Open Source Revenue Models: About trying harder to look like any other (proprietary) vendor

Matt Asay few days ago wrote an inspirational blog post about open source revenues, bringing Larry Augustin to add some salt to the conversation, concluding that customers need to be educated to the real value of open source.

Try harder!Try harder! by eyelightfilms

Larry meets regularly buyers and CIOs around the world, and he definitely has a pretty unique view on the commercial open source market, so I trust him when he says that customers need to be educated to the value of an explicit and incremental cost structure.

Part of the challenge is educating customers about this different model. The Open Source company needs to explain to the customer that they can pay for consulting services to support their pilot, and then pay for the subscription service as opposed to getting the pilot for free from the proprietary vendor but now having to pay a large licensing fee when they deploy.

Open source vendors trying to convince customers of that, unfortunately are asking potential customers to share not only the opportunities (incremental investments, pay per use, etc) but also the risks. In fact they would end paying for pilots and trials, and I can hardly see many of them willing to do it.

I totally agree with Larry saying that it would be better for customers in the long run, or to better say, it could. As a matter of fact proprietary vendors are providing potential customers with a lot of value beyond the license marketing the organization and its products and services, developing partnerships with hardware or software vendors, investing in pre-sales meeting and so on.

Before experiencing dramatic savings, as Jonathan Schwartz says, potential customers need to get facts and figures about those and potential price savings, and things like the guide to lower database TCO whitepaper or the MySQL savings calculator seem just to start going in the right direction.

Red Hat learned the lesson, spending a lot in advertising, and not only.

Still need upfront money? Ask your VC, and tell them what else and how you are going to sell.

Technorati Tags: open source revenue, open source marketing, Sun, MySQL, Red Hat, JonathanSchwartz, LarryAugustin, MattAsay

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