I have no idea how Digi-Key is interacting with Octopart, but I have been buying parts from them for a long time and have nothing but good things to say about them. I like the company so much that I called to see if they were public so that I could buy stock; they're not.
Although Octopart and its investors may be frustrated, it does Digi-Key a disservice to characterize it as "evil", not "good" or a company that isn't concerned with its customers - it is extremely concerned with customer satisfaction and I have been very pleased with every interaction I have had with it.
Sure it would be great if Digi-Key facilitated Octopart's objective, but that doesn't justify conflating it with the all-star "evil" hall-of-famers.
Personally, we don't view them as evil (or ourselves as good, for that matter). We have had good experiences ordering from Digi-Key as well. They have a lot of parts in stock and they ship things right away so we don't have any qualms with their service.
I think that what frustrates Paul is that Digi-Key is actively trying to block innovation in part search because they don't want price competition. Part search today is like travel search in 1995. I used to go straight to American Airlines to buy tickets and that was fine but how much nicer is it to buy tickets online now? I even travel more because it is easier to find things.
The only thing that Octopart is trying to do is make it easier for people to find parts and Digi-Key has said that they don't want that to happen. They have specifically told us that they don't want us to exist because they don't want price comparison. We keep Digi-Key on the site because it makes our users happy. You'll have to ask Digi-Key how getting rid of Octopart helps their users.
Digi-Key is certainly not the only ones in this space that doesn't want price comparisons. What about McMaster-Carr? Not a chance in the world they are going to open up their pricing and availability to an Octopart site. Why? Well, I can't speak for them (although I worked there for 2.5 years), but I would guess it's because they want to maintain control. I don't think that necessarily makes them evil, however, because control can mean controlling the customer experience for the better. In other words, perhaps someone could legitimately believe that Octopart is an inferior (non-innovative) approach to part search, and that allowing your products to be searchable via Octopart would confuse and hurt, rather than help, your customers.
Your comparison to travel is an interesting one, because despite Travelocity/Orbitz/Kayak/etc. some airlines (Southwest) can still only be searched via their site. Ironically (despite the recent fiasco) I would consider Southwest to be a very innovative, pleasurable-to-fly airline.
<blockquote>I would guess it's because they want to maintain control. I don't think that necessarily makes them evil, however, because control can mean controlling the customer experience for the better.</blockquote>
Any claim that the desire to maintain control is only for entirely selfless reasons should always be met with the highest suspicion, as would any other claims that something superficially self-serving is actually done for selfless reasons.
Note that 'highest suspicion' != 'immediate condemnation'.
It is always possible that the superficially self-serving motivation is not what is truly driving a decision, but it's usually the way to bet (and you can be sure that it doesn't hurt), most especially at the emergent organizational/institutional level, rather than the personal.
Part search today is like travel search in 1995. I used to go straight to American Airlines to buy tickets and that was fine but how much nicer is it to buy tickets online now? I even travel more because it is easier to find things.
It is definitely nicer to buy tickets, but the race to the bottom in pricing has made the flying experience itself (not just the airport) a misery. There are predominately two options - be miserable with everyone for whom price trumps all (see also Walmart) or spend much, much more for a decent experience. There is no choice of spending 20% more to have a 20% better experience.
So while I value the ease of search and the low prices it precipitates, I am concerned that price competition will force a decline (or a polarization) in customer service. And maybe it is unavoidable.
Like it or not the airlines have provided what the majority of customers want, low price. If most people wanted a great flying experience and were willing to pay more for it that is what you have seen. The way the industry exists today is just what the market dictated. If people care more about the experience of buying parts than the cost then you will see sites that factor in experience. Since the market seems to dictate that low cost is most important we see octopart being successful. Economics, plain and simple.
It didn't seem like all that much more evidence was required to refute your one piece of evidence that Digi-Key is evil because they don't want Octopart to list their prices.
Even if I had no evidence, my default assumption would be that they were good until confronted with significant evidence that they were evil. And between good and evil there's a nice-sized neutral middle area which it appears you have transited in one fell swoop based on your sole piece of evidence.
I'm not sure what other evidence of goodness you seek than customers' experiences with them. I have found their prices competitive - as another poster said - lower on some items and higher on others. They have treated me fairly. I don't believe that they are engaged in any immoral enterprises. I agree it would be nice if they cooperated with Octopart but to say that makes them evil is absurdly hyperbolic.
I can immediately think of some (non-evil) reasons for Digi-Key to prefer not to have Octopart include its pricing. It has invested in a web site which provides an excellent user experience and they would prefer not to make it easier for customers to use Digi-Key's web site as a reference manual for lower cost competitors (whether or not you believe this is inevitable). They would like to avoid doing business with customers who are concerned solely about price. They would like customers to purchase their higher-margin items based on past experience purchasing lower-margin items even though the higher-margin items might be cheaper elsewhere.
The problem was not so much how little evidence you supplied as how irrelevant it was. I expect Philip Morris has good customer service too. When convenience stores order cigarettes from them, they probably deliver reliably. Would you argue that that makes Philip Morris a good company, ethically?
Your theories about why Digi-Key wouldn't want their prices to be publicly known are very inventive, but Occam's razor suggests the explanation is what is usually is in such situations: They are trying to suppress competition.
I really don't want to make any more comments, because I'm sure they are equally irrelevant. However, since I grew up in the town where Digi-Key is located and once dated the daughter of a bodega owner, I must proceed.
First, bodega and convenience store owners don't order smokes from Philip Morris, they get all their stuff from various distributors. The stores themselves are usually locked into one distributor for junk food/smokes and another for liquor. Depending on how low you go on the convenience store food chain, often times the "distributor" is just a guy with a truck. Thus I'm not sure a good online business could be made aggregating the various prices of cigarette distributors. A useful startup idea would be a location-based mobile app that would tell you which bodega nearest you carries the cheapest cigarettes. You could make it non-evil by selling ads for nicotine replacement therapy that you would have to click through before getting the price for a hardpack.
As far as Digi-Key goes, they aren't the biggest distributor of electronic components... maybe in the top 20, or maybe top 10. However,they probably ARE the biggest distributor that will sell small lots to hobbyists. They are also one of the major employers in a small town in a rural area that has had a flat economy for decades. The only other employer of note is the snowmobile factory. Most of the money in the area is made by landowners who are paid your tax dollars to not farm their land, or else grow sugarbeets, one of the least efficient ways of obtaining sugar. Since they would have had to pay the most, those same farmers voted against school improvement bonds every year I lived there...so I'm going to have to go with "evil" on stupid farm subsidies but now I'm really digressing...
I'm going to have to vote "not evil" for Digi-Key. They know they are competing on price and are doing what they can to avoid losing business. If sales go south, they have to lay people off. Most of the employees don't have anywhere else to go find work. From my limited personal experience, there isn't a CEO caste at Digi-Key with golden parachutes who all stay rich whether or not the company does well. If they lose business, everyone gets fucked. I'm guessing they are cockblocking Octopart out of fear. This sucks for Octopart and is inconvenient for people prototyping electronics, but is it evil?
EDIT: what's really evil is that unknown or expired link error!
Digi-Key is the largest small-volume distributor of electronic parts in the US. They do $1.2Bn per year in revenue of which $700M is done online. Their gross margins are about 50% and their business is growing at 20% per year.
When Microsoft accused Linux of violating 50 software patents, most people thought they were pretty evil. The claims were frivolous and their aim was to preserve their market share at the expense of consumers. Likewise, Digi-Key makes the frivolous claim that by displaying their public information and linking to their webpage, Octopart is acting illegally.
This is not a debate about whether Digi-Key is good for the town of Thief River Falls or if Digi-Key should be making money. They have as much right to make money and keep their employees happy as Microsoft does, but when they use their muscle to wrongfully stifle innovation at the expense of consumers, it shouldn't be surprising that some people would call them 'evil'.
This information is freely available on their website (not to mention their widely distributed paper catalogs). Google has crawled much of Digi-Key's website and has this information on their servers. However, Digi-Key is specifically targeting Octopart (actually, I'm not sure if they're threatening Google, my uninformed guess is no though). The only thing we're doing differently than Google is distilling the information in a way that allows part buyers to compare prices readily. There are other part information websites also crawling Digi-Key, but Octopart is one of the only ones doing price comparison - again, I'm just guessing, but I doubt Digi-Key is threatening any of these other websites.
Also note that courts have generally held that pricing information is not protectable by copyright (prior to publication it might be a trade secret, but once you publish it, it essentially becomes a fact in the public domain). This has not stopped large retailers from using novel legal theories (or carefully timed DMCA takedown requests) to stop or chill 'Black Friday' websites, of course, but the law is actually reasonably clear in this area.
No, but a priori I would assume Philip Morris is a good company. Knowing what their product is, I revise that opinion.
It looks like there is a larger back story to this than was originally obvious to me from your essay and that has loomed very large in your estimation of Digikey's character. Framing it as a David and Goliath morality play is good marketing but I think a more nuanced view is reasonable - they're somewhat less good than I originally believed.
The reason Paul is calling Digi-Key evil is because they are actively trying to kill Octopart in order to preserve their monopoly pricing, not because they won't cooperate. Octopart needs as much cooperation from Digi-Key as Google needs from Wikipedia.
Monopoly is a misnomer here. Is Wal-Mart a monopoly?
The parts supply industry is not an industry of monopolies. There are a few large names--Grainger, McMaster-Carr, MSC, Digi-Key--that probably account for 25% of the market, and then a very, very, very long list of names most people have never heard of.
Ironically, Ma & Pa Electronics are frequently the ones with the highest prices. Large distributors like Digi-Key are often less expensive than small local shops.
Monopoly isn't the most technically accurate word, but behaviorally I'd say that Digi-Key is acting like a monopoly. Typically monopolies like to hold on to existing business practices rather than adapt to changing market economies. Regardless of 'good', 'evil' or 'monopoly', it seems to me that it is inevitable that online price comparison will start to become the norm for most markets. Digi-Key's reaction to this is very monopoly-like (in another world, they could choose to work with us and make sure they get the lion's share of traffic from our site).
Yes, some companies are running about doing things that are obviously good (feeding the hungry, clothing the poor), but for everyone else, I think 'good customer service' is the rarest and best compliment, because it implies a positive relationship.
Would you consider Octopart evil if they deny my request for their code/data so I that I can duplicate their site in order to provide an improved customer/vendor experience?
No. Digi-Key and certain other parts companies are suppliers, not manufacturers; hence they are in the information business. Octopart is really an aggregator of aggregators. Should we expect Orbitz to make their content available to MyNewTravelStartup.com?
I'm not sure I understand - Octopart does not sell any parts. Digi-Key's core function is to sell parts. They do in fact have a warehouse of parts and a team of salespeople, whereas we are three guys working out of cafes. Our interests certainly overlap to a high degree in that we both want accurate part information. But Digi-Key is in the information business in the same way that Walmart is in the information business (a company that also re-sells most of its inventory from manufacturers in its supply chain).
Digi-Key's strategy obviously diverges from Wal-Mart when we look at profit margins.
You make a good point; I don't think I can argue against what Octopart is trying to do from any kind of good vs. evil ethical standpoint. However, I can understand a business such as Digi-Key wanting to maintain control, and they could easily argue it is for the benefit of the customer. For example, when a customer searches Octopart, are they going to also get a list of complementary parts from each supplier? I doubt it. What about helpful charts, material safety data sheets, and CAD schematics? If someone was just scraping my site and hijacking the search functionality but failing to deliver the rest, I'm not sure I'd want my name attached either.
Of course this is really coming at it from the wrong level. The truth is that Digi-Key can simply ignore you, and it doesn't hurt them in the slightest. And while doing so, they can be sure they aren't reaping any of the negative consequences of being associated with you either.
The problem is not that Digi-Key is ignoring Octopart, but that they are making frivolous legal claims in order to rack up Octopart's legal bills. Digi-Key is acting the same way Microsoft did when they sued Linux for patent infringement.
This discussion of whether we are adding value or not seems very hypothetical to me. We aren't forcing anyone to use our site, presumably if people are using our site, it is because they find it useful.
i modded you up, because you brought value to the conversation. i don't think i agree with you though, or at least you haven't presented enough information to convince me. being concerned with customer satisfaction does not preclude the company from trying to keep prices artificially high.
Some of the comments about Digi-Key were unfair. Their prices are usually comparable to Mouser. Some items are more expensive, some are cheaper. They don't significantly overcharge for anything. You can confirm this with Octopart.
Also, the most interesting thing about Octopart is the line item that says how many parts are in stock, not the pricing.
In addition to listing parts from Digi-Key and Mouser we've also started indexing more consumer oriented sites like Newegg. Where there is overlap between Digi-Key and Newegg, we've found that the distributors are 10%-100% more expensive. For example, here are some search results for power strips (http://octopart.com/category--Accessories--Surge+Protectors/...).
I agree with your point about prices. Most people using Octopart, Digi-Key and Mouser aren't too concerned with pricing. Life would actually be easier for us if we hid Digi-Key's prices but we don't because we want to display all the information we have and because some of our users do find it useful.
I'm sure this is something that someone else has already thought about, but I haven't seen the point discussed anywhere else: in your goal of doing good by providing price information for parts from a wide variety of suppliers and distributors, you could end up harming some consumers as much as helping them.
It's the law of unintended consequences: by creating a directory of parts where the only organizational information is price, you indirectly encourage people to buy from the cheapest distributor. The cheapest distributor will tend to be the company with the deepest pockets, biggest warehouses, and crummiest customer service.
Let me give a real-world example: I've worked part-time for an internet service provider for a while. Our customers can call us up and (usually) reach a person right away. The tech support guys also happen to have sysadmin privileges, so if there's something wrong with their maildir, it can get fixed right away. We spend the rest of our remaining energy constantly working on new services and upgrading existing ones. So, we have decided to compete in the customer service and innovation arenas.
However, we can't compete on price. We've had several customers cancel service with us and move on to services like NetZero or PeoplePC. Sometimes we get a call back a few months later from the customer, all in a panic, because they can't get help with their computer anymore or the installware is behaving badly.
Nobody at the ISP is getting rich. We all work pretty hard to provide a service in the community. I think that given PG's definitions of "goodness", we'd mostly qualify.
Now let's say somebody comes up with a way to shop for internet service providers by going through a directory. The customer selects their region or city, and gets a list of possible internet service providers, along with the prices for service.
We'd stop getting phone calls from prospective customers, which costs us the opportunity to show prospective customers how easy we are to deal with. Customers would tend to buy the cheapest services, maybe without ever realizing that for just a couple dollars more a month they might have an option that's better for them.
We would be forced to either cut our prices, at the expense of our other services, or we'd be forced to scale back operations a lot (which would again cut into our ability to develop other services), or we'd go away altogether and customers really would lose an opportunity.
Without defending them, I can see that this might be where Digi-Key is coming from. If they're not interested in competing purely on price, they could see it as unfair to be forced to do so.
For your part, it sounded at the conference like your goal at first was just to make it easy to find parts. Then, you figured that having price information would be useful too. But, if your goal is to provide a "good" service for people, I don't think you can stop there. I think you're going to have to come up with a way to list customer service reputations for the various distributors, as well as their ability to have the parts on hand, ship them out quickly, handle returns or other problems, deal with hobbyists with smaller quantity orders, etc.
I no longer have any sympathy for Digi-Key now that I know they are doing $1B+ a year in sales. However, your point was played out back when sites started aggregating prices from camera vendors. The cheapest vendors were the worst ones, with really shady practices, like taking apart kits, then trying to re-sell you the stuff like the wrist strap and battery that should have been in the kit in the first place. The camera shop aggregators now all have reputation rankings.
That's a central question though. Digi-Key doesn't want to compete on price (potentially because they believe that the price reported isn't an accurate portrayal of their offering, because of inventory, service, et al). The problem with that is that it doesn't help (actively hinders?) the reduction information costs for the other market participants (Octopart's value as I understand it). Whether this is evil or not depends on what brand of free marketeer you are...
One possible way to address this would be to incorporate some kind of a service metric into Octopart, similar to the way that pricewatch evolved.
Digi-Key is considered evil because they are trying to kill Octopart in order to preserve their monopoly pricing. They are making the frivolous claim that Octopart is acting illegally when it displays public information and links back to their webpage.
Basically, Digi-Key is using their size in order to prevent free market competition in their industry.
I need to hear a much stronger case for Digi-Key having monopoly pricing power than just an assertion. Aren't the distributors market shares fairly fragmented (the assumption I'm operating on)? Digi-Key seems to have a large market share because it has built some kind of service reputation.
I don't really understand the legal position of scraping (and I'd love to see an accessible semi-authoritative explanation of the current state), but I do read lots of TOS's that basically say that that information is _not_ "public domain".
I'm in spiritual agreement with you as to what benefits part buyers the most (I think most people are wise enough to factor in some level of service into cost), but I think it's useful to think about Digi-Key's motivations in more dimensions than just good/evil. Again, I offer the pricewatch feedback/stars as an initial step that might address at least one apparent grievance. Not that that would stop them from fighting you (and good luck on that).
In an earlier post, I pointed out some price discrepancies between the electronic parts industry and the consumer electronics industry (http://news.ycombinator.com/item?id=168796). This is the evidence that I'm basing my assertion on. Incidentally, this comparison was not possible before Octopart.
There is no difference between what Octopart is doing and what Google is doing. Both companies crawl the web and mine their data sets for useful information. Typically, the word "scraping" is used to imply mal intent but I don't think it has a good technical definition.
Although Octopart and its investors may be frustrated, it does Digi-Key a disservice to characterize it as "evil", not "good" or a company that isn't concerned with its customers - it is extremely concerned with customer satisfaction and I have been very pleased with every interaction I have had with it.
Sure it would be great if Digi-Key facilitated Octopart's objective, but that doesn't justify conflating it with the all-star "evil" hall-of-famers.