Channel ecosystems and the way vendors and Commercial Open Source vendors treat them were recently commented by Vinnie Mirchandani, Dana Blankenhotrn and eventually Alex Fletcher. I wish to add some considerations, bringing also Open Source Franchising in the picture.
Let’s start talking about VARs’ importance, I agree with Dana reporting:
Whether the SugarCRM license conforms to the OSI standard is not important, Whitehead said. Affordability is all. License gotchas don’t matter as much as the small business’ relationship with their reseller.
Whitehead concludes that to succeed in the mass business market, open source companies need to keep Value Added Resellers (VARs) happy. Make a long reach toward VARs and your project can crack this market.
As results also from the interview to Juergen Geck, firms like Open-Xchange are addressing market needs with two different solutions: a customizable platform for who needs integration through VARs, and a turn key solution to sell through Resellers and Distribution channels.
Alex Fletcher talking about Open Source Firms added:
Operating a successful commercial open source software operation requires maintaining the delicate balance between enabling the free user and flat out making money.[..]
The point being, traditional forms of partner engagement tend to not scale well with the current realities of open source software.
As I already have observed I see space for growing in computer services franchise arena, but before talking about that, I think it is important to stress once more that there are just two ways to make money from OSS: “best code here” and “best knowledge here”, tertium non datur. Vendors willing to empower their channel need to think about it, and arrange training programs and marketing plans able to massively deliver fixed-time, fixed-price and standard quality through their partners.
Open Source Franchising strengths, in terms of vendors’, customers’ and partners’ goals and perspectives, are worth to be analyzed and might be applied to other vendors besides Sun.
If you didn’t like the barber’s shop analogy, have a look at this enlightening post talking about Packaged (Productized) Services in a Hospital by Michael Krigsman, and wonder:
In reassessing how they perform bypass surgery, Geisinger doctors identified 40 essential steps. Then they devised procedures to ensure the steps would always be followed, regardless of which surgeon or which one of its three hospitals was involved.
Next time a services vendor says your project is too complex to define a fixed price, ask whether it’s more complex than heart bypass surgery. If packaged services can successfully be applied to surgery, they can be applied to enterprise software implementations.
I totally agree with Michael, it can be done, it must be done.
I completely on the issue of packaged services. Here is another article you may be interested in:
I described a case where a commercial software buying decision should exclude the license fee altogether, making the whole thing look just like open source.
All the best,
Michael Krigsman
http://projectfailure.com
Hi Michael,
thank you to join the conversation!
Of course I agree with you when you say that we should consider software costs beyond the license fee, more important to me is the following statement:
That is just what I believe Open Source Franchising should address, in short:
Your opinion is welcome!
Roberto,
I see no difference whatsoever between open source services and traditional consulting services. Once the license is obtained, whether through payment or free, the software must be deployed.
At that point, integrating the new software into an existing technical and business infrastructure becomes the big issue.
I agree that fixed-price services are the right model, as I have written here.
However, I don’t think it’s specifically an open source issue.
Michael Krigsman
http://projectfailures.com
Michael,
as a matter of fact customers want software working properly, either is proprietary or open source.
More than one year ago I wrote a paper about Open Source Franchising, showing Sun a possible way to turn all their OSS in a source of income. As I explained they are the perfect Franchisor, and I believe that they should seriously considering productized (consulting) services, as apparently they are starting to do. As you know this unfortunately doesn’t come for free (as in beer), and they eventually should spend time and effort to build an appropriate training program for the franchisees, besides some money for marketing, of course.
What is new? “Just” the approach, bringing to the market a different billing arrangement, with a different perceived value (results, quality, etc), from artisanship to industrial. Customers are supposed to appreciate it, as you also pointed out in one of your interesting posts:
Roberto,
I have added an additional comment here (my new blog location):
http://blogs.zdnet.com/projectfailures/?p=309
Thank you Michael,
I commented on your new blog, hopefully adding some salt to the conversation, keep it going!
I think fixing a heart may in fact be less complex than fixing a business. Hearts operate within rules of physics and chemistry, businesses operate with far more obscure rules and processes.
You won’t hear a lawyer providing fixed priced legal advice, neither should an implementer be forced to do the same.
Simon, I eventually joined the conversation on your blog, I understand your perspective and I believe that ‘productizing’ is not for all.