Used Symoblics hardware

[Barry Margolin <barmar@THINK.COM>]

    Date: Mon, 3 Apr 89 12:44 EDT
    From: Henry@ai.ai.mit.edu (Henry Lieberman)

    Symbolics is trying to kill off the second-hand
    market in used 36xx machines.

    There are many used Symbolics machines on the 
    market right now at cheap prices.  I was all set to 
    buy some.  I called a Symbolics salesman inquiring about
    upgrades and maintenance and he told me:

    * There was a "strictly enforced" $10,000 "software license 
    transfer fee" between the old owner and the new.  

The existence of this fee doesn't bother me, but the amount seems
excessive.  Most used machines are sold for less than $20K, so this is
more than 50% of the price.

    * Maintenance on a 3640 is about $7,000/year [you could
    think of this as one Mac II a year] versus $1,200 for
    MacIvory.  

I doubt that this has a whole lot to do with trying to kill off the used
36xx market.  Maintenance on newer models is less because it costs less
to maintain them.  3600's break down more often than 3640's, which break
down more often than 3650's (I don't think we've had a non-disk-related
failure of any of our three 3650's in the two years I've been here).
There are hardly any parts in the Ivory board set, so I suspect they
hardly ever break down; you're basically paying maintenance on the Mac
II.  Also, MacIvory sells into the personal computer market, not the
workstation market, so it is subject to that market's pricing
constraints.

You don't HAVE to get a service contract, by the way.  You can pay for
service on a Time & Material basis.  But just one disk failure a year
(those CDC disks aren't the most reliable in the world) will probably
hit you for most of the $7K.  If the machine isn't used for anything
critical you might want to take this chance (if the disk dies you can
always pirate the machine for spare parts for other machines).

Also, I think there's a bit of apple/orange comparison going on here.  I
don't think a MacIvory is considered a replacement for a 3640.  It's
primarily a delivery vehicle, not a development machine.  Paging is too
slow for serious hacking.  One expects to pay more (both up-front and in
maintenance) on higher performance systems.

We also aborted some plans to buy used 3600's last year for similar
reasons.  As a customer, I agree that it's annoying.  But looking at it
objectively, I can't really fault Symbolics a whole lot.  I certainly
don't know all the variables, and I'm not very good at economics, but I
can imagine that these "fascist" pricing schemes make good business
sense.  People were very upset at Apple last year when they raised a
bunch of their Mac prices; it was a reasonable business decision in that
case because Apple couldn't keep up with the demand at the lower prices.

Of course Symbolics is trying to encourage people to buy the newer
machines (3630, MacIvory, and XL400, not just MacIvory).  They make
their money by selling machines, so why shouldn't they?  If they gave
owners of 2nd-hand old machines the same service prices as they were
handing out three years ago when the machines were new they'd be pricing
themselves further into the poorhouse than they already are.  Instead,
they provide incentives for 36xx owners to trade in the machines for
newer machines (unfortunately, the deals aren't quite good enough for us
-- last year we looked into trading in most of our 3600's for 3630's and
3650's and it would have taken 6 years to break even).  And when used
machines ARE sold, some money goes into their pockets via the license
transfer fee.  I'm not a big fan of the concept of software licensing,
but given that it exists I can't really fault Symbolics for taking
advantage of it.

                                                barmar