A while ago Shaun Connolly at JBoss posted an entry titled “What’s in a Subscription“. Shaun states:
“Put simply, a Subscription is comprised of:
1. Software bits
2. Patches and updates to the bits
3. Support in the use of the bits
4. Legal assurance”
I am beginning to wonder if, in the long term, the only truly scalable business model for OSS is one that incorporates #1 & #2 on Shaun’s list. When you think about it objectively, purchasing a ‘subscription’ to get “Software bits” and “Patches and updates to the bits” is the model the software industry has been using for decades. The only difference with OSS is that 99% of your users are doing so without paying for the product.
Heresy, yes I know.
But look at the successful OSS vendors & their products (RHEL, SLES, SugarCRM, JBoss AS, and MySQL Enterprise) in the market today. Isn’t financial success driven by access and updates to (specialized) software bits? Maybe other things were important to these vendors in the past, but at this point in their maturity, the major revenue driver is (simplified) access to (specialized) products baby!
If “Support in the use of the bits” was so critical to customers then a larger % of production users would be paying customers. OSS vendors wouldn’t need to direct customers to a paid subscription as a means by which to get (a specialized version) of #1 and #2.
I’m beginning to think that Support *was* the key method to get customers to the table. Now that customers are more comfortable with OSS, Support by itself is not reason enough to purchase (or renew) a Subscription.
As I discussed in a prior post, things like copyrights & patents are vendor issues and should not become customer issues.
Anywho, my (draft) thesis is that, in the long term, the only truly scalable OSS business model starts with gated access to binaries/code and the patches/upgrades to said binaries/code.
Is the enterprise software business model the future of the OSS business model?