American History 1988
Chapter 117 - 111: To Each His Own

Chapter 117: Chapter 111: To Each His Own

The sales problem with Teams? Dean stopped in his tracks and looked at Kevin Kelly, the man with a large beard, "Mr. Kelly, are you saying you could offer me some advice?"

"Haven’t you ever thought about selling your own software through retail channels?" Kevin looked at him strangely, as this was the normal practice for mainstream commercial software.

"In fact, I wanted to try here in Silicon Valley first, you know, Kelly, the potential customers for Teams are likely just various companies.

It’s different from consumer software like Lotus 1-2-3 and WordStar; Teams is groupware. It can only show its greatest charm when used by more than two people on the same local area network."

What Dean said was also one of the shortcomings of Teams; it was almost useless for individual consumers to purchase it. Although also office software, spreadsheets, and word processors could satisfy both corporate and individual consumers at the same time.

This was also why Dean was not in a hurry to launch Teams in the retail market. Before the internet had achieved widespread interconnectivity, its market was limited to corporate users.

"No, Dean," Kevin shook his head, "Perhaps you underestimate the popularity of the NSFnet as well as the potential of Teams."

"So?" Dean looked at the magazine editor uncertainly.

"Come on, let me take you to see the real network." Kevin tilted his head, signaling Dean to follow him. Anyway, there wasn’t much going on at the magazine office, and he also had his own ideas.

"Wait, Mr. Kelly, where are we going?" said Dean, clutching two briefcases as he hurriedly followed him out of the magazine office.

"To Mountain View, we’ll be there in ten minutes." Kevin got to the parking lot outside and gestured for Dean to get into the car.

"OK~" Dean shrugged and sat in the passenger seat of the Ford, curious to see what the real network Kevin mentioned looked like.

From Menlo Park to Mountain View, just head east along Route 82. The distance between the two places is less than seven miles, and indeed, Kevin arrived at the destination in less than ten minutes.

"This is the National Science Foundation’s office in Mountain View," Kevin nodded toward the single-story bungalow in front of them, "Jim and I are old friends, he’s the person in charge here."

As the editor of a global magazine, Kevin had extensive contacts. He had dealt with all sorts of people in Silicon Valley, more or less.

Approaching and knocking on the door, Kevin greeted the employee who opened the door with familiar ease. He glanced back at Dean and said a few words to the National Science Foundation office staff, who nodded and signaled for them to enter.

"This is the Infrastructure Office, all the servers for the NSFnet in the Bay Area are here." Following the office staff inside, Kevin whispered an explanation to Dean.

"Wow~ This is my first time in a place like this." As several shielding doors were opened, Dean got a view of rows upon rows of densely packed servers.

"Feel free to look, but it’s best not to touch them," advised the engineer leading the way, with his arms crossed.

"OK, I understand," Dean approached the racks to take a closer look, and soon his attention was caught by the hardware devices flashing their signal lights.

"If I’m not mistaken, these are all luxurious workstations and routers from Sun Microsystems and Cisco Systems?"

"Yeah~ They’re very useful; we hardly need to do any maintenance," the engineer nodded proudly, pleased to show off to someone who appreciated the equipment.

"Mother F*cker, the National Science Foundation is so rich? The cheapest one among these costs over twenty thousand US Dollars!" Dean was stunned at the sight of rows upon rows of racks in the machine room. How much money would all of these add up to? The entire Infrastructure Office?

"They were all free," the engineer shrugged, "The National Science Foundation hasn’t paid a cent for these."

"What?" Dean turned around in surprise, "Free? How is that possible?"

Just in the room they were in, adding up the cost of this equipment would come to several million US Dollars. If including the entire office building, that would be tens of millions. Which company could afford to donate such amounts to a government organization?

At that moment, the previously silent Kevin pointed to a router in the corner, "That was donated by Global Magazine, and to its left is a server provided gratuitously by Apple. Also Genentech, IBM, Cisco, Lockheed..." Kevin counted each and every one with his finger, and Dean heard the names of many well-known companies in Silicon Valley. This included some department stores as well as names of private users.

"Kelly...?" It seemed Dean had realized something.

"Just like you’re thinking, Dean," Kevin nodded, then turned to the National Science Foundation’s engineer, "This is the norm now, isn’t it?"

"Of course, our budget is limited. So..." The engineer shrugged, "We need the equipment they provide, and they need the network access we offer."

Dean understood that these companies were trading servers, routers, and other hardware in exchange for "unauthorized access" to the NSFnet.

And the National Science Foundation needed that hardware support to ensure smooth operation of the network backbone.

Dean also remembered reading about the National Science Foundation’s financial situation in the newspaper recently; it had invested a total of two hundred million US Dollars in the NSFnet over five years.

To build the backbone of the network across North America with that sum was by no means excessive, let alone the fact that the National Science Foundation had just conducted a major upgrade of the network that year.

Now, Dean finally understood how the National Science Foundation was able to do this; the most expensive part of the expenditures, the hardware like servers, did not even require their own money.

As part of the exchange, the NSF network, originally intended solely for government use, had also been accessed by companies of various sizes.

Private users were still rare, of course, but with network operators in the field, Dean believed they had their own ways.

"To be honest, this was beyond my expectations," Dean finally understood why Kevin had earlier said he underestimated the prevalence of the NSF network.

It turned out non-scientific institutions had long infiltrated the NSF network, even at the cost of violating the law.

"People always say that government regulations are too rigid," Kevin patted Dean’s shoulder, signaling to return and discuss this topic further.

On the way back, Dean kept thinking about the impact of these changes on his Teams software.

Had he not seen it with his own eyes, he would have found it hard to imagine that the NSF network operated this way. The aura of authority that once belonged to government agencies had visibly faded.

"So, Dean, do you now understand what the network means to everyone?" With the experience they had just shared, the two had become much more acquainted, and Kevin made him a cup of coffee as soon as they got back to the magazine’s office.

"I’m not sure about other places, but here in California, many people are quietly accessing the NSF network." Kevin cradled his left arm, coffee in his right hand, leaning against the office desk. "But I think this rule applies to other states in America as well."

The rule Kevin referred to was the mutual benefit between the National Science Foundation and private companies.

"Okay, today’s experience was indeed a surprise. But I believe Teams’s potential clients are still enterprises because I originally developed it as office software," Dean replied.

Dean believed that although there were many private users on the NSF network, this would not greatly impact Teams’s market share; at most, it would be a bonus.

"Well then, let’s give it a try," Kevin finally made his suggestion. "Dean, I have a friend..."

Dean looked puzzled as the way Kevin started sounded familiar.

"This friend of mine owns an electronics store. It primarily deals in computer hardware and software.

Computers, keyboards, mice, hard drives, floppy disks, and all sorts of commercial software... Basically, Dean, middle-class families with computers like to shop there."

"Okay, got it," Dean understood Kevin’s idea as soon as he mentioned "I have a friend."

"Kevin, Teams software can provide your friend’s electronic store with a physical buyout version. The standard and VIP editions are priced at 149 and 199 US Dollars respectively." Dean took out a price list from his bag and handed it to Kevin.

"For every copy of Teams that the store sells, it can take a 20% commission. This offer is only valid for Mr. Kelly, as for how it’s divided, that’s your business."

"Deal!" Almost immediately after Dean made his offer, Kevin agreed without hesitation.

Why had he taken Dean specifically to the National Science Foundation’s infrastructure office in Mountain View? Wasn’t it just to secure that very response?

This was Kevin’s strategy to convince Dean to sell Teams software in brick-and-mortar retail stores.

And he did indeed have a "friend" who owned an electronics store, only that "friend" usually called him "Dad" once he got home.

The 20% commission made Kevin very satisfied. Normally, retailers earn a 10%-15% cut from the sale of a product; the higher the selling price, the larger the commission.

With Teams’s pricing, every sale made was a substantial income.

"Kevin, when you’ve sorted things out, you can call this number to arrange for Byte Software to ship," Dean took out a business card and handed it to him, "We’re in Menlo Park, not far from here.

Of course, if the customer is also from Silicon Valley, I suggest contacting us for onsite installation, as this can save a bit of expense."

Physical software at retail stores typically required CD or floppy disk packaging, which itself entails some costs.

Therefore, for customers near Silicon Valley, Dean preferred to offer onsite service.

"Okay, I understand." As long as it didn’t affect his cut, Kevin didn’t mind; it was just a phone call away.

See, today he had brokered two deals in one go.

The ten thousand US Dollar sponsorship for the magazine ensured that the upcoming Christmas special issue of "Global Overview" could be published almost without any risk.

But of course, the most significant gain was the retail channel’s commission since that money was now securely in Kevin’s pocket.

With the warm send-off of the other party, Dean also left the trailer-like premises of Global magazine.

Although there were some twists and turns, things went fairly smoothly. Dean wasn’t too concerned about the 20% commission.

While the offer might seem generous, on the limited retail market, offering a few extra percentage points was just a way to incentivize the partnership.

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