To have a warranty or not to have a warranty...that is the question.


Paw Prints: Writings of the maddog

Jan 12, 2014 GMT
Jon maddog Hall

Recently the Affordable Care Act (ACA, otherwise known as “Obamacare”) has dominated the news of the United States. Whether you are for it or against it makes no difference to this blog post, but there are a lot of similarities between health insurance, car insurance and computer system warranties that make it interesting to compare them.

In the United States a “warranty” is a legal promise that tells a consumer what they might expect if a particular product does not perform the way it is represented to work.

New automobiles, for instance, may come with a warranty that tells the customer that certain parts will be replaced in a certain period of time, and whether it is just the cost of the replacement part that is covered, or the labor that it takes to replace the part. The warranty is (in effect) an insurance policy that is purchased along with your automobile, and often you can buy additional insurance to extend the warranty on how your car is supposed to work.

Over the years, as the lifetime of car parts increased due to better materials, engineering and manufacturing increasing in quality, the warranties also grew longer, being seen as a valuable selling point of the car. Often the warranties included free oil changes at the dealership where you purchased the car, as this was seen as both a way for the dealer to establish a relationship with the customer and for the dealership to make sure the car was getting adequate lubrication and care to make the engine and drive chain (transmission, differential and wheel bearings) last longer.

Now cars and warranties are fairly straight forward. The car has a function of providing transportation, and therefore the warranty is relatively easy to apply. Either the car functions or it does not. If it is functioning it typically meets the requirements of the warranty. If the car does not function, then the part is found and replaced. In cases of proven design failure, a recall may be necessary. And because the warranties are usually from the manufacturer rather than the dealer, your warranty is typically serviceable even at a dealer different from the one where you purchased the car.

I am not a “Pollyana”. I know that the warranty that comes with the car is paid for in the price of the car, but the warranty protects the owner from catastrophic repair bills in the first few years of the car's life.

Collision insurance, purchased separately, protects the owner from catastrophic repair bills from accident. I do not go back to the manufacturer when I have an accident, as that warranty does not cover accidental damage.

Health insurance is a bit harder to administer. When a person's body stops working, typically it means they are dead. It is hard to replace a part and bring them back. Therefore with health insurance we have to rely even more on “preventive maintenance”, and over the years insurance companies have built in paying for yearly or bi-yearly medical exams “for free”, to encourage people to take these exams and see if they are about to “stop working”. Perhaps early detection of a failing body part might make the repair work less expensive. Early detection of cancer is a good example. Without that “warranty feature”, the person might not pay for those check-ups, and the “failure rate” and cost of repair would go way up.

However, health insurance has the down side of having to treat things what are not necessarily black and white, broken or working. Many illnesses, difficult to diagnose, may mean the body is not working to its peak and require very expensive diagnosis work which yields no result. Recalls are typically not done, but artificial replacement parts are now making life-threatening illness and “part failure” treatable, although sometimes at an unbelievable cost.

Like car warranties, however, with health insurance you can typically go to another “dealer”, although perhaps inside the same “network”, to have your warranty honored.

Computer warranties from manufacturers are even worse than health insurance and definitely worse than a warranty on a car.  First of all, while they may warrant the system to “work”, they never state what that means with regards to a specific purpose. Will your computer system be able to act as a web server? A database server? And to what level of performance? All of the charts and figures that are normally shown to customers on these issues are never part of the actual legal warranty on the system, but are part of “marketing materials”, usually shown to the customer on slides or white papers that have non-disclosures applied to them.

Software “warranties” are the "best" (sarcastically said) reading, in my experience. After you get past all the legal wording put in place by a raft of lawyers you find out that the warranty that came with your software does not even protect you from having your hardware burst into flames and burn. The most that the warranty typically allows you to do is take the unopened (!) package of software back to the store where you bought it and (sometimes) get your money back.

I am making a point about all of this because for many years I have heard that people (and particularly business people) use closed source software from large companies because they get such great support on their software, that these companies stand behind their software, and that gives the customer a feeling of security.

Then I ask the business people to carefully read their software warranty.

I ask these business people about the last time they called the software manufacturer with a real problem, and assuming that the problem was not already known and had a patch or work-around, how long it took them to get a patch or even a work-around for their problem.

I asked them if they could go to another closed-source software manufacturer to get a better or faster bug fix (like they could with their car or doctor), and of course the answer was “no”.

And of course a warranty does not apply to new functionality you need, just the functionality that already exists in the product. The statement in the software warranty about whether your software actually will do what you want it to instead of “only” what it does is “This software is not warranted for any specific purpose...”.

I asked these business people if their project had died or whether they had gone out and just purchased new software that had a new warranty which still had no value. Typically the answer was “yes”...either or both.

If the customer did get a replacement or refund for their software, it was typically from the store where they bought it or the value-added reseller who wanted to keep their business, not from the software manufacturer themselves.

With Free Software you get no warranty. The software typically states up front that it is not suitable for any purpose, and that the customer is totally responsible for using it. Yet many people use Free Software, can get fixes for it and can even have it extended to meet their needs.  That, to me, is a true warranty.

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