Re: ADA IS NOT A FAILURE.

[att-out!cbnewsl!willett@rutgers.edu (david.c.willett)]

>From article <7.1289.238.0N54F073@cld9.sccsi.com>, by michael.hagerty@cld9.scc
si.com (Michael Hagerty):
> On Fri, 6 Aug 1993, David C Willett responded to John Doner:
> 
> DC3 I can't agree with you here John, development costs are not "sunk".  Ever
y
>   3 R&D venture I've ever been associated with or heard of, has a "break-even
"
>   3 point, which is calculated up front.  The development team, or champion, 
or
>   3 manager (it varies with company) *MUST* break even by a particular date o
r
>   3 have their head(s) handed to them by the backers (e.g. the Board of
>   3 Directors).  
> 
> Small nit, here...  Costs, commonly divided up into fixed and variable (where
> development usually goes into the "fixed" category), are usually not related
> to price, except that the per copy variable costs should not exceed the 
> price.  The concept of "break-even" is very subjective and is usually driven
> by formulae based upon SWAGs...
> 
> Regards, Mikey <michael.hagerty@nitelog.com>
> ---
>  ~ MR/2 1.52 #63 ~ I can quit anytime I want; I just don't want to!
>  ~ R109U:~ Usenet ~ Nitelog BBS ~ Monterey CA ~ 408-655-1096       

Responding to the nit......

	There are many ways accountants & managers classify costs (after all,
it's their job and their culture -- e.g. Eskimos have hundreds of words for 
snow...)  so I think using simply "fixed" and "variable" is, well.... too
simple.

	I've heard the terms "recurring" and "non-recurring" used in 
connection with R&D funding.  Non-recurring costs usually refer to the 
"price of admission" into the research area (e.g. lab assets, software tools,
CM systems, etc.), whereas "recurring" costs usually refer to the "price
per feature" (e.g. "What if we put a Windows interface on it?").

	The break-even point I mentioned earlier is the point on the 
time vs. unit sales graph where *all* the projected R&D costs would be paid
back.  From then on, the product makes a profit.  Clearly, the unit price 
the market will bear for the product has a great deal to do with where the
break even point ends up.  Quite a bit of the "SWAG" part of unit pricing
goes into setting the price the market will bear.  Doing the job well requires
a keen understanding of one's potential market.  It is in that understanding
of potential markets for small-platform Ada compilers that the Ada vendors
probably missed the boat.

-- 
Dave Willett          AT&T Federal Systems Advanced Technologies
Shoulda been a cowboy/Shoulda learned to rope & ride/Wearing my six-shooter/
Ridin' my pony -- on a cattle drive!!!    Stealin' a young girl's heart/
Just like Gene & Roy/Singnin' them campfire songs/ Shoulda been a cowboy.....