Thoughts on open source software economy: Downloads, sales and value
As Savio pointed out, information veracity and transparency drives markets -- when they're hard to come by markets suffer accordingly. He also noted how transparency in the software acquisition process is what allows open source software to derive value even in the dropping of costs of accretion...a statement with which I'm in total agreement. Savio goes on to question which way a vendor can produce more revenue:
- Distributing 10 million copies of an OSS product and then trying to convert 0.001%-0.01% of the user base into paying support customers
- Marketing & selling a commercial (non-OSS) product which is able to attract 10,000 paying customers (maybe using a SaaS model?)
As is already evident, there are quite a few variables which would have an affect on the outcome. However, it's also helpful to mention that the economies surrounding moderately-to-highly relevant open source software offers revenue-generating opportunities which should be considered when making monetary forecasts. Mostly, these are disregarded in favor of examining what amounts to accepted customer conversion rates similar to those above, as main determinant of the ball park figure for revenues.
It's important to note that while open source ecosystems have received a fair share of attention very little light has been shed on the concept of an associated economy. It makes sense that if most of an open source ecosystem flies under the radar, even more of its economy goes unaccounted for. A fact that isn't exactly irrelevant from a monetization perspective as the occasion to garner revenue from the extended economic activities of third parties is rarely considered. So long as those activities are not accurately quantified it's impossible to consider augmenting the revenue generated from the customary 0.001% - 0.01%. As it stands now, very little can be said for the other 99.999% - 99.99% except what is extrapolated from the smaller fraction of customers...hardly a statistical exercise bound to produce a stable set of hypotheses.
Such numbers, while generally accepted as part of the reality of doing business as an open source vendor, also speak to the potential of unexplored areas of growth. The extended ecosystem is attached to an extended economy that still goes unacknowledged, let alone analyzed. And while sales taken in by a vendor are included in that economy, they are by no means its entirety. Am I advocating finding out more on account of introducing authoritarian methods like taxation, hierarchal control, etc.? No, but it strikes me as obvious that what is today's inevitable just might be tomorrow's outdated thought pattern where the difference is additional data/information.
OSS is the game of profit by the masses.
Posted by: Sales Jobs | March 26, 2008 at 07:33 PM