Subject: Re: What we're up to, was Re: forking the list considered harmful (was Re: free software vs. open
From: "Tim O'Reilly" <tim@oreilly.com>
Date: Fri, 26 Nov 1999 09:13:06 -0800



Kirrily 'Skud' Robert wrote:
> 
> 
> We're working on a Zope-based project management system, with core
> developers drawn from our own company but with open mailing lists and
> contributors from outside.  This will be released under an open source
> license, and we'll be making our money off support and consulting.
> 
> But in order to ramp up our development effort, we need funding.  We've
> identified a number of businesses in our local area who need a system
> like this one, and we're approaching them for sponsorship.  The deal we
> are working on is that if they sponsor us to the tune of $10,000
> (Australian) they get 1 year's support (worth $2,500); $2,500 worth of
> consulting for specialised add-ons, installation, training, or whatever;
> and the other $5,000 goes into the overall development effort.  Larger
> or smaller sponsorships will have the same proportional breakdown.
> 

I personally think that the reliance on "support" income is dangerous,
or maybe just the term.  Cygnus changed the name from Cygnus Support to
Cygnus Solutions for a reason.  People are willing to pay more for
solutions than they are for "support" of something that they think is
already supposed to be a complete solution.

That being said, I think that your model, which is essentially one of
development cost sharing among a set of interested customers, is a good
one for specialized open source projects to explore.  We're trying to
make something similar happen from another end (the customer end) with
the system we use for order processing.  The company that built it (it's
a pick-based system, running on UNIX) has gone out of business, and the
"support and maintenance" has been taken over by some former employees,
who are working on contract for the users (a relatively small base, not
more than a hundred at the outside, and maybe fewer than that).  I'd
like to persuade the consultants and the other customers that it would
be great if we could set up a cooperative exchange, where we all share
our modifications, and the cost of maintaining and upgrading the
software.  Now the developers may think that they'll make more money by
dunning each of the customers in turn, rather than as a group, and I
imagine that for a certain size of project, that is revenue-maximizing. 
But my contention is that there are tasks that no one of the customers
will want to fund, but that all of them together would be willing to
fund.  Finding that line for the benefit of the developers is the
challenge we have to overcome.

Now, obviously, this could be done without open source, but it's a good
way to get people on board.  

WRT your "project management system"--sounds like a good idea.  If it
has wide enough application, I would suggest that trying to pre-fund it
may be a limiting factor on growth rather than an accelerant.  Unlike
the case I'm suggesting, where the user base is quite limited, your user
base could potentially be large, and it may be worth your while to
spread the software as quickly as possible to people who are not willing
to pony up.

The question your customers are likely asking is "is it better to pay
now, or get to be a free rider later?"  

I'm certainly asking that question.  If the software did the right
stuff, I might be interested in it myself.  But I don't have the cycles
to look into it and evaluate it, and so I'm more likely to wait and see
rather than be willing to pony up money hoping that it will turn into
somehting.

So a lot depends on how eager your local companies are to see this
software.  I think of the offer of custom work as part of the price is a
marketing tactic only, to sweeten the issue, but in fact, the key is
whether or not the people want the software badly enough to invest $5K
(or whatever) in having you build it.
> Anyone else done anything similar to this?  Any advice or comments?
> 
> K.
> 
> --
> Kirrily Robert -- <skud@netizen.com.au> -- http://netizen.com.au/
> Internet and Open Source Development, Consulting and Training
> Level 13, 500 Collins St, Melbourne VIC 3000
> Phone: +61 3 9602 2452   Mobile: +61 419 119 429

-- 
Tim O'Reilly @ O'Reilly & Associates, Inc.
101 Morris Street, Sebastopol, CA 95472
+1 707-829-0515, FAX +1 707-829-0104
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