Posted on March 2, 2007. Filed under: Uncategorized |

Pros and cons of software selling model “cheap product, expensive support”

I came across this LinkedIn Answer post today:

“Can anyone suggest a good set (or source) of pros and cons of “sellcheap/free, support for money” approach? Like Oracle do, for example.The software i’m talking about is for financial services industry, andquite expensive. I’m sure there is a lot of experts in sellingstrategies – would love to hear opinions, thanks.”

Here’s my thoughts on this…

At both a macro and micro level of software architecture i.e. abusiness-ready solution that leverages operating systems, messaging andstorage platforms, upon which a variety of applications exist to anindividual software component perhaps on a chip; the issue is one of’software that just works’ and ‘software that needs help’.

Whatever software you use you make choices at what point you enterthe architecture and how you build upon and beneath the variousintermingling layers, it’s more a 3D ecosystem than a vertical 2D stacknowadays.

At each juncture where one software depends on another the risksinvolved are based on maintainability, resilience, security,scalability, interoperability and its measure of being fit-for-purpose.

Around these arguments one would be able to align a businessstrategy that compliments the resource required to achieve a successfulsolution – such requirements will involve capacity, expertise andknowledge.

Knowledge is fast becoming a commodity, open standards are drivingintegration. What is not a commodity is ‘time’ – so the pros/cons ofselling cheap/free software and raising revenue through a support modelmust meet the value of ‘time’ the approach brings to the customer.

If your solution costs less time to develop, deploy, manage,integrate, evolve and the overall lifecycle cost is competitive – thenthe proposition is able to stand up against any other proposition – atthis point the customer should have a clear understanding of thecost/requirements & benefit/deliverables and be able to identifythe value that can be created/saved through implementation.

The most compelling aspect of using free and open source softwareis the speed of evolution – software is released more frequently, moreoften – successful open source projects have thousands of expertdevelopers participating to test, use and improve usability,functionality, design etc..

Already open source projects on both proprietary and non-proprietaryoperating systems have free automated testing tools that have improvedsoftware development lifecycles which means more people are writingbetter software – as well as the impact of free peer-group knowledgesharing that is taking place on the internet.

Moving your value proposition from product to service will mean youwill need to be aware of all these aspects in order to provide asolution that competes with the rest of the marketplace – thereforesmaller open source projects are at risk of being inferior toproprietary solutions and would be dangerous to rely upon.

A blended approach is to build proprietary expert tools thatleverage and integrate with open source and proprietary software thatare faster, better and superior to any current software available – avariety of business models exist to facilitate how this can be executed.



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