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The amount of value you provide, less transaction costs, represents the maximum that you can charge for a product or service even if you are a monopoly (and the
by tc 18y ago
The amount of value you provide, less transaction costs, represents the maximum that you can charge for a product or service even if you are a monopoly (and there are no viable substitutes).
In a market economy, competition drives prices down towards the product's marginal cost to produce. Consumers then get to keep the 'excess' value delivered. The lower price also brings in consumers for whom the product delivers less value.
So when you have a product, like SSL certificates, where the marginal cost of production is nearly zero, it is fair to ask why the certificates aren't nearly free.
(And since the certificates are not free, and so the providers seem to be printing money, we have to ask how all of us missed out on this business.)
- nickf 18y agoAlthough the production costs are free, the maintenance costs (both short and long term) to make the certificates have any worth to purchasers is very significant.
- moe 18y agoWhat are those maintenance costs that you speak of?
- nickf 18y agoIgnoring wages, hosting, DR site maintenance, general business costs etc, the other maintenance costs I can see over other SaaS/webhosting/domain businesses (which are similar). mid $xxxxx/mo for CDN hosting mid $xxxxx startup for the hardware (you can't store keys on disk) mid $xxxxx anually for audit (thats the simple cost to get it done, nothing to do with performing it - manpower, expenses, recification of any issues) [Sometimes multiplied for various other compliancies/audits around the world] It's like this: Webhosting - you can pay $100 a year for mid-to-low-end hosting. You could probably do it yourself from your ADSL line, or a cheap co-lo, right? Save a few bucks. SSL - you can pay $100 a year. Or, unlike hosting/SaaS, even becoming your own domain-reg...you're looking at the above costs, plus waiting with your thumbs up your ass for 5+ years before you can do anything. Still paying, too. You could bypass the wait, shell out for the hardware and then pay 6-7 figures to get a subCA and issue immediately. Rip-off? Not as clearly as you think.