A blog for the enterprise open source community
Sales and marketing for open source – same differenceMatthew Aslett, April 1, 2010 @ 6:32 am ET
Specifically, James states: “Matt Aslett (451) and Brian Prentice (Gartner) talk about code contributions and R&D practices but rarely mention S&M”. He goes on to explain how he sees fundamental differences between the sales and marketing strategies and budgets of proprietary and commercial open source software companies.
As it happens, I’m very happy to talk about sales and marketing as we have just published a CAOS report, written by my colleague Jay Lyman, on “how open source software drastically changes the sales and marketing approach”.
As Jay outlined in his recent post, one of our key findings was that open source can enable significant savings in software sales and marketing, but it is often a case of spending differently rather than spending less.
The research was based on a series of in-depth profiles addressing the sales and marketing perspective of a number of nine high profile commercial open source vendors, supplemented by a sales and marketing survey of 25 open source vendors, as well as the previous CAOS survey of more than 1,700 open source software customers and end users.
50% of the vendors we polled said they spent less on sales and marketing efforts when compared to their experience or knowledge of traditional software vendors. It would appear from James’ analysis that Pentaho would be in that category. However, a near equal number (46%) reported they spent differently, rather than less.
Illustrating this, we found that while open source reduces the need for some traditional resources, such as salespeople, customer visits, sales offices and market research, it pushes more of the work and investment to the Web and in-bound marketing activities.
We also found that while open source generally provides greater speed in development and time-to-market for software, it can actually slow down the return on sales and marketing investment, since the user has the option to self-support without making contact with the vendors until they choose to do so.
While Pentaho was not one of the vendors profiled in our report, we did speak to a number of vendors using the open core licensing model. Perhaps their experience is very different from Pentaho’s, but they provided a few choice quotes that indicate that the open core model poses its own benefits and challenges when it comes to sales and marketing:
“The volume adoption in the open core component is required to make this model work. Done correctly, this model helps customers to find us and makes our sales and marketing model more efficient.”
“We can compete with ourselves; i.e., our commercial product may not be purchased because our open source/core product contains sufficient functionality to solve customer problems.”
“Continuing to maintain the right balance of functionality between the freely downloadable open core and the commercial extensions is both art and science. It’s critical to get that right so the model continues to grow and advance.”
“Number one [challenge] is differentiation between core and commercial versions. If core is good enough, your commercial sales will be impacted.”
There is much more detail on sales and marketing for open source in Jay’s report, including the survey results, vendors profiles, and best practices for commercial and community sales and marketing strategies. More details here.
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