Open Source Business Strategy: About the Open Source Whole Product Concept

James Dixon keeps updating his “Beekeeper model“, analyzing and discussing open source business strategies, now giving a closer view at the importance of the productization process.

Commercial open source, as James states, exists just to deliver software as whole product: an out-of-the-box, easy-to-consume, packaged-and-delivered, risk-free solution.

Learning to walk on the tight-rope
Italian whole organic product, by fensterbme

Most open source projects do not have anything that equates to productization. The barriers to the adoption of open source exist because open source projects do not have have a productization process. This is the biggest difference between an open source project and a commercial open source company: an open source project does not productize the software, a commercial open source company does.

Open source productization, either in the form of complements enriching the core product or packaged productized services, is a key component to define a proper open source business model. Making the right decision about what to give away and what to keep secret, should come out of an analysis of which are your value propositions and core competencies.

Stephen Walli talking about “ideas” to avoid when thinking of your open source business says:

[..] choose your license wisely: if your entire core competency that enables your core value proposition to your customers is embodied in the software, DON’T publish it in such a way that you give away the company.  I have seen a situation in the security world where the software solution was everything.  If they had made the software available under the wrong license, they would have essentially given away their future growth.

I totally agree. Funambol business model is a good example: Funambol’s clear-cut distinction between community and enterprise edition enables the company to:

Funambol keeping secret tools to provision users’ phones, manage devices or send OTA commands doesn’t give away is crown’s jewels. Moreover, it is unlikely if not impossible that carriers would ever create or foster a technological club to cook their own code. Carriers compete, and carrier edition’s features definitely make it a differentiating technology.

Core competencies are not necessarily about code, though. I will leave this for another post, as well as more thoughts on open source value proposition.

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