It is fair enough that I answer the questions you have asked.
In answer to your questions:
How much time was spent on development of your software?
On our new 32 bit software, we have spent approximately 8 months in development and 2 months in testing before releasing it. We will be adding features and enhancing existing features as we proceed. Approximately, 3-5% of sales have been invested in our new software development.
Who ended up deciding to give it away with the hardware, and what was the deciding factor?
The decision to offer the software Free of charge was a mutual decision. The deciding factor was that no one else was doing it.
Was there much discussion on that point then?
There wasn’t much discussion about it because we were all in agreement.
What amount. in an hardware piece is directly related to your software?
Whats your total sales number for 2001?
How much of this would be lost if you where to sell this software at 50$, 100$, 200$, 300$?
These questions I will not answer because they relate to non published company information. As a private company, we do not disclose financial information. It would be the same as me asking you how much you make per year.
First, you should probably understand what our business model is about.
Entertron is a manufacturer who's target is the small to medium sized OEM. Our focus is to provide solutions while at the same time providing value and protection for the OEM's application. Save our customers time and money, while at the same time increase their revenue potential.
How does Entertron do this?
1) We provide a longer warranty - 3 years for relay outputs and 5 years for solid state
2) We don't charge for every little thing, i.e. manuals
3) We don't charge for support
4) We don't charge for Software, upgrades or bug fixes
5) We provide higher output ratings, thus eliminating additional components, such as additional relays or fusing (depending on the controller you use). Our relay outputs are 7 amps for the Smart-PAK PLUS and 8 amps for the SK1600-RIC (up to 16 without any restrictions out of 24). Our triac rating is 2 amp continuos and 10 amp inrush; transistor rating is 2 amp contiguous and 8 amp inrush. Our solid state design is individually fused and has been proven over its 20+ year history.
6) One CD for everything.
7) We give the OEM control over their program. Only one file resides in our controllers - that is the hex file. If the OEM wants to give the program, that is their option. Most PLCs have the ladder file stored in the PLC. Our customers consider this to be an advantage. Not all would consider this an advantage, it would depend on your perspective (end user probably not, systems integrator - it would depend)
8) When you contact the factory with a question, you do not get voice mail. You will speak with someone in technical support. Will you always get an answer when you call - it will depend on your question. If you call at lunch, they will call you back when they return. If you call after 5pm eastern time, you will be able to leave a message. You do not have to worry if your maintenance contract is up to date or if your software version is covered for support.
9) We will review programs at no cost to our customers. If you need help with your program that you have developed and you are uncertain as to what the problem might be or you just want us to review it, we do. I don't know what other manufacturers do, but this is probably done through their distributors.
10) Should you require a modification to a standard PLC - you will likely get the answer "no" from the other manufacturers (unless there is enormous volume involved). Why? Because the larger manufacturers produce thousands of one product at a time, usually over seas. They have no means to make changes once they arrive in the US. We are an American manufacturer. All of our ePLCs are manufactured here. Whether it is 1 pc or 1000 pieces. We have the ability to take a controller out of stock and make modifications to it.
Entertron is not the least expensive, nor the most expensive PLC on the market. Our product focus is in the Small to Micro end of the market. (up to 128 I/O)
I wouldn't say that our model is flawed. Allen Bradley and others have done a good job at marketing their name to the End User. For many of the larger OEMs, they are dictated to, as to what PLC is to be used. In talking with many people, asking, why did you go with AB? The answer I receive most is that our customers want AB. It is mostly for the name.
Automation Direct has gone head to head with AB, based on price and has taken some share away from them. Automation Direct has a successful model, primarily based on pricing, but in the mean time their business model has lowered pricing while at the same time hurt many distributors. The distributor provides a valuable service to their customers. When people see the pricing from Automation Direct (who has no distributors or reps and just recently added a few integrators) they still expect their distributor to be able to compete with pricing, while providing the same services that Automation Direct doesn’t. As stated several times, there is a cost associated with service. Do you want to be successful at the expense of others or based on your own merit?
Both have used a lot of advertising dollars to get where they are. We are not their size nor do we want to be. We don't want the many layers of cost that are associated. We would lose our flexibility.
We have many OEM customers and are working on new applications every day. We want our customers to be successful. If they are successful, then we will be successful. We want to make their experience as hassle free as possible. Providing things such as Free programming software is only one way
We are addressing an area where companies are frustrated with the way larger PLC companies do business. We are also providing companies an alternative to designing their own controllers. Giving the OEM a solution they can call their own, without spending thousands of dollars in design costs, hundreds of man hours and months of development for their own controller.
The intent of my original question and subsequent follow up, is simply research. To find out from a wide spectrum of users, integrators and OEMs what they think, in order for us to better serve both new and existing customers.
Included, for some of you who would like to know more about marketing is an article link to Selling Power on "How to Use Tough Times to Boost Sales and Increase Market Share"
http://www.sellingpower.com/article/display.asp?aid=SP2662776&fromFriend=TRUE
Thank you for taking the time to write. I hope this has answered your questions.
God Bless,
Stephen
