Subject: Re: New markets and new pricing for FSBs
From: Ian Lance Taylor <ian@airs.com>
Date: 19 May 2000 16:51:24 -0700

   Date: Thu, 18 May 2000 07:14:29 -0700
   From: "Michael A. Olson" <mao@sleepycat.com>

   If you're truly Open Source, of course, your customers can just
   take your code and port it to the new OS themselves.  So these
   kinds of licenses need to forbid that, which makes the products
   not really free software.  After all, how free can it be if you're
   legally forbidden to compile it?

I don't entirely follow this.

Since the product is truly open source, your customers don't have to
buy the code from you in the first place.  They can just download it.

If your customers are willing to pay your price in the first place,
they will still be willing to pay it even if you sell the code for a
different platform at a different price.  They can already get it for
free.

Sleepycat's current license only permits free distribution in a open
source product.  For distribution with a non-open source product,
Sleepycat charges a fee.  Why can't you simply make that distribution
fee depend upon the OS?  Charge the higher fee for permission to
distribute on any OS.  Charge the lower fee for permission to
distribute only on specific OSes.

Of course you've thought of this, so I guess what I'm saying is that I
don't understand your explanation of why this does not work for you.

   I'm not very interested in advice that says, "Cannibalize your
   current sales to win the new market."  That's good on paper, but
   we've got employees with mortgages, and we need to keep paying their
   salaries.  We can't burn capital like a dot com.

Based on what you said, your current sales are going to be
cannibalized one way or another soon enough.  You can cannibalize them
yourself, or you can let somebody else cannibalize them for you.

Disruptive innovation is disruptive because it is nearly impossible
for existing companies to adapt.  It is very difficult for a working
company to cut profit margins (certainly some companies have managed
it, but most can only pull it off after a relatively drastic measure
such as going Chapter 11).  Your statement is a classic example of
that.  That is little comfort for you, of course.  If your analysis of
the situation is correct (I'm willing to accept that it is) then you
must either accept lower profit margins, or accept relegation to a
smaller niche than you currently occupy.

Ian