Lockheed-Martin's "Real Target Market"

[shivers9 1,174]

Your lawyer? You asked a lawyer if it was OK to purchase P3D? :huh: Or am I missing a joke here?

Yes it is a joke!! LOL ....but in reality for all of those who worry about the black choppers showing up if they use Prepar3D then there is a hint in there. To be clear....there is no law or rule or regulation written any where on planet earth that stops a person from saying that he is a developer or even a "Professional Simulator Pilot". Both titles meet all qualifications for using Prepar3D in your home or anywhere else. It is just another way of saying.....come on guys and relax and enjoy the great things that LM are sharing with us simmers.

Don't you think the $4,075,972 contribution to candidates and the $14,581,800 paid in lobbying in the US might have more to with them "feeling warm and fuzzy"?

 

Anyway some people may think Lockheed Martin, and the taxpayer, shouldn't be spending  money on  games for simmers?

If you think it is hard to find a job now then let's stop and the Defense contracts and just sell Al Gore's windmills and solar panels. Then lets see what that does for the employment numbers.

[mgh 89]

Gerry, please drop the political aspects before I have to lock this thread entirely. :unsure:

 

I will to keep the thread running, but I don't accept my posts have any "political" aspects.

[Christopher Low 5,381]

Thanks for the clarification, Sam. I just wanted to be sure, because there are some people on this forum who probably would check with their lawyers first before purchasing P3D :wink:

[Alan_A 1,650]

So Lockheed Martin is wasting its money on contribution to candidates and lobbying?

 

 

 

Taxpayers may think spending its money on games for simmers is wasted. Anyway, in your experience, by how much will Lockheed Martin's revenue increase as a result?

 

Well, in the spirit of having a calm and, I hope, mostly factual and nonpolitical conversation (point taken, Fr. Bill!), a few points...

 

About political contributions and lobbying vs. public affairs and public relations - these activities aren't an either-or.  Big companies do both.  It's popular, and seemingly sophisticated, but actually a bit naive to think that companies buy votes on a sort of dollar-per-vote basis.  A politician may be well-disposed to a company as a result of a contribution but still has other things to think about, like getting re-elected.  All elected officials pay attention to letters and e-mails and polls.  Expensive defense hardware may be popular with voters but they're paid for with taxes, which aren't popular.  Also, there's more at stake than just appropriations - there are regulators to consider as well (think about foreign sales, which are highly regulated).  It's a complex dynamic and companies need to engage with it in many different ways, including direct appeals to voters.  That's why you see TV ads for defense companies even though you can't go out and buy their hardware.  It's too long to quote here, but it's worthwhile to have a look at the first section under "Risk Factors" in LM's most recent annual report, titled "We depend heavily on contracts with the US government."  It starts on page 9.  

 

Also - not every dollar a corporation spends connects directly to a dollar of revenue.  There are some things that corporations do as investments - research and development, for example.  Actually, a high return on R&D investment can be a bad sign - it might indicate that you're not taking enough risk of the kind that will produce better long-term return.  There are also things that corporations do that don't directly generate sales but that create a more favorable environment in which the sale can take place.  Public affairs falls into this category.  You can think of it as a form of advertising but it's also a form of insurance.  

 

Speaking of insurance - it's worth remembering that there are expenditures all of us take on that don't lead directly to an equivalent material value in our lives.  The money you spend on home insurance is, strictly speaking, wasted unless your house burns down.  If your house doesn't burn down, you've spent the money without getting anything back.  You buy insurance because it's relatively inexpensive compared to the very high expense involved in an unlikely but devastating event like a fire.  So you pay the premium as a reasonable cost of doing business.  Public affairs expenditures can be the same way - a small cost in the overall scheme of things that makes it a little easier for you to do business and that creates a reserve of goodwill if things go wrong.

 

In point of fact we don't know how P3D sits on LMs books, and we never will - it's way too far down in the operational weeds for them ever to have to report it publicly.  But there are several possible ways it could be set up so it makes sense.  It might be structured as an R&D expense - software development involving public betas on diverse systems - that produces some incremental revenue in the form of licenses, and therefore pays for part or all of the customer service costs.  Under those circumstances, the public licensing might run at a loss, but still produce value in terms of overall simulation software development.  In other words, it pays for part of its housekeeping and creates other value.  Or it could be treated as a public affairs expense - similar to flying an F-35 to an airshow, or sponsoring an exhibit at the National Air and Space Museum.  That would make it more like an insurance expense - but the software development operation would still get some value out of it.  

 

It could of course be structured in some other way entirely - I have no insight into it, this is all conjecture, but it's conjecture based on having seen companies in action.  What's likely - and this probably supports some of your points - is that LM's public sale of P3D licenses isn't something to be taken for granted.  I'd bet there was a lot of internal debate over whether to offer it to the public or not.  The argument against would have to do with the added cost of building a customer-support operation to deal with the public, which is not something LM ordinarily does.  So there's a lot of friction involved in stepping into a new kind of business and staying in it.  There were probably people who argued that the expense wasn't worth the gain in either reputation or having a grassroots testing environment.  

 

My own take is that it was a really smart move.  It seems uncommon now because most companies don't do this kind of thing anymore.  There's relentless shareholder pressure to think exactly along the lines you seem to suggest - connect every expense to revenue, quarter by quarter.  As a result, lots of long-term public affairs programs have gone by the boards.  Notice that Exxon-Mobil doesn't sponsor arts television like Masterpiece Theater anymore?  That's because they could no longer defend an investment that wasn't connected to their brand.  They still spend on philanthropy, but it's now focused on education, which ties to their activities in oil exploration.  Many companies have drastically cut back on reputation-building activities.

 

But not all of them have.  P3D is a small-scale example.  Boeing's $30 million investment in the rebuild of the Milestones of Flight hall at the National Air and Space museum is a bigger example.  Freight railroads are interesting to look at in this respect - they don't carry passengers but they do a lot of public-facing activities.  Union Pacific holds railfan events, and they're spendind a decent amount of money restoring a Big Boy steam locomotive to road condition.  In doing things like this, they're engaging in a classic form of corporate public relations.  And, although there's some opposition to this sort of thing, there's also support, including from some parts of the business and investment communities.  A lively debate is playing out right now about CEO compensation, with some very reputable people suggesting that rewarding CEOs largely on quarter-by-quarter performance harms long-term competitiveness, because they don't have enough incentive to plan or invest for the longer term.  Suggestions include tying compensation to performance over a three- or five-year horizon, and linking some part of compensation to investment, for example in R&D.  So those would be votes in favor of doing some things, including some public-facing things, that don't necessarily lead to sales tomorrow.

 

Again, it's a debate, not a settled issue.  Our discussion here probably parallels one that's happened inside LM.

 

Sorry to go on at such length, but rather than snipe, I thought it might be more productive to lay out a bit of support for my side of the discussion.  

 

Hope at least some members find it helpful.

[DarkstarF16 72]

Excellent paper. After reading your initial post which was attempting to deliver concepts that were not expanded upon it just ended up confusing. Just goes to show, when you have a point to make, don't take shortcuts.

[ICSimulations 2]

Bottom line is people comparing this to Fsx Steam addition and stating that LM P3D is for professional use only is wrong. This sim is our Fsx replacement.

[DarkstarF16 72]

If we have not taken the time to fully use each simulator that's currently on the market for say a months solid testing then we don't have the authority or knowledge to comment. Likewise, LM needed to go into the simulator business. The visionary that instigated that programme must have had convincing arguments and reasons. To a large extent it's the future, look at the sudden explosion in drone technology for example. That didn't suddelny appear, it was researched and developed and overlapping technology's made it possible. It's foolish to assume that LM went Into to the simulator business to make money in the traditional way this type of company operates. So why do it? And who are your customers? It's really the question Bill asked by instigating this thread.

We cannot argue that knowledge is power, and in order to investigate and throw up new ways of working maybe it's that simple, they needed to do it because the time was right. As a by product we, who love doing what we do, get a benifit from it too. Our goal, in general is to fly the simulator in as realistic a way as possible. When that realism is shattered we complain and rightly so. If that is the fault of the programme, then make it better and we feed that information back. Granted theirs a lot of noise but strip that away and it becomes usefull to someone. That's not beta testing that's simply pointing out what someone didn't notice. The concept of error free programming is the holy grail. As I posted out before. We are usefull in some way. The argument as to who makes a profit and who pays for it is immaterial. Theirs a bigger picture were simply missing. We're thinking corporate, profit, taxs blah blah blah... All that is a cloud of misdirection and we have to start thinking in new ways because clearly LM are. Maybe the beneficiaries of this programme is the security and a world where knowledge can prosper for the good of everyone. We're just not looking outside the window and seeing whatever it is out thir we need to see.

I'm stopping now as its 3am oops and I need to sleep before I smell the coffee.

[MarkRey 16]

"Prepar3D Proudly Welcomes Captain Sim"

 

Guess LM likes candy too 

[mgh 89]

 

 

Well, in the spirit of having a calm and, I hope, mostly factual and nonpolitical conversation (point taken, Fr. Bill!), a few points.

 

Unfortunately I've been warned not continue with this discussion so you'll have a free hand.

[Poppet 710]

 

 

Sorry to go on at such length, but rather than snipe, I thought it might be more productive to lay out a bit of support for my side of the discussion.  

Not at all Alan,  brilliant post, really well put together. 

[denali 74]

Boeing's $30 million investment in the rebuild of the Milestones of Flight hall at the National Air and Space museum is a bigger example.

. Boeing schmoeing. I still have to use an LM product to give my kid an idea ... you know, educate him ... of what it is like to use a McBoeings product. I think that's worth more than some brick and mortar in some obscure city. And as for LM being sensitive to criticism, there aren't too many companies that respond to criticism as effectively as them. They aren't making happy meals. I'd be willing to bet they have very rigid practices towards perfecting their responses.

Edited February 16, 2015 by n4gix
Removed doubled text

[Alan_A 1,650]

Unfortunately I've been warned not continue with this discussion so you'll have a free hand.

 

Gerry, you're a challenging fellow, and you and I have locked horns in the past, but for what it's worth, I don't think you were going in a political direction and would have been happy to continue discussing/debating.  Hope mods will take that into account.

 

 

Boeing schmoeing.

 

I'm inclined to agree, but from Boeing's perspective, many, many, many (many!) more people are going to see the Boeing name in the Milestones of Flight hall (that's the main entrance hall to the National Air and Space Museum, the one with the Spirit of St. Louis and Apollo 11 and all the other main artifacts) than will ever try out a flight simulator.  So to them it's money well spent.

 

To your point, I'm always surprised there aren't more museums making use of serious flightsim programs.  You'd think it'd be a natural way to give visitors a hands-on experience of the kind that museums in general like to provide.  But to my knowledge, very few have taken advantage of what's available in simulation.  Very odd.

 

I agree that LM is very, very good at putting a public face on their company.

[n4gix 4,955]

Unfortunately I've been warned not continue with this discussion so you'll have a free hand.

That was not precisely what was asked. I'll phrase it another way. I am asking politely to make certain that it doesn't stray into politics, not that you should not continue posting.

[raymar 969]

Kinda like herding cats. To be continued.

 

Lots of really off the wall viewpoints here. Nice reading for a change.

 

Thanks for the tread, FR Bill.

 

Regards,

 

Ray

[denali 74]

many, many, many (many!) more people are going to see the Boeing name in the Milestones of Flight hall

I think on the old model, where there isn't a ubiquitous virtual reality platform, and software is delivered in boxes, this holds true.  But there is a new paradigm coming very soon that is going to change this all.  I believe once virtual reality takes hold P3D, along with it's tail of immersion enhancing vendors, will be the goto software for flying immersion.  I believe VR is a game changer, and so does Microsoft.  Windows 10, DirectX 12, and the rush to get everyone to the new 3D viable model by free upgrades, is all about Virtual Reality, MS staking branding claim into as much of that space as possible. 

I've been in that museum 4 times in the past 10 years and I just don't remember that part of it very well, cause I couldn't take it home with me.  The immersion level was kinda low.  (Not dissing The Smithsonian, just respecting the truth)