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Message: To: DONI: Re: Message from a bean counter
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Feb 15, 2008 10:10AM
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Feb 15, 2008 11:56AM

Feb 15, 2008 03:56PM
1
Feb 15, 2008 04:04PM

Moo
Feb 15, 2008 06:35PM

If we supply the products directly to Airlines, as opposed to how we have sold in the past through digecor and Mezzo we get ongoing service revenue.

Product sales can be either direct (with service revenue) or through a middle man (with no service reveue)

We get the servie revenue based on the units already shipped, so last year when we were using a middle man we had no service revenue.

If we get X amt of mothly service revenue for every unit sold, then X goes up (monthly revenue) every time a unit is sold. At some point Service revenue can surpass hadware sales since the Service revenue is based on proir hardware shipments not current hardware shipments.

Kinda like a cell phone carrier who does not care about hardware margin or lack of as long as the montly charges made keep going up for units out the door.

In many current business models service revenue is what gets the big margins and the hardware is just the way to get to it. 

 

 

 

 

 

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