Open Source and Pricing of Software
Ian Landsman writes that the way to beat open source competitors is by increasing the price. He
says that money is not that important to many people. That goes with my belief that I mentioned in one of my old post, while I was talking about offshoring: If you are offshoring just for saving costs, you are only shooting yourself in the foot. Cost cut is really an attractive proposition but quality and domain expertise has to be considered before that.
I maintain that though it is important to work towards saving the costs, but it is foolish to do it at the cost of the product and its support infrastructure. After all, if one wants to create a multi-million dollar business or gain an equivalent productivity because of the technology / product, it’s perfectly fine to spend a bit on those technologies.
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Do you mean to say that open source products are inferior to expensive proprietary products. No way buddy. Cost is not the only advantage to companies moving towards open source. Avoidance of vendor lockin, better security, putting your hands in the source code, many times faster bug fixing are also equally important. It is just a matter of time before open source occupies in all the enterprises.
Regarding the three normal arguments he quotes
1. Companies want support (not just forums, but actual support with phone numbers)
2. Companies don’t want to rely on part time developers who have no obligation to work on the product
3. In theory OS gives the customer power to change the code. In practice they lack the skill and/or desire to do so.
The first one is plain wrong. There are many companies who offer support through phone. Also many companies develop open source software now a days. They also offer phone support for an extra cost which is cheaper than what proprietary vendors charge.
The second one is also plain wrong. Most of the important open source software is supported by organizations and companies that employ full time employees. Whatever he says may be the case in case of small time open source software which an enthusiast develops. It is the case with small time proprietary software too.
The third point may be tru but the availability of source code is only an additional advantage for people who want it. open Source software are popular in enterprises not just for the source code availability but for various other reasons. Source code is just an additional extra benefit as far as enterprises are concerned.
Regarding his other argument, you can get the same cover as proprietary software by buying proper support from a proper company (better if you can get it from the company/organization that develops it and in other cases, there are many reliable companies that offer the same level of support offered by proprietary developers). Any risk associated with open source software is no different from proprietary software as long as companies buy support from reliable companies that offer them (better if it is from the company that develops the software).
this guy comes down as someone who lacks basic understanding about open source and its use in the business. It is just a matter of time before companies make money from service than products. It will soon be the case of “Gone are the days of expensive software”.
Never did I say that the open source is better or worse than a closed source. Ian was just pointing out that if you keep your prices too low (whether for the product or its customization, and that could well be a open source product customization), you will be closer to an unsupported or voluntary community support open source product. People are more than often concerned a lot about the support, and they will be fine with paying for it as long as they know that the turn-aroudn time will be good.
This entire thing was more about the support, its importance as perceived by a customer and its price implications – nothing to do with quality, really!