Subject: Re: dual-branding (was: Re: Paper on dual licensing)
From: "Stephen J. Turnbull" <stephen@xemacs.org>
Date: Thu, 05 Dec 2002 12:06:53 +0900

>>>>> "David" == David Kaufman <david@gigawatt.com> writes:

    David> that's marketing double-speak.

Ie, an attempt to lie without being legally liable.

    David> it wants corporate-minded visitors to find an
    David> enterprise-class security *product*.

Sure.  Ie, it is not a business based on _promoting_ education and
open source.  It is deliberately obfuscating information, and in at
best a symbiotic relationship with open source.  This relationship can
turn parasitic at need.  Cf. the parasite that incited it all,
Unipress Emacs.

I'm _not_ complaining.  I'm observing.  The owners can do what they
like with the company, including closing the source, if they think
that's the way to recover their investment and make a profit.  And it
looks to me like an important point of dual-branding is to make that
feasible, by cutting your image connection with open source.  "No,
we're not open source, and never really were.  So don't complain."

I think it's worth contrasting the approach of the #1 "enterprise-
class open source solution", the Apache webserver.  I don't think you
have to "deeply bury" the fact that you're open source to create a
product.

Also note that Bitmover's web page features a "why we're _not_ open
source" rant quite a bit more prominently than Sourcefire features its
open source roots.  Another interesting contrast.

This is not to say that dual branding is not a good way to support
open source software, just that

    David> it seems to me that Snort/SourceFire's method might just be
    David> *the* way to go for any FSB,

is excessively optimistic.  (You're also ignoring lifestyle businesses
completely.  Some people are just going to want to promote open source
or the software itself, as well as make money.)

    David> ...which is why i (hope that i just) coined the term "dual
    David> branding" to go hand-in-hand with the traditional FSB
    David> business model of "dual licensing" :-)

"Dual-branding" can be thought of as an extreme form of "versioning,"
which is the term that Shapiro and Varian popularized for this
concept.  It has been used in the economics literature for about three
decades, although only recently becoming standard in the sense of
promoting nearly identical products very differently.  The concept
goes back to the 60s or earlier in the automobile industry, which in
fact uses exactly the dual-branding strategy (Ford vs. Mercury,
Chevrolet vs. Oldsmobile).

    David> the strategy very cleverly plays on the long-understood
    David> marketing concept that, when making purchasing decisions,
    David> most customers tend to subjectively value a product based
    David> on what they must *pay* for it, more than most other
    David> possibly more objective factors.

Economists call this "free-riding on the informed customers."  If you
believe that your needs and preferences are similar to the informed
customers, and that they are a large enough share of the market to
have a significant impact on price, then market price is a very
objective measure of value.  Cf. "common-value auctions."

-- 
Institute of Policy and Planning Sciences     http://turnbull.sk.tsukuba.ac.jp
University of Tsukuba                    Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
               Ask not how you can "do" free software business;
              ask what your business can "do for" free software.