Open Source Users: the Value of a “Free” Customer

Keeping in mind the value of non-paying customers I happened to read an Alex Fletcher’s post about the paper “The Value of ‘free’ Customer” mentioned by Nick Carr in another recent post.

For free - skypeAn application fo free by malthe

The paper is about so-called two-sided markets, markets in which one or several platforms enable interactions between end-users, and try to get the two (or multiple) sides “on board” by appropriately charging each side.

While Open Source firms do not play in a two-sided market, the mathematical model created , as suggested also by the authors, might be applied in other areas, hopefully in the OS arena too.

Gupta, one of the authors, said:

working on understanding and modeling complex network structures such as those of MySpace. Here the issue that we are grappling with is the tangible and intangible value of customers. In other words, customers provide tangible value to a firm through direct purchases but they also provide intangible value through network effects or word of mouth. It is quite possible that some customers have low tangible but high intangible value. Traditional models would label such customers as low value and would miss a huge opportunity for a firm.

Technorati Tags: open source, network effect

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