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Why doesn't the market handle this? If John Deere is only willing to sell lifetime licenses to operate their vehicles, thus putting the farmer at risk in ways

Why doesn't the market handle this? If John Deere is only willing to sell lifetime licenses to operate their vehicles, thus putting the farmer at risk in ways like you described, why do farmers still buy these "licenses"? Naively, they must represent some advantage (despite their shortcomings), otherwise John Deere wouldn't be able to sell these things.

Qworg 12y ago
Lock in and capital expense - the market is terrible at providing what is currently a financial service coupled with large equipment delivery. You need both halves - the sheet bending/engine manufacturing and the cash on offer to float the loan to the farmer. There's a lot of strength to being incumbent in both of these areas.
- icebraining 12y ago
  Why can't a manufacturer partner up with a financial company to provide the bundle?
  - Qworg 12y ago
    They can and do at the low end, but the upper end market is dominated by Deere and a few others in a way that is hard to understand. The manufacturer has to have the deep pockets and stomach for a protracted battle - lots of folks "bleed green" and will only buy Deere. Deere is everywhere in the countryside - big marketing campaigns. Deere and others also have large dealer networks. That is where the sales are made. Many of these dealers have been around for a really long time and have all of the customer access. You'd have to break into the network somehow. You'd have to not only be able to make it, but have the cash on hand to sustain more than a few years of incredibly low sales and lack of distribution.
    - sologoub 12y ago
      Also, don't forget that this is a relatively new development in situation. Historically, Deere has been a very reliable brand-name for farmers. Long term, they may do significant damage, but it will take time to erode the built-up good will.
toufka 12y ago
John Deere was the Apple of tractors, 20 years before Apple was Apple. It's killed off all the competition [1] for their tractors' ability to "just work" - even at a premium. Deere coupled high quality hardware with high quality service, whereas most other tractors tried to compete on cost by dropping one. Apple vs HP; Deere vs Case. It served them well in the long run, if made things dicy early on. There is no competition any more. And the development lead and capital required to compete with their machines, and their repair/distribution network is immense. [1] http://www.tennesseetractor.com/assets/Uploads/jd-timeline.jpg http://www.tennesseetractor.com/assets/Uploads/jd-timeline.j...
- zzalpha 12y ago
  Put slightly more technically: there are natural barriers of entry to the marketplace that make it tough for a disruptor to displace a incumbent monopolist (or in this case oligopolist... Deere basically splits the market with a few other competitors, all of whom collude on this issue).
  - wmeredith 12y ago
    Would this be considered cartel behavior?
- ghshephard 12y ago
  One hopes that if farmers really care about this, then JD's competition (http://seekingalpha.com/article/2523975-john-deere-versus-the-competition http://seekingalpha.com/article/2523975-john-deere-versus-th...), will dive in and start providing an alternative, at a profit. We'll see if farmers really care about this though, or whether it turns out to be something like "Replaceable Batteries" or "SD Flash slots" on smart phones.
- metasean 12y ago
  If John Deere is the Apple of tractors, then Open Ecology is the Linux of tractors. - http://www.ted.com/talks/marcin_jakubowski http://www.ted.com/talks/marcin_jakubowski - http://opensourceecology.org/wiki/LifeTrac http://opensourceecology.org/wiki/LifeTrac
MRSallee 12y ago
It sort of is. The Wired article mentions that some farmers are preferring to buy old tractors without the electronics. This demand increases the value for the used market and should depress the value of new tractors. There will likely be a growth in the business of maintaining old tractors and, potentially, enough public awareness of the benefits of tractors without electronics that another manufacturer can step in. Or it might fizzle. Markets don't solve every problem, but they usually solve the problems people are willing to pay for.
- Kluny 12y ago
  Maybe tractor hacking will become a thing, too. I know lots of guys who circumvent the computers in their cars with pirated software, to make them racier. Might be a career in it for some of them.
  - galago 12y ago
    Recreational farmers probably do/will. However, its more problematic for farms functioning as a business.
  - redblacktree 12y ago
    I've recently become interested in this, since I bought a 2015 vehicle with a computer in the console. Do you have any advice/resources for a budding car hacker?
    - dublinben 12y ago
      The best way to start is to not buy a vehicle with a hundred proprietary computers in it.
      - a3n 12y ago
        How do you search for and verify one of those vehicles without a computer? Also, I haven't bought a new car in many years. Is there something like a EULA buried in the small print? And I don't imagine buyers on the secondary market sign anything. Or will it become illegal to sell used cars because the software license doesn't allow for transfer?
Vraxx 12y ago
That still leaves all the people who currently own licenses to tractors instead of tractors with poor prospects. Suddenly they are forced with the decision of putting up with John Deere's BS or investing in a whole new tractor. And that is if this wonderful market solution were to spring up tomorrow. That goes without saying that this issue is bigger than the tractor market. Car manufacturers are hopping on board and there are even fewer options for cars without protected computers in them. This issue is only getting more pressing as more daily objects become integrated with computer systems.
roel_v 12y ago
The market handles this just fine, and shows us that in practice, this is not the problem armchair-lawyer nerds are making it out to be. The whole OP is disingenuous - the issue is not who 'owns' the tractor. The issue is with the licence of the software that runs it. That doesn't change anything about the ownership of the tractor. Shoddy reporting, designed to appeal to the prejudices of their audience.
- c22 12y ago
  The entire point is that this dichotomy seriously blurs the lines of "ownership" in new and potentially harmful ways.
emodendroket 12y ago
The benefits are not relevant to small farmers, who do not have enough economic power to really matter.
mariodiana 12y ago
Are there regulatory barriers for entering the market for producing farm tractors? That's the first question I would ask, if I were wondering why doesn't the market handle this.
bsbechtel 12y ago
It most likely will, but it takes time. Product cycles for ag equipment are similar to the auto industry - new models every year, but major model overhauls every 4-5 years. That means it'll really take 10-15 years before the market really adapts to the demands of the customer. This technology is only a few years old.
Nelson69 12y ago
It seems there is more backstory here that is missing from the article. Maybe a better question is, why don't all the auto companies, which already cooperate and "collude" on a lot of things, have similar licenses? There are little niche markets for modifying the software in cars, they even make movies about it. If there is some sort of financial protection to the manufacturer, I'd think they'd do similar things for certain cars, perhaps the ones that don't have performance enthusiasts, like minivans or something. I can think of some very real reasons where a company like Ford or Toyota would like to make sure you only use "sanctioned parts" for repairs and DRM could help them to verify that other parts aren't usable; they don't seem to be doing that though. I'm just guessing here, but I know Deere produces some fairly sophisticated software that takes over head photos of crops and they have various services that offer advice on how to best farm different parts of a farmer's land. Some of that software interacts with their farm equipment (like it can signal the onboard software to maybe work more slowly in particularly dense parts of a crop and stuff like that.) I could see them trying to somehow protect that software investment and treat it as a lock-in where the device owners may want to use that service with other brands of equipment or something. From what I gather, it's a non-trivial amount of software that they've built that has some significant value.
- copsarebastards 12y ago
  > Maybe a better question is, why don't all the auto companies, which already cooperate and "collude" on a lot of things, have similar licenses? They do. The difference is that farmers are far more likely to attempt a fix on their machine than the average car user. Also, since farmers use their tractors more than the average user uses their car, a tractor is part of a system, while a car typically is the system. As such, there are a lot of parts to integrate with and as a result, more places where the system can break.
copsarebastards 12y ago
> Why doesn't the market handle this? > If John Deere is only willing to sell lifetime licenses to operate their vehicles, thus putting the farmer at risk in ways like you described, why do farmers still buy these "licenses"? Because John Deere has a monopoly. > Naively, they must represent some advantage (despite their shortcomings), otherwise John Deere wouldn't be able to sell these things. Yes, that is naive. If you look to capitalism to solve the problems of people at the bottom, you'll almost always be disappointed.

Qworg 12y ago

Lock in and capital expense - the market is terrible at providing what is currently a financial service coupled with large equipment delivery. You need both halves - the sheet bending/engine manufacturing and the cash on offer to float the loan to the farmer. There's a lot of strength to being incumbent in both of these areas.

icebraining 12y ago
Why can't a manufacturer partner up with a financial company to provide the bundle?
- Qworg 12y ago
  They can and do at the low end, but the upper end market is dominated by Deere and a few others in a way that is hard to understand. The manufacturer has to have the deep pockets and stomach for a protracted battle - lots of folks "bleed green" and will only buy Deere. Deere is everywhere in the countryside - big marketing campaigns. Deere and others also have large dealer networks. That is where the sales are made. Many of these dealers have been around for a really long time and have all of the customer access. You'd have to break into the network somehow. You'd have to not only be able to make it, but have the cash on hand to sustain more than a few years of incredibly low sales and lack of distribution.
  - sologoub 12y ago
    Also, don't forget that this is a relatively new development in situation. Historically, Deere has been a very reliable brand-name for farmers. Long term, they may do significant damage, but it will take time to erode the built-up good will.

toufka 12y ago

John Deere was the Apple of tractors, 20 years before Apple was Apple. It's killed off all the competition [1] for their tractors' ability to "just work" - even at a premium. Deere coupled high quality hardware with high quality service, whereas most other tractors tried to compete on cost by dropping one. Apple vs HP; Deere vs Case. It served them well in the long run, if made things dicy early on. There is no competition any more. And the development lead and capital required to compete with their machines, and their repair/distribution network is immense. [1] http://www.tennesseetractor.com/assets/Uploads/jd-timeline.jpg http://www.tennesseetractor.com/assets/Uploads/jd-timeline.j...

zzalpha 12y ago
Put slightly more technically: there are natural barriers of entry to the marketplace that make it tough for a disruptor to displace a incumbent monopolist (or in this case oligopolist... Deere basically splits the market with a few other competitors, all of whom collude on this issue).
- wmeredith 12y ago
  Would this be considered cartel behavior?
ghshephard 12y ago
One hopes that if farmers really care about this, then JD's competition (http://seekingalpha.com/article/2523975-john-deere-versus-the-competition http://seekingalpha.com/article/2523975-john-deere-versus-th...), will dive in and start providing an alternative, at a profit. We'll see if farmers really care about this though, or whether it turns out to be something like "Replaceable Batteries" or "SD Flash slots" on smart phones.
metasean 12y ago
If John Deere is the Apple of tractors, then Open Ecology is the Linux of tractors. - http://www.ted.com/talks/marcin_jakubowski http://www.ted.com/talks/marcin_jakubowski - http://opensourceecology.org/wiki/LifeTrac http://opensourceecology.org/wiki/LifeTrac

MRSallee 12y ago

It sort of is. The Wired article mentions that some farmers are preferring to buy old tractors without the electronics. This demand increases the value for the used market and should depress the value of new tractors. There will likely be a growth in the business of maintaining old tractors and, potentially, enough public awareness of the benefits of tractors without electronics that another manufacturer can step in. Or it might fizzle. Markets don't solve every problem, but they usually solve the problems people are willing to pay for.

Kluny 12y ago
Maybe tractor hacking will become a thing, too. I know lots of guys who circumvent the computers in their cars with pirated software, to make them racier. Might be a career in it for some of them.
- galago 12y ago
  Recreational farmers probably do/will. However, its more problematic for farms functioning as a business.
- redblacktree 12y ago
  I've recently become interested in this, since I bought a 2015 vehicle with a computer in the console. Do you have any advice/resources for a budding car hacker?
  - dublinben 12y ago
    The best way to start is to not buy a vehicle with a hundred proprietary computers in it.
    - a3n 12y ago
      How do you search for and verify one of those vehicles without a computer? Also, I haven't bought a new car in many years. Is there something like a EULA buried in the small print? And I don't imagine buyers on the secondary market sign anything. Or will it become illegal to sell used cars because the software license doesn't allow for transfer?

Vraxx 12y ago

That still leaves all the people who currently own licenses to tractors instead of tractors with poor prospects. Suddenly they are forced with the decision of putting up with John Deere's BS or investing in a whole new tractor. And that is if this wonderful market solution were to spring up tomorrow. That goes without saying that this issue is bigger than the tractor market. Car manufacturers are hopping on board and there are even fewer options for cars without protected computers in them. This issue is only getting more pressing as more daily objects become integrated with computer systems.

roel_v 12y ago

The market handles this just fine, and shows us that in practice, this is not the problem armchair-lawyer nerds are making it out to be. The whole OP is disingenuous - the issue is not who 'owns' the tractor. The issue is with the licence of the software that runs it. That doesn't change anything about the ownership of the tractor. Shoddy reporting, designed to appeal to the prejudices of their audience.

c22 12y ago
The entire point is that this dichotomy seriously blurs the lines of "ownership" in new and potentially harmful ways.

emodendroket 12y ago

The benefits are not relevant to small farmers, who do not have enough economic power to really matter.

mariodiana 12y ago

Are there regulatory barriers for entering the market for producing farm tractors? That's the first question I would ask, if I were wondering why doesn't the market handle this.

bsbechtel 12y ago

It most likely will, but it takes time. Product cycles for ag equipment are similar to the auto industry - new models every year, but major model overhauls every 4-5 years. That means it'll really take 10-15 years before the market really adapts to the demands of the customer. This technology is only a few years old.

Nelson69 12y ago

It seems there is more backstory here that is missing from the article. Maybe a better question is, why don't all the auto companies, which already cooperate and "collude" on a lot of things, have similar licenses? There are little niche markets for modifying the software in cars, they even make movies about it. If there is some sort of financial protection to the manufacturer, I'd think they'd do similar things for certain cars, perhaps the ones that don't have performance enthusiasts, like minivans or something. I can think of some very real reasons where a company like Ford or Toyota would like to make sure you only use "sanctioned parts" for repairs and DRM could help them to verify that other parts aren't usable; they don't seem to be doing that though. I'm just guessing here, but I know Deere produces some fairly sophisticated software that takes over head photos of crops and they have various services that offer advice on how to best farm different parts of a farmer's land. Some of that software interacts with their farm equipment (like it can signal the onboard software to maybe work more slowly in particularly dense parts of a crop and stuff like that.) I could see them trying to somehow protect that software investment and treat it as a lock-in where the device owners may want to use that service with other brands of equipment or something. From what I gather, it's a non-trivial amount of software that they've built that has some significant value.

copsarebastards 12y ago
> Maybe a better question is, why don't all the auto companies, which already cooperate and "collude" on a lot of things, have similar licenses? They do. The difference is that farmers are far more likely to attempt a fix on their machine than the average car user. Also, since farmers use their tractors more than the average user uses their car, a tractor is part of a system, while a car typically is the system. As such, there are a lot of parts to integrate with and as a result, more places where the system can break.

copsarebastards 12y ago

> Why doesn't the market handle this? > If John Deere is only willing to sell lifetime licenses to operate their vehicles, thus putting the farmer at risk in ways like you described, why do farmers still buy these "licenses"? Because John Deere has a monopoly. > Naively, they must represent some advantage (despite their shortcomings), otherwise John Deere wouldn't be able to sell these things. Yes, that is naive. If you look to capitalism to solve the problems of people at the bottom, you'll almost always be disappointed.