Jeffry Smith said:
Repeat after me:
Open Source is a Software Development Model, not a Business Model
Open Source is a Software Development Model, not a Business Model
Open Source is a Software Development Model, not a Business Model
. ..
This is the crux of the matter. Jeffry is correct. Do not mistake the SDM
with the BM. It is a proven fact that there is an abundant of volunteer
coders out there who will freely provide between 50% and 90% of any software
solution that a company needs. That leaves between 10% and 50% of the work
available for the rest of us money-hungry business driven PHB's to squabble
over. The major difference between making money solely on proprietary
software vs soley Open source or a combination Open Source / Free Software
is the fact that proprietary solutions do not leverage this large
development resource to lower their costs of delivery. The vast majority of
software that business depend upon do facilitate their business are
internally developed single use monolithic systems. These systems were
developed for use not for sale. The enterprises that developed them could
care less about their saleability and are solely focused on their costs and
thier usability. Enterprises often spend months deploying and tuning an
application that will run for years. They don't care too much about the
difficulty of configuring the system as long as it is robust and reliable
after deployment. They are much more concerned about the functionality than
the user experience also. If the rank & file can be taught how to open a
support case / account / trouble ticket / sales request / ... in the
in-house system and the item will be tracked and routed correctly and result
in efficiencys in the operation of the business then that is that. If the
rank & file don't like the interface because it has a command-line feel and
requires obscure key combinations to invoke behavior then they will be given
a cheat sheet to paste to their terminal. If that doesn't suffice then they
will be invited to work elsewhere.
The business of business is getting something done. If you have a business
model that facilitates this for other organizations then you have a service
business. If you have a business model that sells something that you got
done then you are in a product business. The only product based business
model in the software industry is closed source because by definition if you
give away your product then you don't make money on it. So that leaves the
Service business model. The service business model for software depends
upon delivering a business solution to the customer not an inert piece of
code (compiled or not).
The service business model makes it's money by charging a satisfied customer
for an increase in the efficiency of that customers business as a result of
the service provided. If I service your car and it runs better then you pay
me. If I serviced it with oil and parts that I got for free then my margin
is higher. The fact that I did or didn't pay for the oil and parts that I
used to service your car is irrelivent to you and your car's performance.
(provided I obtained them legally)
>From the customers stand point the service required is or can be defined in
terms of expected/desired performance improvement. The service technician
can source thier parts and oil wherever makes for a better margin. This
reasoning makes a strong argument for the Free Software / Open Source
software base. Will there come a time when this volunteer army stops
producing? Perhaps. So-What. If you have built a service business on
these solutions and they are no-longer being improved by those communities
you will be faced with two options. Increase your costs to your customers
to include the outrageous lisencing of the proprietary solutions. Or
increase you costs to your customers to include staffing up sufficiently to
support and improve the open solutions. If you haven't been eating all of
your wider margin in the mean time you should be able to stay open on both
fronts. The point is focus on providing the value the customer wants to
buy. The business solution to the business problem. People don't want
email they want to send messages to each other asynchronously with store &
forward capability with rich multi-media content. If that happens to be
something that email can do - great. If not then please write something or
find something that will and you will be handsomely paid. If that need were
provided by some genetically engineered Speed-of-light pigeon with a
holographic printer strapped to it's back that would be just fine. The work
is then up to the sales persons.
-----Original Message-----
From: Jeffry Smith [mailto:[EMAIL PROTECTED]]
Sent: Saturday, May 26, 2001 10:11 AM
To: [EMAIL PROTECTED]
Subject: Re: Business Plans
Repeat after me:
Open Source is a Software Development Model, not a Business Model
Open Source is a Software Development Model, not a Business Model
Open Source is a Software Development Model, not a Business Model
. ..
Business models include selling products and services. Software
Development Models (SDMS) are about how you build SW. While the
development model may change how you can apply the business model, it is
NOT a business model. Structured Development is NOT a business model.
Code Review is NOT a business model. Extreme Programming is NOT a
business model. Open Source is NOT a business model.
This is getting to be a hot button with me, because I continue to see
these "Open Source Businesses are failing, Open Source doesn't work"
stories. Guess what - 80% of ALL new businesses fail! Numerous
proprietary SW companies have also recently failed. Service companies
have failed. HW manufacturers have failed. Does that mean the assembly
line is a failed business model?
Companies that figure out how to build businesses in the service and
product industries USING Open Source Development will succeed. Because
they will recognize that the ultimate in business is MEETING YOUR
CUSTOMER'S NEEDS. And they will meet their customer needs
faster/better/cheaper with Open Source. Period.
jeff
"Kenneth E. Lussier" opined:
>All,
>
>I was just reading this article on Kero5hin:
>http://www.kuro5hin.org/?op=displaystory;sid=2001/5/17/63515/2438 . It
>is just someone thinking about open sourse(Linux, specifically) based
>business models and why they cannot work. It isn't the typical rant
>about OSS not being mature/stable/secure enough. The comments that
>follow the article are fairly insightful, too.
>
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thought for the day: Happiness isn't having what you want, it's wanting
what you have.
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