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A Simple Marketing Model for Enterprise Open Source
Part One
By: Ian Howells
Sep. 23, 2007 08:45 PM
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It is critical to attack "the weakness in their strength" - classic "Ries and Trout" marketing warfare. An example is the following Differentiation/Comparison of Alfresco, SharePoint and ECM Stack (see Table 1).
Strategy Rule 6 - Say it in a tag-line • You're the open source alternative
The Open Source Alternative to (Generic Term for Expensive Proprietary Vendor without stating names directly).
Alfresco is
Strategy Rule 7 - Make your messaging fun and controversial
Open Source pricing and packaging is about driving large volume with minimum friction. It should be a no-brainer not a fight in a Red Ocean trying to displace an incumbent vendor through a detailed analysis of ROI, TCO and long evaluation. I remember talking to a senior banker at Lehman Brothers and a small thing he said made a lasting impression on me - "The best Return On Investments (ROI's) I have ever seen I have been able to write on the back of a postage stamp!" The point he was making was that when people make great (career making) decisions, the ROI is often so obvious it is a no-brainer. The ROI behind open source should be a no-brainer. The pricing and packaging should be simple and based on value innovation (See Strategy Rule 2). A good rule of thumb regarding cost is a tenth of that of an Enterprise vendor. They typically charge maintenance as 20% of a license. Licenses may get discounted but maintenance rarely does. Therefore at 10% you offer no license cost and are half of the annual maintenance cost. If you have, not just cost advantages, but also value innovation you are better and half of the cost per year of the existing enterprise-wide contract. Charge for what user's value and make it simple. If is it support then charge for support. One thing we learnt was to have a Community, Professional and Enterprise versions with more functionality drove users to compare the version and only value the differences. What enterprise users really want (in our case) and what we offer is support. We have a supported build of Alfresco and charge for support - with various levels of response time.
Strategy Rule 9 - Get community, get viral and get champions
Strategy Rule 10 - Only the paranoid Survive. Wake up every day and innovate throughout the business
Conclusion In part two, I will outline the implementation of these strategies and their impact on the open source consumer. Page 2 of 2 « previous page ENTERPRISE OPEN SOURCE MAGAZINE LATEST STORIES . . .
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