Richard Bucker

Why enterprises and the super-rich get discounts

Posted at — Jul 28, 2016

I was sitting at my desk writing a letter to the CEO at CoreOS. In chaotic fashion I was outlining how CoreOS might lose the container war and I outlined my reasons. I also described what I thought was a potential winning strategy given my experiences and perspective of history.

One recommendation I made was that CoreOS should have a lower cost of entry for developers, consultants and startups. And in the same recommendation I suggested that the enterprises should be subsidizing the startup and not the other way around. And lastly I was starting to outline what I thought were the 3 major layers and their offering.

What I wrote,

what I read,
  • poor
  • middle-class
  • rich
I do not pretend to understand the sales, marketing or economic justification for why business’ give deep discounts to enterprise customers. Once you have an enterprise customer they usually stick around a while. If you have a sticky technology they are not really going to leave for a very long while. And sometimes they’ll just absorb you.

In my case I’m trying to get some tech welfare from CoreOS. Their product is good but the competition could put them out of business as Docker is truly the largest panamax container company (not to be confused with the real either thing). The CoreOS security model tells a chain of ownership story that might actually make banking, financial services, and every day computing safe… if the price is right.

—–

In my naive way, the reason that the poor and rich are subsidized by the middle-class is because of the physics. So long as the middle-class is the largest part of the population they will represent financial momentum. The rich and poor are volatile or transient as people enter and exit the middle-class.

Well that was a fun idea and it seems I was wrong and while that might have been how things were… they are not how things are. Reading this article it seems that the rich are now a larger percentage of the population and possibly getting larger. The rich now have the momentum and must subsidize the rest of us.