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Make Markets Not War

A simple marketing model for open source - Part Two

This is the second part of my two-part series on open source market strategies and implementations. I previously outlined the 10 strategy rules for open source marketing and emphasized building new markets, differentiating, contributing, pricing and innovating, and the customer relationship.

As I mentioned in part one, a year ago I wrote "Howells' 10 Rules for Open Source Marketing." Here we're looking at where Alfresco is a year later in its marketing approach. Many of our open source peers are adopting the same principles, and I believe this evolution of open source and the realizations we've experienced can be used by emerging open source entrepreneurs and commercial open source companies still looking for the best model for their particular business.

Implementing a Marketing Strategy for the Open Source Consumer
Implementation Rule 1 - Get consumerized. You can't beat a gorilla by being a dinosaur
.
We used to talk about "Gorillas" like Siebel and Peoplesoft but now even being a gorilla isn't enough. Today there are mega-gorillas like Oracle, Microsoft, IBM, and SAP. All others are caught in a no-mans land and vulnerable to open source. Mega-gorillas will be generic and sell everything.

IT procurement has undergone a consumerization process where users go through:
•  Discovery
•  Research
•  Try/Download
•  Join a Community
•  Buy - Support, Training, Consulting
•  Process - The software is discovered through the Web, Sourceforge, blogs, keyword search, forums, RSS, podcasts, webinars, trials, downloads, traditional media, and word-of-mouth. Don't think you're big enough to play against the mega-gorillas on their turf by micromarketing. You need to get consumerized.

Implementation Rule 2 - Discovery - Consumer convenience means at their desktop.
Consumers evaluate when it suits them using source they trust. That means they read and listen, most often from their desktop. They don't want a face-to-face hard sell. This means the discovery phase is critical to get above the noise of the crowd. We've found search engines, blogs, and traditional PR to be the most effective channels. This has a number of impacts on what you do and don't do and how you measure success. Open source marketing must also be open and trust-based not big budget-based. Users don't trust ads. We don't advertise or use paid-for AdWords. In that game the gorillas can just outspend you. Your advantage is credibility and trust - use it wisely.

PR is traditionally measured by press coverage. Open source is a rapid consumer-driven closed loop. So it's easy to measure the impact of PR through:
•  Traditional coverage
•  Blog coverage
•  Alexa
•  Hits on your website (we've seen massive 300% spikes in traffic)
•  Downloads
•  Trials

There's an interesting story about how one customer chose us. They searched for "open source documentum" on Google and found Alfresco.

Implementation Rule 3 - Research & Try - Don't sell to me. I can make up my own mind.
Consumers don't want a face-to-face hard sell from an enterprise salesman to demystify complex space and complex product. Users want easy access to all the information they need to make a decision. This doesn't mean a face-to-face roadmap presentation after a non-disclosure agreement (NDA) has been signed. Users want to be able to join a community for either information or code that includes access to a demo, a trial, a download, a roadmap, the documentation, and technical tips. This is all that's required for a consumer-driven, self-service decision where the consumer independently qualifies himself as opposed to the salesman.

Implementation rule 4 - People like to talk but not face-to-face.
When an enterprise consumer has decides to go further with enterprise software he wants to talk to a human being not an e-store. This means he will e-mail and ask to be contacted. Salespeople are very important - but over e-mail, the phone, and GoToMeeting - not flying round to big customer meetings.

Implementation Rule 5 - The open source machine and the dinosaur.
Open source is a new world with discontinuity in the business model, marketing model, and product development model. This means that you need a new "open source machine" to cope with the number of people downloading your software, asking questions, accessing your website, accessing demonstrations, trying the product, discussing it in forums, updating the wiki. This is massive compared to a traditional software start-up. The extended infrastructure has to be able to support contributions, bug reports, and fixes from other individuals and companies, take feedback from forums and surveys, and support hundreds of thousands people downloading your software. Amid this, you have to be able to identify those who want to buy support, patches, and updates for a mission-critical environment and those who want to use open source as part of the community. Open source companies have to be masters of the whole open source software value chain to support the massive growth potential.

What's critical is that a new model and new machine is required to support the new price point. The enterprise dinosaurs can't compete with this. Even when they win business it's often at a loss since they have an old model and an old high-cost enterprise sales machine. Over time this becomes unsustainable. Typical short-term tactics are:
•  Give the software away
•  Bundle multiple pieces of software together to reduce the sales costs
•  Stop investing in innovation

In all cases the customer loses and pays in another way - there's no free beer.


More Stories By Ian Howells

Dr. Ian Howells is chief marketing officer of Alfresco and has more than 20 years of enterprise software marketing experience in the fields of content management, service-oriented architectures, and relational database systems. Ian earned a PhD in distributed databases from University College Cardiff. He has long been on the forefront of technology and marketing, holding early positions at Ingres, Documentum and SeeBeyond. You can read Howell's thoughts on open source marketing at http://blogs.alfresco.com/ianh

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