Yeah, you shouldn't need to be outside the system if you're giving them business. I always wonder about the whole, "How many are you making" question. I know they ask that for a good reason, but it's a question of, "How the hell should I know, the product ain't done yet!"
I had one key component lock-in a higher price recently, simply because an agent quoted it out in the US, because it was in stock there and I needed it quickly. Now I have to figure out how to undo that.
My experience has been on the mega humongo corporation side of things. I get good pricing because prices had been negotiated with a vendor at a very high level and I just happened to benefit. Small companies (which are the mostl likely for OSHW) don't benefit from that
The thing that annoyed me about that was the sales rep didn't *do* anything to close the sale. Normally, the registration is only supposed to happen if they got an FAE to help with the design-win, e.g. some distributors have guys who can come on-site to help debug code or review schematics. This was just a quotation, and the registration was claimed.
Ultimately, you could try to source components at the lower "china price" but they have to go through the gray market, so the purchaser and producer identities are lost. But doing that carries its own risks.
Solid example: I designed in an MCU into a product. Design work was done, at the time, in the US. Pricing was around $1.40 in the US. I went to Asia and got quotes on the part number and price was coming in around $1.00.
I went to place the order, and once it hit the factory, it bounced; they returned the price to $1.40 and refused to give it to me at $1.00.
What happened was the sales rep I was working with in the US reported my company name and part number to the factory, and the factory cross-checks all orders placed globally against the registration table. If you match against someone who claims your regsitration, then the factory will honor the pricing originally given. The theory is to protect the efforts of FAEs and sales reps in the US from overseas price competition, I think.
@zach and then you get the vendor who sends you the certification but then you realize it's got a fake registration. Fortunately, all UL registrations are searchable for free, so I cross-check the certs after I get them.
but in the context of design registrations, a lot of OSHW startups in the US don't realize that by talking to vendors in the US they have locked themselves into US prices even if they go overseas, at least if they want to buy genuine parts not on the gray market.
@sabron that's good to hear. Would be nice to do something about the design registration issue though, I've seen so many times an Avnet or Arrow lock in a distributor price on a design for the mere exchange of an email, when most of the actual effort comes from the community.
@jason i agree, most sales reps and FAEs can get design registrations for doing very little work but at least they can trace their effort to solid revenue gains to a vendor as a result.
OSHW-supported reference design platforms have no such traceability, and furthermore the sales reps and FAEs have no motivation to give credit to the community for any increase in sales. Thus for a vendor to recognize the impact of an OSHW project it has to be an unequivocal and very public success.
One of the keys to OSHW is open documentation for ICs. This is particularly important for programmable ICs. Yet FPGAs, which are some of the most useful (or potentially useful) programmable ICs, have closed programming documentation so you must use the vendor's tools. IMO this has held back FPGAs' potential and has made a number of useful applications impractical, such as reconfigurable computers. Anybody have opinions on this topic?
I think it's interesting how Atmel was kind of pulled into the space and now are putting lots of resources behind the hobbyist community. When Arduino started, it didn't seem like they cared too much (I'm sure they did a little) but it seems like they really care now!
@caleb yes, i think open hardware is strong when it disrupts well-established industrial tools. started with 3D printing, lasercut... but i think we are going towards more and more of open hardware alternative machining tools
I think in general there will be a move towards prototyping platforms that work in production too. We've solved the problem of getting a prototype up and running in a couple of hours; now the next problem to solve is how to very easily transition from first prototype to manufacturable product.
I think the opportunity cost of not building an ecosystem around your product is higher than the additional burden put on competitors looking to clone what you make. Cloning is just too easy to try to fight in all but a very few cases. Your differentiation is often more on the expertise, value chain (including brand) and supply chain.
I think part of the problem with the question if OSHW companies could be acquired is that many people who start companies and practice open source aren't necessarily looking for an exit strategy that involves an acquisition.
If you start, day one, thinking your trajectory is acquisition, it's less attractive to be open: one way to prop up your value is by controlling the flow of information about your product.
re: Croud funding - I've dipped my tyoe into crowd funding with a Kickstarter. I've been involved in just about every other type of funding through years past, so I'm enjoying learning about crowd funding now.
I'm not a buyer of companies, but if I were, I wouldn't shy away from a good purchase just because it's open source. Design cycles are so quick these days that the best business offence and defence is to keep designing good products.
@Chris definitely not! I think you misinterpreted my comment, I just gave a good list of why OSHW companies could and should be acquired :-) Just not for IP. But look at some of the huge acquisitions lately. Instagram wasn't purchased for IP; anyone can make a cameraphone app. They were purchased for their community and their users. Same could be true for OSHW companies.
@zsupalla: definitely agree branding is super-important, but I'd say it is more important to the success of the project than to the success of the individual making open hardware. you can have a hugely successful project and make no money. For example, I don't directly benefit from individual BeagleBone sales.
@Chris There are a number of reasons that companies get acquired. It might be talent, or community/customers, or brand... and none of those things are diminished if a product is open source. If a company is being purchased for IP, and the IP is open source, then that would make them difficult to acquire.
re "Sparkfun and Adafruit own multiple parts of the value chain"
I find that trend very interesting. That's the way it was a few decades ago. Everybod had their own manufacturing. Then everybody went on an outsourcing binge. It's interesting to see the the reverasal trend
@Susan: you can certainly make money off open hardware, but it is a lot easier if you own the means for production. if you can't make the boards yourself, there is still value in support, etc., but there are so many places where you have to "share the wealth" that you can eventually be cut out of the value chain.
@susanrambo Currently, the ones that are making a living are the companies in the prototyping and/or education market (arduino, adafruit, sparkfun... for the big ones).. don't see many already profitable in the consumer product world
Gotta try what I can, right? It'll help with "progress" of getting your IT team to include some more fun fiddly bits. I can already see the front page update for "recent comments" slowing down. I can only imagine I'll be marked as a spammer soon.
As we unveil EE Times’ 2015 Silicon 60 list, journalist & Silicon 60 researcher Peter Clarke hosts a conversation on startups in the electronics industry. Panelists Dan Armbrust (investment firm Silicon Catalyst), Andrew Kau (venture capital firm Walden International), and Stan Boland (successful serial entrepreneur, former CEO of Neul, Icera) join in the live debate.