NYT Paywall Cost $40 Million: How? 305
An anonymous reader submits this musing from Philip Greenspun's blog: "Aside from wondering who will pay more than the cost of a Wall Street Journal subscription in order to subscribe to the New York Times, my biggest question right now is how the NY Times spent a reported $40-50 million writing the code (Bloomberg; other sources are consistent). Google was financed with $25 million. The New York Times already had a credit card processing system for selling home delivery. It already had a database management system for keeping track of Web site registrants. What did they spend the $40-50 million on?" Maybe the folks behind CityTime were free on weekends.
Re:Why? Rupert likes to keep money moving around (Score:5, Informative)
Re:Why? Rupert likes to keep money moving around (Score:5, Informative)
Re:Large organization doing something simple (Score:5, Informative)
Re:A simpler way. (Score:5, Informative)
You mean they're overbilling and using the overage to fund black ops projects like unmanned shuttles.
"You don't actually think they spend $20,000.00 on a hammer, $30,000.00 on a toilet seat do you?"
Having worked for the government, yes, I do. If it's a one off project. Or only a handful.
There's no "open market" for the government to allow to absorb research and development costs or to achieve economies of scale.
If you need a special inertialess (non-rebounding, not physics-violating) sparkless hammer that can be used in an explosive gas-filled environment, and you need, say, 3. The government will commission and buy 10. The initial development and testing costs all get rolled into the cost of those 10 hammers, no matter how many man hours and resources it takes.
And, having watched the USMC test a piece of equipment in a "shaker box" designed to imitate driving a HumVee over rough terrain, hearing the salesperson from the company say, "Oh shit, there's no way this is going to....." and watching the piece of equipment explode 6 seconds into the test, there's a lot of engineering involved in meeting weird military requirements.
Is there money hidden and wasted in there? Yes, probably.
Does that hammer really cost $20,000 to develop? Yes, probably.
$20k is cheap for a hammer (Score:5, Informative)
Supplier says "pay us $20k for a hammer and we'll throw in $15k of spare helicopter parts."
That's not how it works at all.
You want some helicopter parts thrown in? The military guys know to not even try that. That's not what happens at all. Everyone is covering their asses. If some military helicopter part fails, you can bet that the procurement chain will be examined. There has to be a paper trail for everything.
Supplier says "pay us $20k for your crazy over-spec'ed* hammer, and we'll jump through your stupid purchasing hoops, go through all kinds of extra work certifying things that have nothing to do with the performance of the item, fill out reams of unnecessary paperwork, send an employee to a special course so they can learn how to enter invoices in your arcane billing system (btw, commercial invoice ~1 page, government invoice ~30 pages), wait thirty days for our first billing to be rejected because of some minor issue (100% chance first billing is rejected, btw), submit corrected billing, wait 30 days for someone to tell us that the contract was shifted to another department and so it has to be resubmitted again (they knew 2 days after we billed them, but they're not required to respond until 30 days, so they don't), wait another 30 days to find that the billing was accepted, then wait 60 days for the payment to show up".
Many companies turn government business away, because the documentation requirements are onerous, the payment terms are ridiculous, and the project may be cancelled halfway through anyway.
*The requirements on military items would make your head spin. Making a tiny design change to a part to make it easier and cheaper to manufacture can trigger everything from having three government people sign off on the revised drawing all the way to having to run a live fire test at some proving ground where they strap your whatever it is to a tank and drive it around, attach it to whatever gun it's supposed to work with and fire 1000 rounds, or shoot at it, depending on what it is. All for a really minor change that was never going to affect how it worked in the first place.
You may think a $20k hammer is ridiculous, and it is, but once you see the paper and testing trail, it starts to look reasonable, assuming it's not an off-the-shelf-item (very few are). Now, if they're buying more than 10 hammers, that price had better come down, but for a one-off, $20k is a bargain. Heck, it'd probably win an award for cost savings.
Re:A simpler way. (Score:5, Informative)
Follow the money.
Someone is getting paid. Find out who and what that person's connection to the person signing off on that expense is.
Sure. But don't expect to always find some nefarious link. The world of bureaucracy is bigger than just corruption. Although bureaucracies do make a breeding ground for corruption and they become more unwieldy the more the system is adapted to eliminate corruption.
I've had a lot of direct experience dealing with government bureaucracy at various levels and organizations (and some experience with corporate bureaucracy). I've seen relatively simple tasks turned in to months-long projects and couple months worth of thorough effort turned in to a multi-year outsourced contract. This isn't because someone was getting a pay-off. This is because The System, of which every good Bureaucrat serves and follows, demands levels of effort far beyond anything anyone not serving The System would think sane. So while the tasks themselves can be simple, performing the tasks within the bureaucracy requires many more additional steps that require many more man-hours to accomplish.
I should stress that corruption can still rear its ugly head. I haven't viewed it very often myself. But I've dealt with rules that have come in to place to close a loophole exposed by someone who had figured out how to game the system and got caught doing so. There will be people that are gaming the system according to these new rules and the process will repeat itself (as well as the occasional case of someone who thinks they won't get caught doing something others got caught doing).