Op/Ed: US$2,356,250 Reasons For LL’s OpenSpace Policy
by Alphaville Herald on 08/11/08 at 9:11 am
Open Space sims and how Linden Lab got it right – for themselves
by Maximilian Proto, Department of Random Guy Posting
After Linden Lab introduced a new pricing policy for its highly popular Open Space (OS) sim product, residents joined to celebrate the cherished tradition of feverishly complaining about price increases (“they’re making it too expensive”), price decreases (“they’re devaluating my investments”), new product introductions (“they’re hurting mainland owners with those islands”), product changes (“they’re are hurting island owners with those OS sims”) or even when Linden Lab doesn’t do anything at all (“they’re not doing anything at all”).
But why did Linden Lab decide to respond with such a steep price increase for a highly successful product risking alienating their customer base (further)? In particular when the RL economy is on the brink of a recession? And wouldn’t Linden Lab suffer considerable losses if estate owners would really abandon their OS sims as a reaction?
Unfortunately, the idea that JIRA issues or threats of abandoning sims will change Linden Lab’s pricing plans is futile. In fact, Linden Lab’s move makes a lot of economic sense for the company, and even large scale abandoning of OS sims will likely have little to no impact on Linden Lab’s financial performance.
And this is why:
It seems that OS sims turned out to be much less of a success to Linden Lab when they compared the profit and loss statement with that of standard sims. Apparently, on a like-for-like basis the average operating costs of OS sims are considerably higher compared to standard sims which turns an OS sim into a lower margin product for Linden Lab.
Hence, Linden Lab decided to rectify this situation by introducing a pricing structure that deliberately reduces the incentive to purchase and maintain OS sims in order to make people chose standard sims instead that are generating higher margins for the company.
Obviously, Linden Lab’s move (understandably) infuriates OS estate owners and leaves them with four basic options:
Option 1: Keep going and pass the extra costs to tenants (if they are in the land business), customers (if they are in the content business) or group members (if they are a non-profit community).
Option 2: Convert OS sims (back) into standard sims and hope to keep your tenants/customer/group members.
Option 3: Give up and sell the OS sims to another resident.
All three options will have only very little impact on Linden Lab’s revenues as they will continue to receive the tier payments for the sims. In fact, they will get more revenues and better margins due to the increase in tier fee.
That leaves option 4: Give up by simply abandoning the OS sims.
This is the most interesting option to look at – not only because the other three options are pretty straightforward but also because many estate owners are using the abandonment argument as a threat to convince Linden Lab to change its course.
Let’s look what would happen to Linden Lab’s revenue if OS estate owners would decide to abandon in droves and see if the company would be impressed. In order to be able to do so, we need to make a few sensible assumptions and do a bit of math (you have been warned):
1. How many OS sims are there actually?
When the new OS sims where introduced in spring this year the Second Life grid had about 14,600 islands. By the end of October this number will be 27,000, an increase of more than 12,000. Considering the popularity of OS sims, there may well be up to 10,000 of them on the grid by now.
2. How much revenues is Linden Lab generating from those OS sims?
Assuming roughly 10,000 OS sims, Linden Lab is currently generating monthly revenues of US$750,000 from those sims (note 1).
3. What would happen if Linden Lab lost 50% of all those OS sims as a result of the new pricing structure?
Obviously, the effect of the new pricing structure and the adjustments to it will be felt over a certain period of time, probably up to 6 months. Let’s think a little about Linden Lab’s revenue development over this period of time by making a few simplifying assumptions:
If Linden Lab had kept their pricing policy unchanged, they had 10,000 OS sims generating US$4,500,000 over 6 months (note 2).
If Linden Lab loses half of those OS sims as furious estate owners leave the grid and simply abandon their sims at the beginning of January Linden Lab’s revenue will fall to US$3,750,000 (note 3). This would be a shortfall of US$750,000.
However, abandoning those 5,000 OS sims frees up server capacity for either 5,000 new OS sims or 1,250 standard sims. Assuming that OS sims have fallen a bit out of favor, Linden Lab will now go and connect those 1,250 sims for a setup fee of US$1,000 each. In addition, Linden Lab will generate tier revenue of US$295 per month from those newly connected sims.
How much tier revenue Linden Lab can generate in the first 6 months that we are looking at depends on how fast they can sell the freed up capacity. Looking back in time, Linden Lab connected about 500 islands every month between October 2007 and March 2008. Let’s be conservative, and assume they can connect the freed up server capacity at 250 sims per month.
Looking at our 6 months following the price increase Linden Lab would generate revenues of US$1,250,000 in setup fees and US$1,106,250 in tier revenue selling the abandoned capacity over this period of time (note 3), which together is US$2,356,250 to offset the initial shortfall of US$750,000.
Let’s compare:
LL’s total OS-related revenue H1-2009 under the old OS policy: US$4,500,000
LL’s total OS-related revenue H1-2009 under the new OS policy + resell: US$6,106,250
Or in (hopefully) plain English: Even if Linden Lab lost half of all their OS sims as the result of their price increase, they would still end up with more than US$1,600,000 more revenues after 6 months since they can simply reconnect existing server capacity as standard sims. (They would even be up in the first quarter already)
Even more dramatically, if we believe that Linden Lab can actually connect 500 standard sims per month (which they did historically), they would still make more than US$600,000 additional revenues in the first 6 months after the introduction of the new pricing policy, even if people would suddenly simply abandon 90% of all OS sims. (Again, they would be up in the first quarter, too)
So where does these leave OS estate owners?
Firstly, although the real world mechanics will be more complex than the simple scenario above, the simple message is clear: Whatever you as an OS estate owner decide to do, in the end Linden Lab will not be bothered too much financially if virtually all OS sims would be abandoned by their owners.
Secondly, the price increase will very likely break a number of OS business models of profit-oriented estate owners. As a result, Linden Lab will probably end up with a more consolidated, better capitalized and more professional customer base as OS estate owners may decide to leave the market by either abandoning or selling to larger estate holders with sufficient time and capital.
In addition, the Linden Lab will operate higher margin products (standard sims) and can probably save customer service costs on top of it (It’s cheaper to deal with 20 people owning 500 sims each than dealing with 500 people owning 20 sims each…).
This is not a bad position at all for Linden Lab to be in when entering into an RL economic recession.
What should infuriated OS estate owners do?
On your business: Sit down and do the math to see what prices you need to charge the people that are on your land to make your efforts worthwhile. Communicate these prices to those people and see over the next few weeks if they can do this. Also see if they would be willing to transfer to a standard sim if you could convert your OS sims.
If you come to the conclusion that it doesn’t work for you anymore, find out if there is anybody out there that is willing to take over your sims. And it nothing helps it might well be the best business decision to cut your losses and give up.
This is what you probably want to do with Linden Lab:
Well, accusing Linden Lab in the Second Life forums or blog of doing something “illegal” or “breaking the contract” or asking to “give me back my money” is simply retarded and childish. Also, as shown above, threats to abandon OS sims are a waste of time as this will simply have no lasting impact on Linden Lab’s revenues and profits.
Instead, try to focus on what could actually work for both Linden Lab and you, keeping in mind that Linden Lab really believes that they are not make enough money from OS sims.
The best way to do this is probably not staging in-world cartoon protests or messing around with SL groups.
Rather, people that hold a larger number of OS sims should connect in RL to represent a few thousand OS sims, agree on 2-3 clearly defined realistic points that they want Linden Lab do to keep them as customers, and communicate those points to Linden Lab directly in RL.
On such point could be free conversion of 4 OS sims into a standard sim. If you have only 2 or 3 OS sims, suggest that you can acquire the “missing” sims you might need to convert for a discount. I’m sure that you have some ideas.
After all, even an upset customer is still a customer, whereas a new customer is a customer that is not yet there.
(note 1) 10,000 sims x US$75 old tier fee
(note 2) 10,000 sims x US$75 old tier fee x 6 months
(note 3) 5,000 sims x US$125 new tier fee x 6 months
(note 4) Calculations revenues Jan-Jun-09:
Setup fees: 1,250 sims x US$1,000 = US$1,250,000
Tier fees of January connections: 250 sims x US$295 x 5 months = US$368,750
Tier fees February connections: 250 sims x US$295 x 4 months = US$295,000
Tier fees March connections: 250 sims x US$295 x 3 months = US$221,250
Tier fees April connection: 250 sims x US$295 x 2 months = US$147,500
Tier fees May connections: 250 sims x US$295 x 1 months = US$73,750
Tier fees Jun connections: All free capacity sold
IntLibber Brautigan
Nov 8th, 2008
Max, This sort of analysis, while looking good on paper, is as retarded as when Edward Longshanks said, “The problem with Scotland is it’s full of scots.”
Its the sort of logic one expects of Pol Pot, of concentration camp superintendents calculating the cost of bullets versus poison gas.
Corsi Mousehold
Nov 8th, 2008
You know out of all the arguments I have ever read over … This is most likely the number one comment that looks like it came from a Linden?
One thing you are missing. If everyone keeps their Openspaces, Linden Labs will still connect 250 to 500 sims monthly. Plus there is a cost to Linden Labs for having to upkeep and service Servers that are not being used so they still lose some money. They will take a hurt if everyone abandons.
Now will this ‘fix’ the mainland? No. What can Linden Labs do to fix the mainland? Simple.
Stop letting parcels that are showing for sale on a Private island be seen in Search. One move … Done. Two years ago things were like that and the mainland flourished and Mainland land was a cherished. The SECOND they allowed PRIVATELY owned sims to show is land for sale … The Mainland started to get killed off.
Here’s the difference in Mainland and privately owned sims. And why no one wants mainland land anymore.
Mainland … 300 Lindens for thousands of sims.
Private sim … Ten Estate managers, 1 owner, private groups for info, and group officers to help residents for generally less than 50 sims. Most of the time less than ten.
Linden Labs is getting out done by customer service and is even making it EASY for people.
Now a second decent solution for this is as well to have the Mentors group support Helpchat again that used to be in the Help drop menu in game. Mentors are unpaid. And most of the time they have little to do. So give them something to do. Link the Mentors group to a Helpchat.
Now you give the average resident a place to get help with what they need. And at zero monthly cost to Linden Labs except maybe one or two employees to monitor things.
One move and you solve the entire mainland up for sale. Two moves and you make the entire grid happy. You will take away the Landbarron mentality of owning a private sim and put it back on the mainland where it should be.
The other land barrons can scream that it’s a bad idea but eff that.
Alyx Stoklitsky
Nov 8th, 2008
Intlibber, If you’d ever been to Scotland, you’d know that “The problem with Scotland is it’s full of scots.” is entirely true.
Jahar Aabye
Nov 8th, 2008
Contra what Corsi said, this is one of the few essays on the topic that looks like it was written by someone with a firm grasp of economics, accounting, and public policy.
That being said, the one thing that it does leave out is the potential economic activity generated by the content creators currently operating on OpenSpace sims. So there is that opportunity cost to factor into the equations, and it’s not one that is easy to quantify. However, since there are still plenty of established content creators operating on full-prim sims, it would be likely that the demand would simply shift to them. For that matter, there would likely be plenty of rental space open on full-prim sims for the content creators who are currently on OpenSpace sims to move into.
The businesses that are most likely to be hurt by this are really the land rentals. However, since Linden Labs is also in the land rental business, I mean that’s literally their main source of income, they aren’t too upset about that. Furthermore, since land rentals don’t involve value-added commodities (that is, they rent and sublet, whereas content creators are actively creating wealth), it’s also less of a hit to the in-world economy, although admittedly macroeconomics function somewhat differently in the Lindex world.
Prokofy Neva
Nov 8th, 2008
Whenever the Lindens do something, you can be sure that their bean-counters have run the math and decided that the math is advantageous to them.
But I don’t think that math takes the form of actually discouraging the OS sims. I think they definitely want to encourage them, because they see them as ideal to bring in growth, as follows:
o people are willing to spend $325 on an i-Phone like purchase, but not $1000 on a used-car- or new-sofa-like purchase
o people want their own land, free and clear of landlords who may stiff them or overcharge them or not log on, they want Linden overlords
o people with their own land do not create customer service needs, as they can reset their sims, which is the widest form of customer complaint, and also see their top scripts to remove laggy scripts
o the Lindens need to get rid of the landlord class as it is taking money that the Lindens could be getting. They have a staff of 300. Many of them are CS-dedicated. The system has gotten more and more efficient.
I think in fact the Lindens will see a growth in new OS sales right now, as people hurry to buy them at $250 before they go up to $325. The tier of $125 for an enduser is trivial, frankly, and it’s only rental agents trying to run 100 of them and re-rent them for $150 that find it a huge thing to swallow.
I don’t think you can assume that if they get abandoned OS sims that converting them to full-fledged islands will sell. there may be some institutions and endusers who’d rather have the 15,000 prims and the sturdier capacity for running scripts, but they are then faced with trying to get rentals off the $295 fee — very hard, unless you have very high-end specialized or themed content.
The Lindens will also likely restart mainland auctions soon, because they will see OS owners flocking back to mainland and that will raise mainland prices again, and they will want to gutter them again to keep very brand-new poor newbies buying parcels.
I don’t think the Lindens will de-grandfather the mainland $195, no matter how much Intblubber blubs that it is a “subsidy,” because they need an incentive to sell $3000 sims off the auction — and that’s the incentive. It’s the smart thing for them to do in this coming worse recession year.
They will, however, de-grandfather island tiers, as there is no earthly reason to keep that handout going — those who are stiffed then will either dump their island, resell it to larger and more aggressive land barons, or move to OS sims that appear cheaper/more rentable.
Bennie
Nov 8th, 2008
“of concentration camp superintendents calculating the cost of bullets versus poison gas.”
Godwin’s Law.
You just lost 99% of value to your words dude. Shame, you seemed kinda intelligent in what I seen before.
Jen
Nov 9th, 2008
RE: The Mainland remark by Corsi…
Really, who CARES about the stupid mainland!? Let the mainland ROT. It is a chaotic lagfest filled with griefers, trash, rotating ads, and patchwork-quilt parcels. Land “owners” have no real control beyond ban lines of the place.
RE: OS sims
Boo-hoo-hoo. Where was all the weeping and concern when Linden Lab unleashed these on the grid and finding a renter for a private island became near impossible?
Typical comment from prospective renter – “Why should I pay you that much when I can rent on an OS sim for 1/4 of that?”
So, cry me a river. Lindens told you it was for open space and you turned it into vast rental holdings. You don’t deserve one iota of sympathy, in my opinion.
The only mistake the Lindens made was not to limit Open Space sims to a very low number of Avatars and nip the rental empire thing in the bud before it started.
Sinden Lucks
Nov 9th, 2008
“It seems that OS sims turned out to be much less of a success to Linden Lab when they compared the profit and loss statement with that of standard sims. Apparently, on a like-for-like basis the average operating costs of OS sims are considerably higher compared to standard sims which turns an OS sim into a lower margin product for Linden Lab.”
You have no clue what you are talking about. Linden has filled people with their garbage about what it takes to host sims for so long they have you fooled as well. Fooled with this class4 class5 mumbo jumbo.
Linden over charges by around 1000 percent for the service they have. And there will be no articles that will suggest otherwise to me. The only reason Linden can even sell space at “ALL” in the capacity they choose to sell it is because people have a notion to profit off of Lindens service as hosting resellers. That is it for a majority.
But in terms of your presumption that it is more of a load, more resources requried etc.. for open space is plain retarted. Linden is not making “WHAT THEY CAN MAKE” is the issue and they continue to choose to run people out of SL with insisting their rates are just. They are not,
If you don’t know what your talking about in terms of hosting and resources, what is required to host simulators, you would be better off not writing articles about it. I assure you the only reason for the increase is that Linden plays a foul game. They are charging the sim leasers for all the bandwidth and resources the non users are using,
and guess what, most are non service leasers. So continue to pay for avatars coming to your sim. It will only become worse in the future.
For every avatar that joins SL and uses resources, the leasers of the space within SL will be guaranteed to pay even more. So we can only hope that Linden continues to grow. Most do not lease within SL.
For those that have other purposes besides profit in SL, good for you.
PK Otoole
Nov 10th, 2008
“RL economy is on the brink of a recession”
Brink?! You must not live in the Northeast. I think it is safe to say we are well over the brink and heading toward the brink of a Depression.
Intlibber's Mother
Nov 10th, 2008
Shut up Intlibber. You suck with money, so what would you know? Been able to pay the money due for your 40+ sims? No? Oh well. Dont let your wallet run off.
Bubblesort Triskaidekaphobia
Nov 12th, 2008
Dear Mr. Proto,
Your journalistic skills are terribly lacking. Your grammar is terrible. Please, try to use complete sentences when you write for publication. For example, “And this is why:” is not a complete sentence. Your overuse parenthetical expressions exposes a profound lack of understanding of the nature of parenthesis. The following sentence is downright offensive: “Well, accusing Linden Lab in the Second Life forums or blog of doing something “illegal” or “breaking the contract” or asking to “give me back my money” is simply retarded and childish.” You should not throw the term “retarded” around like that. You are not only insulting the open sim owners who work so hard to run their sims, you are also insulting people who suffer from mental handicaps, their families and anybody who works in the mental health community. I have absolutely no idea what your closing sentence is supposed to mean.
This entire article is awkwardly written and poorly thought out. To fix this problem I would recommend that you read “The Little, Brown Handbook”.
http://www.amazon.com/Little-Brown-Handbook-Ninth/dp/0321103505
Your article is also poorly researched. You should put some more effort into at least getting some basic facts straight if you can’t be bothered to study the language. I will now bullet point some factual corrections for you.
1. Jack Linden said that there are 13,000 open sims, not 10,000. This miscalculation changes all of your numbers and effects your entire argument.
Please read the Linden Labs blog at this address: http://blog.secondlife.com/ You can find the Linden Labs office hours on the following page: http://wiki.secondlife.com/wiki/Office_Hours I recommend that you attend a few meetings and check your facts before writing further on what the company is and is not doing.
2. 5,000 abandoned open sims will not free up server space for another 5,000 open sims because Linden Labs will no longer be selling open sims. You would have known this had you read the Linden Labs blogs or paid attention to this issue at all over the past few weeks.
3. 5,000 abandoned open sims will simply mean more empty servers. Empty servers does not equate to another $1000 of setup fees plus another $295 per month in tier because if there is no demand then nobody will buy them.
There is a wonderful textbook on simple economics that I would like to recommend to you so that you can fully explore this concept further. It is called “Children in the Marketplace: Lesson Plans in Economics for Grades 3 and 4″ and can be found on the following web page: http://www.amazon.com/Children-Marketplace-Lesson-Economics-Grades/dp/1561833673/ref=sr_1_2?ie=UTF8&s=books&qid=1226470783&sr=1-2
4. You gave no explanation for why you assumed that only 50% of open sims would have to be shut down as a result of this policy. Why is your conjecture not higher or lower?
5. You are begging the question by assuming that the growth of Linden Labs grid will continue as it has in the past. Your assumption seems to be that this policy will not effect the market place for new sims at all. This is simply wishful thinking and begging the question. The only reason that they connected 500 open sims a month was because of the low prices of open sims. They can no longer continue at that pace because they will no longer be selling open sims. The increase in prices will also slow adoption of new homesteads dramatically.
I would like to recommend that you read a good book titled “Asking the Right Questions: A Guide to Critical Thinking”. It will help you to avoid common critical thinking pitfalls such as begging the question, wishful thinking, faulty data and so forth.
http://www.amazon.com/Asking-Right-Questions-Critical-Thinking/dp/0132203049/ref=sr_1_1?ie=UTF8&s=books&qid=1226472003&sr=1-1
6. You assume that open sim business owners are less capitalized and less professional than full sim owners. This is simply not the case. Full sim owners are less capitalized because full sims cost more money in tier. They have less business skill than the open sim business owners because they did not recognize this and purchase an open sim.
7. Your suggestion that open sim owners get together and own land together is simply not workable. The land market is notoriously riddled with what people call “drama”, making it difficult for multiple sim owners to work together like that. The egos involved in Second Life land are simply too big.
You write about Linden Labs margins as if you know what they are. If you do have access to such information then please cite it. If not then your claims about margins can and should be thrown out. If Open Life can offer 45,000 prims at $75 per month then why can’t Linden Labs do it? I doubt that Open Life is loosing money on that proposition. The obvious explanation seems to be that Linden Labs is gouging it’s residents.
There is an underlying assumption here that less sims will not hurt Second Life as a product. More sims means more content, which means that there is more to do in Second Life and more to purchase in Second Life. Every time a sim that is used closes the entire grid suffers from the lack of content. Less content will drive down the number of premium accounts further and cut down on the amount of commerce that happens in Second Life. This will cut deeply into Linden Labs margins in both the short and long run. Remember, according to Linden Labs, the problem with these sims is that they get too much traffic. This means that for every open sim that the new policy destroys more content that people use will also be destroyed.
Note, that I am not talking about ghost town sims that nobody ever uses. That might be the original intent of the open sims, but empty sims can close without effecting anybody. What I am referring to in this argument is the trafficked open sims.
In conclusion, I would like to urge you to do more homework before writing another article. If not for real journalists such as Pixeleen I would not continue to read your publication. If you take my suggestions to heart then I look forward to reading your next article.
~Bubblesort
2cents
Nov 12th, 2008
@Bubblesort Triskaidekaphobia
My brother has very funny retardation. My sister, she used to show her vagin to him, and say “You will never get this! You will never get this! La, la, la!” and he would sit in his cage and cry, and we all laugh. “You will never get this!”.
But then one time…he broke out of his cage, and he got this, and we all laugh. High five!
(PS: “You should not throw the term “retarded” around like that. You are not only insulting the open sim owners who work so hard to run their sims, you are also insulting people who suffer from mental handicaps”
Calling mentally handicapped people retarded is not insulting then?)
2 Cents
Nov 12th, 2008
“If not for real journalists such as Pixeleen…”
aRe YoU fUcKiNg SeRiOuS?
Wayfinder Wishbringer
Nov 12th, 2008
While I applaud Mr. Proto’s ability to step back and try to look at this matter fairly from both sides, I feel you’ve fallen far short in your analysis. While you have taken sheer economics into consideration, I believe we also need to consider the emotional and loyalty effect upon Linden Lab, as well as total damage to any veneer of trust they may have had left. Here are areas which also need to be considered:
* The statement that it costs LL more to operate OSS than full sims appears to have no factual basis. They draw in the same amount of money per server box. For the most part, such service is automated. While the sheer number of sims may require a little more support manpower, I think at $1,200 per server box per month (16 sims to a box), they can likely afford to hire a few employees to support such a highly lucrative product.
* The above economic analysis, while technically correct, takes into consideration ONLY the pencil-to-paper economic side. Yes, at a 67% price increase Linden Lab could afford to lose 40% of its Open Space customers and still break even. That might seem like a wise move on their part. However, it fails to take into consideration the damage to their customer base overall… the the consequences of alienating thousands of customers.
* What has totally failed to be considered is the quickly-approaching competition. Thus far Second Life has been a virtual monopoly, enabling Linden Lab to pretty much charge whatever they can gouge the customer out of (and they have). But that status is quickly ending. We already have the Open Grid project. That project is in its development / infancy stage, but already it is developed enough to support avatars, inventory, building and yes, even sales. There is a lot of work yet to be done… but that work IS being done.
According to Open Grid stats, they have had a sudden recent surge in sim orders, so many in fact they’ve had trouble keeping up with them. That’s bad news for Linden Lab; it means people are starting to consider alternatives. My group would likely have waited another year or two before looking further into Open Grid. But because of LL’s Open Space fiasco– we just purchased an Open Grid sim and are preparing for migration… as are many other groups. I know of three large groups already that are preparing to migrate to Open Grid– and I by far do not know all that are planning to do so. While this may seem like a small number, trickles often become roaring rivers.
* The above analysis completely ignores potential legal consquences to Linden Lab– and the very real fact that there is already one group that is preparing to take legal action against the company. There are potentially valid claims of “bait and switch” (and yes, all the elements appear to be there, so I’d say definintely an actionable case), fraud, breach of promise and breach of contract (a verbal or sales claim can indeed = contract according to U.S. business law).
* The alienation of customers extends much wider than merely that of OSS owners (in my own group, one person owns our OS sims… but 1,600 members are affected by this decision). Alienating customers is NEVER a good idea.
So bottom line, economics are not the ONLY thing to be considered here. The damage and consequences to Linden Lab are likely to be far greater than either they or this blog has taken into consideration.
For additional reading and prediction of overal impact upon the Second Life experience:
ELF CLAN RESPONSE TO LINDEN LAB
http://elfclan.ning.com/profiles/blogs/response-to-linden-lab-oss
OPEN SPACE SIMS– THE FACTS TO DATE
http://elfclan.ning.com/profiles/blogs/open-space-sims-the-facts-to
MAJOR SECOND LIFE CODING SNAFU
http://elfclan.ning.com/profiles/blogs/major-second-life-coding-snafu
other grids
Nov 14th, 2008
Just to comment on Open Grid, let’s not forget that there are many others working on grids as well. Open Grid, OS Grid, etc.. There are many grids. However, there are more working in the background and not advertising. You might be surprised in what you find in the next year or two. Peer to peer networking in terms of the grid to grid is going to do well in the next couple years.
2 cents
Nov 14th, 2008
As the U.S. and Global economies go – so does the virtual rip-off!
/
Multi-trillion dollar devaluation of retirement accounts. About 70% of working Americans have some sort of retirement savings. Many see balances less than half of what they had in Dec ’07/Jan ’08.
Job losses totalling more than 1 million and projected to approach 2 million in the U.S. – just this year alone.
Interest rates (= cost of money) are tanking worldwide. Even saving doesn’t pay anymore.
Personal Savings Rate (rate at which folks save a part of their after tax dollars) in the U.S. is not just zero but effectively NEGATIVE if you consider the lack of saving coupled with the huge amount of borrowing (money borrowed on second mortgages as one example) and now the evaporation of those previously perceived HIGH home VALUES which wipes out the 2nd mortgage VALUE.
Home values in the U.S. averaging 60 – 70% of what they were at the most recent peak; some markets experiencing a greater than 50% drop in value since ’05.
Price of OIL on the slide and projected to hit as low as $30 to $40/barrel in the coming months.
The cost of war = approx. 10 Billion/month to the United States – just for Iraq.
/
~ all in all ~
/
The perception of WHAT is VALUABLE is dramatically changing worldwide.
You’d best re-think your strategy of where to put your money!
You’d best re-evaluate what constitutes VALUE in entertainment and discretionary spending!
You’d best get back to basics and ditch the virtual bullshit!
You’d best GET REAL
and get a f’n grip!
/
/
Linden Research will fail in 2009
Bank On It…
(that last bit was a PROTIP btw)