Ian’s Blog on Open Source Marketing

The End of it
Scrooge changes his life and reverts to the generous, kind-hearted soul he was in his youth before the death of Fan. He anonymously sends the Cratchits the biggest turkey in the butcher shop, meets the charity workers to pledge an unspecified but impressive amount of money, and spends Christmas Day with Fred and his wife.

The next day Scrooge catches his clerk arriving late and pretends to be his old miserly self, before revealing his new person to an astonished Cratchit. He assists Bob and his family, becomes an adopted uncle to Tiny Tim, and gains a reputation as a kind and generous man who embodies the spirit of Christmas in his life.

I believe that this time next year when we look back at 2009 we will see it as a positive year. Times like this turn us all into what my friend Nancy Garrity calls “Econnoisseurs”. The Urban Dictionary defines econnoisseur as “One who insists on the highest quality at the lowest price.”

After the tech bubble burst every company needed to find a way to do more with less. Lee Thompson of E*Trade discussed in Business Week how by using open source software, running on less expensive hardware, he saved $13m per year going from 2002 to 2003. Open Source with commercial Service Level Agreements in a typical enterprise configuration saves between 89% to 96% for Enterprise Content Management.

In times of recession companies can’t just do business as usual. They need to look at what they do, look at what is really necessary, innovate, simplify and cut out un-necessary costs. This creates great software companies and enterprises that are great users of software. Out of the bubble came great companies such as Google, Amazon and eBay that benefit people every day of the week. Out of this recession Open Source and Cloud-Based Web 2.0 companies will emerge as similar powerhouses that benefit people every day of the week.

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7. The Year of Consumerization of Enterprise Software

Enterprise software has often been very successful “shelf-ware”, being expensive, difficult to rollout, expensive to scale and difficult for users to learn and want to use. The consumer market and Web 2.0 has shown the way in a number of areas including:

• Simple and intuitive to learn with no training course
• A system that users want to use as opposed to being forced to use
• Low-cost, massive scalability

A study for CIO magazine entitled “Nine out of 10 users said they could work better if they could bring their home computer into work,” points to users finding the web and web 2.0 applications easier to use and more productive than legacy enterprise applications. The iPhone, Facebook, LinkedIn, Digg, Twitter, Google, WordPress, delicious, Slideshare and Friendfeed will influence enterprise software and expectations as much as they have the internet. Enterprise software will become consumerized, changing the trend of enterprise software funding the consumer market irreversibly. In the 1980s and 1990s enterprises and the military set the pace for technology innovation. Consumer technologies are now increasingly driving technology innovation and IT adoption.

The Consumerization of Enterprise Software

Prediction for 2009: ECM software will become consumerized and as much at home in the home office as the head office. Just like you don’t say software is object-oriented you won’t say software is Web 2.0. It will just be there, inside and outside the enterprise. Interfaces will move to Rich Internet Interfaces such as AJAX, Flex and standards such as RSS, REST, RSS, ATOM, JSON, OpenSearch will become as taken for granted as http and HTML.

8. The Year of the Lean Software – The Development Diet

Every new year has “New Year’s Resolutions” and a diet is often on the list. This year the diet will be in software development. The 1990’s was to software, what junk food is to a weight-loss plan. Bloatware and obesity went hand-in-hand. This century has seen core technology such as Java remain at the server level but lightweight scripting and rapid development become the norm for application development and the antidote to bloated vendors, products and applications. Lightweight development focuses on:

• Simplicity and rapid development
• Lightweight scripting using such as PHP, JavaScript, Ruby, Perl and Python vs. J2EE and .NET
• REST vs. SOAP
• Web scalable vs. Enterprise scalable
• Mashing up internal and external content vs. content from one system

Prediction for 2009: Loosely-coupled scale-out, REST architectures will form the foundation of new systems with web applications developed in lightweight scripting languages delivering mashed-up content into a RIA will be the way forwards in 2009.

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5. The Year of Choice is Important Again – CMIS becomes the SQL for Content Management

“Choice” has always been a nice word. The headline grabbing price rises of Oracle and SAP and the new lock-in of SharePoint have made customers realize they don’t want to put themselves in a situation where they have no choice in the future. Choice is core to lower prices today and lower prices tomorrow. Geoffrey Moore, a great visionary, a number of years ago predicted the “Stack Wars”. Stack wars tie a customer not just to one product but a whole stack. To reduce the cost of software today you need not just lower cost for the software you are buying but also choice of the lowest cost software stack to run it. This allows you to in the future, if your vendor increases its prices, to switch another vendor. You could for example go from BEA to JBoss, Oracle to MySQL, Windows to Linux or vice versa.

Prediction for 2009: Support for an open stack at the operating system, database and application server levels will be demanded. Content Management Interoperability Services (CMIS) will become the SQL for the content management industry and the catalyst for choice, developing applications once that run on any compliant system with painless switching.

6. The Year of New Enterprise Software Pricing Models

Traditionally enterprise software has been bought with a large upfront payment, followed by a large, typically 20%, annual maintenance renewal. This was driven as a capital expense (cap ex). Discounts for enterprise deals have tempted companies into buying more than they need, creating shelf-ware and rich software companies. This purchasing process is changing, driven by Open Source and Software-as-a-Service pricing models. Customers are now demanding:

• No large upfront fee
• A subscription model
• The ability to budget out of operating expense (Op ex) as opposed to capital expense
• This purchasing process is changing, driven by Open Source and Software-as-a-Service pricing models

Customers are also demanding fair pricing for fair usage highlighting the flaws of traditional pricing:

• Per user pricing – often called Client Access Licenses (CALs)
• No difference in pricing for someone who uses the software for 1 hour a year and someone who uses it 24 hours per day
• A single user paying multiple times to use different software just to access or edit different content formats e.g. Word and CAD files

Prediction for 2009: A move to a subscription model driven out of operating expenditure and a move to fair usage based pricing not CALs.

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The Ghost of Christmas Present
The “Ghost of Christmas Present”, a great genial man in a green coat lined with fur, takes scrooge through the bustling streets of London on the current Christmas morning, sprinkling the essence of Christmas onto the happy populace. They observe the meager but happy Christmas celebrations of the Cratchit family and the sweet nature of their “forgotten” son Tiny Tim, and when the Spirit foretells an early death for the child if things remain unchanged.

2. The Death of Long Term ROI Studies and “I’ve started so I’ll finish”

The traditional way to sell enterprise software was to find a “killer application” and do “Value-Based Selling”. The number of times I have heard phrases such as, “Our software will reduce costs in your supply chain by 1% over 5 years therefore it is perfectly reasonable to pay a mere $1m for the software”.  Long-term ROI is dead. Customers care about the cost now and the benefit over the next quarter.

As in “A Christmas Carol”, the “Ghost of Christmas Present” reflects what I have heard more and more recently, about enterprise content management projects that are very late, and more importantly in the current economic climate, very over-budget – if things remain unchanged the projects will have an early death or be replaced by a lower cost alternative that is simple to use and easy to rollout.

Prediction for 2009: Long-term ROI studies are dead. Customers care about the cost now and the benefit over the next quarter. Companies will review current “in-flight” projects and realize it is cheaper to scrap them and move to a more cost effective alternative than to blindly carry on.

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