Why would I suggest that marketers should love something which is generally free, widely available, and highly disruptive?
It’s simple. Open source simplifies commercialization. Here’s why:
1. Open Source Validates a Need — Open source answers the ginormous question that keeps us marketers up at night: who cares? As in — it seems like a good idea, but who really cares? Open source businesses are built around a community of users. Rational users only use products that solve their problems. So by definition, someone cares. Of course, lots of questions remain in terms of a business model and commercialization strategy — but the most fundamental question is off the table. Here is the typical commercial open source route to market:
There is a significant gestation period before a business venture is attempted. Ideas are refined, product are polished. A need is validated. In the wild. By the actual people who will use the finished product.
Contrast this with the more traditional commercialization process. Note that the product never really gets stress tested until the prototype phase. And it doesn’t get a real workout until the launch. At this point, you’ve got a ton of sunk costs — and more than likely, a ton wasted effort.
2. Open Source Defines a Route to Market — I’ve argued recently that a modern go-to-market strategy engages users early and by offering them limited, but meaningful value before attempting to sell them anything. It then let’s them buy small increments of functionality and then ‘step-up’ their purchases over time as their needs dictate. For convenience, here’s the diagram from my earlier post:
In this case, the ‘free or trial’ version is the open source version. It’s incumbent upon us as product developers to create enough added value in our commercial versions to encourage a meaningful percentage of open source users to step up. Or to encourage their organizations to do so.
3. Open Source Stimulates Commercial Demand — Provided you’ve got a large community AND provided you’ve built a commercial product with sufficient (and truly valuable) differentiation from your open source version, you have two key (and non-trivial) ingredients for commercialization. But in any market, you still need to know who to target. A massive amount of resources are wasted trying to figure out the who. Open source gives marketers a huge leg up in the who department. You already have users.
By providing easy ways for users to see/try/understand value-added commercial functionality, some numbers of users will raise their hands. They’ll try it. If it meets their needs, they’ll get their companies to pay for it. They’ll make suggestions. They will tell you the type of functionality that they need to justify a purchase.
To make things even more interesting, open source almost always grows organically within a buying organization. A few people start using a technology, then more, then more, then it becomes a candidate for to become an organizational standard. This all stimulates demand for commercial versions. This creates a phenomenon some people call BFM, or black f#@ng magic. This is where out of the blue, you get an email or a phone call from someone to the effect of: “we love your open source product and we’d like to buy 1,000 seats of your commercial product.” It doesn’t happen every day, or even every week, but it does happen. And when it does, it’s pretty cool.
It’s Not Perfect. It Doesn’t Work All the Time. But It’s Pretty Compelling.
Don’t get me wrong — there are tons of challenges and pitfalls with commercial open source businesses. Leaving aside the gargantuan hurdle of creating a popular OSS project (just look at the number of dying or dead projects on SourceForge), commercialization takes a ton of creativity, hard work, and more than a little luck. Your commercial product has to be well differentiated. Your users most likely aren’t buyers, so you have to turn them into advocates. You can’t market too aggressively. And so on. And on.
But the market efficiency benefits trumps all the challenges. By a long shot.
PS: This isn’t some new-found found fascination based on my current gig at Sonatype. I’ve worked with several open source companies. I’m currently the CMO at Sonatype, which makes open source management products and plays an active role in huge projects like Apache Maven, Hudson, Nexus, and Eclipse. I worked for Akopia, an open source e-commerce software vendor, later acquired by Red Hat. I stuck around there after the acquisition and and ran product marketing for them. I currently serve as an advisor to Zenoss, an open source systems management company.