Just another company exploiting the net by trying to reduce choice and enhance their control.
Am I cynical? Sure, from experience. Maybe I'm wrong and they really have a great vision and want to empower the consumers with great technology and yadda yadda yadda. More likely they just want as much money as they can possibly get.
I'm very glad to see this on /. I'm starting to feel that this community has a tendency for knee-jerk reactions to a lot of topics.
I'm basically a liberterian, I believe that information does want to be free and that we should have the right to do just about anything that doesn't hurt another.
However the overall tone, especially in the last few weeks has seemed to me to be a little extreme. There's a lot of @!#@ the man going on. Jon Katz's lastest rant is probably the best example of that.
The best part of having a community of very smart people is the possiblility of a dialog that considers issues from both sides.
We need to remember that netpliance probably has a staff with plenty of geeks just like us. They're not corpratist, they not looking to get rich by raping hackers, they're not making toxic chemicals or crack cocaine. They will simply be out of business if they sell $400 boxes for $99.
Rather than condem them for doing something that when we stop and think kinda makes sense, it's better to do as Kevin did and approach them rationally.
An mod-able i-opener at a price palitable to both hacker-consumers and netpliance is something we want, netpliance going out of business because we've bankrupted them is not good for them, us, or society.
ok, now tell me why I'm wrong
Netpliance is doing wonderful things. I'm dead serious; they're one of the few companies I've seen who I've really gotten the sensation that They're Getting It.
But they're a perfect example about how a corrupted market can affect even non-corrupt entities such as Netpliance.
Consider the $300 to $400 rebates that have been applied to computer prices across the country. It's a nice way to subsidize the cost of a computer--"and all without the government stepping in". But suddenly prices are no longer as advertised; you can't even look at a computer product anymore without looking for the fine print to see what it REALLY costs.
More than any other market, technology abuses the core concept that what you buy is A) What you think you're buying and B) Costs what you think you're paying. Old Man Murray(the ridiculously brutal commentary page at www.oldmanmurray.com) recently savaged Origin Systems for, as they said, "They've broken the sacred bond of trust between gamer and gaming mega-corporation: that there is actually a game in the box you're purchasing."
You just don't get that in other industries, but a combination of clueless newbies who don't even know the primary purpose of what they're buying and intensely focused techies who don't care about anything *besides* the primary purpose of what they're buying has fostered an environment where technology companies feel free to make bolder and bolder moves against basic consumer presumptions. The FTC, afraid to put the brakes on "the engine of the New Economy", is afraid to step in, even when scams such as UCITA are propogated and computers get advertised at blatantly false prices.
Netpliance doesn't sell boxes, folks. They sell a damn cool service. For $99 down and $20 a month, you go from Zero to Net Connected. Obviously this requires hardware, which Netpliance was willing to provide at a loss. The same happens for Cable Modems and DSL, for that matter. That's what they wanted to do, that's what they're built to do, and that's what they would be doing, if the rest of the market--if the big boys at AOL/Compuserve, and Microsoft, and Prodigy, and everyone else--hadn't defined customer expectations as a computer at a couple hundred bucks as long as you got that net connection "you were going to get anyway" through them.
Once the market had been polluted by the big players, where do we get off raging against a little guy with interesting hardware who did nothing else but enter the market they created?
Yes, it's a scam. But with the ridiculous fear against doing anything about it in government, what is nothing less than bait-and-switch has become a standard for an entire market. In such an environment, who wouldn't expect Netpliance to package their service as a product? It's easier to sell, they didn't invent the scheme, and honestly it gets cheap computers into people's hands, which is a major goal for everyone.
Now, things went wrong for Netpliance, but that's because they went the extra mile and designed a genuinely interesting piece of hardware to accompany their service. To be honest, they should license the design to another company--VA? Point of Sale? Hello?--and let them deal with the hassles of the product market, while they sell their service for $99 and $20 a month. But the FTC will have to step in and enforce honesty in the market first.
Expect this to happen when high speed networking hits critical mass *or* when a downturn in the economy makes large numbers of people cancel their modem Internet service.
Yours Truly,
Dan Kaminsky
DoxPara Research
http://www.doxpara.com
It seems to me that reverse-engineering iOpeners -- or any other "razor and blades" network hardware -- is a very dangerous proposition for *nix advocates in the long run.
Thin clients have an interesting effect on Windows sales -- they potentially remove Microsoft from both the workstation and server market. After all, whenever anyone uses a thin client to access a network resource, they are largely unconcerned with where the data is coming from -- only that it's there (stability) and available (performance). Any time stability and performance are of greater importance than interoperability with Windows and ease of administration, Unix and Linux are more likely to be used as servers.
If we successfully drive these companies out of business so we can save a couple of hundred bucks on Intel hardware, we open a crack for Microsoft to get in and stay in, at the expense of the average user, and at the expense of *nix.
Every debate needs a strong dose of skepticism- and this post provides it in spades. But it's also important to understand the bias of the skeptics as well. The author's website includes a very passionate article that (among other things) displays an extreme and deep distrust of America's power structure of elite, wealthy corporations and individuals, especially when it comes to control of information through mass media outlets. This posting is extremely consistent with that worldview- which I must credit him for. On the whole, I'd agree with him, when it comes to large, multinational corporations.
/. posting, I checked with my local Circuit City, and they were backordered by 16 units. Multiply this by all of the retail outlets they sell through, and it represents a huge and overwhelming surge in orders that they were obviously not equipped to deal with, and that would not generate the ongoing service revenue they needed to meet their financial goals. Most startups are structured financially in a way that would not tolerate an deviation from the plan that is this large. If they missed their early service revenue targets by a significant margin (for any reason) they would be crucified in the public market, and they would effectively no longer be a going concern as a business.
As a counterpoint, I also would say that I don't think startups are in the same league. My bias is that I've worked for several, and understand that environment pretty well. I believe it's highly likely that Netpliance did not "give this guy a line", with the implication that they somehow mislead him about their true agenda or intent in order to generate positive press. I do think the author of the original article could have been a bit less star-struck and written a more balanced account, but I'm guessing that didn't happen because of inexperience about the functioning of startup businesses.
Here's what I'm guessing happened with Netpliance. I believe, as a whole (like many startup Internet companies) that it was formed by smart, well-meaning people who are passionate about a vision, which in addition to having some socially redeeming values (bringing the Internet to the masses) is potentially highly lucrative. I'm guessing that the demand for their appliances caught them completely by suprise, and likely posed a short-term, very serious threat to their financial viability as a business. This is something that, due to the way the investment community works, they would never admit to publicly, unless they *HAD* to. If they *HAD* to, SEC regulations would require them to distribute that information broadly and publicly. You can understand why they wouldn't want to.
Why would they have been in financial jeopardy? After the original
I don't think they made an unreasonable decision, given the circumstance. Being a "nice company" to a large community outside of your target market at the expense of the company's existance is just not an option. Their original misstep was to err on the side of being a nice company, and not lock people into a mandatory service agreement. Should they go out of business because they failed to forsee that the geek community would be so interested in their hardware? I don't think so.
Before you think I'm a total Netpliance apologist, understand that I was burned by this as well- I ordered a unit, and I had it canceled. My experience was that this was handled fairly smoothly, even if there wasn't a lot of communication about it. I understand that many people were handled less smoothly, and we can definitely fault Netpliance for not implementing what was a necessary decision in a way that was less disruptive. But accuse them of lieing to this reporter and "giving us the finger" is a bit much, even for a skeptic.
The moral of the story is: Circuit City will not, in all likelyhood, EVER call you to tell you that your machines are in. I'm amazed that in my case they had the "courtesy" to make what they thought was a preemptive service call.
As a side note, I personally feel that Kalin Harvey's article is right on the mark. While I refuse to become personally outraged by the behavior of many of Slashdot's denziens towards Netpliance (not to mention the unforgivable and completely unintelligent arrogance of many of the regulars on Ken Segler's iOpener BBS), I firmly disagree with the thought that Netpliance is "screwing the hacker/open source community". They've got a specific business model (a very good one IMHO) and it specifically doesn't include providing the world's cheapest X terminals to self-righteous geeks. I've never seen a community more quick to cry "Fuck the bozos! Why isn't the Man doing something about this?!?" when a free lunch turns out to be less than the golden goose with the singing harp thrown in for good measure. The only faults I find with Netpliance's behavior are a lack of foresight ("Do not underestimate the power of the Dark Geek") and a willingness to act rashly out of corporate panic (epoxy? clipping IDE header pins? Retroactive service contracts? PLEASE.). However, many of Netpliance's critics suffer the same general failures.
I count myself lucky to have gotten an iOpener at all, and would gladly have tipped my hat in salute to Netpliance had they successfully prevented me from causing them to loose another ~$200.
Curiouser and curiouser...
as a complete outsider to this story (I don't think iopeners are even available in Europe), I find nothing much to fault with the company's stance, *except* for the retroactive contracts. If *I* was bitten with one of these, I'd tell my bank not to pay. now, leaving that aside, good luck to Netpliance with their stuff, they sound like they more or less "get it".
When you honestly look at the big picture, you have a company who's idea was to bring the Internet affordably to many people. In the process they stumbled upon a very useful product beyond their original vision. My question is this: If so many people want to hack these little boxes to do something they're not really designed to do, they why not start your own business? Develop your own little thin client and run Linux on it and sell it.
Now I am not saying go out and rip off the i-Opener design or anything, but if this is such a popular device, why doesn't someone else come along with their own and market it to corporations and schools?
I'm not saying that Netpliance isn't nuts for not jumping on this chance to fill a clear market void, but if it isn't in their mission statement, then why fault them? They are pursuing the audience they set out to, and they're well within their rights not to drop one market for another. I applaud Netpliance for not seizing a quick buck but standing by their business model.
"I used to be an agnostic, but now I'm not so sure..."
There is nothing wrong with a business model that uses contractual revenues in the future to subsidize an up front outlay. This is commonly done in cell phone contracts. In that case, there is legal language that you sign. The contract has cancellation fees and cancellation is rigorously defined.
Netpliance did not choose this model. They chose to simplify the up front purchase without requiring agreement to a contract. They didn't want to scare away customers who aren't sure if they really want to make this kind of committment. They chose to sell through outlets (i.e. Circuit City) that were not able to handle prcessing a contract.
Companies should expect that their customers will act in their economic self-interest. If you need to compel behavior to protect your business model, you need to put it in a contract and not resort to shady tactics like charging people for services that they did not authorize or retroactively changing your terms of service. Netpliance can't have it both ways: wanting not to scare away people who are afraid of a committment and enforcing a committment that people have not made.
Their business model is broken as designed. It is based on a fundamental contempt for their customer. They do not deserve our resepect. If they need to compel behavior after the sale, they need to execute a properly drafted contract.
Anomalous: inconsistent with or deviating from what is usual, normal, or expected
Anomalous: deviating from what is usual, normal, or expected
Canard: a false or unfounded repor
What about the LCD monitor from a big server rack?
I'm a loner Dottie, a Rebel.