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The important points are in the last paragraphs.
Quoting:

There will be plenty of people who do it for the wrong reasons, and the pendulum will swing the other way and people will ask, 'What were we thinking, giving away our software,'" Lilly said. "They'll be blaming open source, but in all likelihood the blame will lie with a failure to execute, or taking care of customers--all those old-fashioned things."

[Call it the Netscape model after one of the early examples.
Rephrased, this is saying that a failing company will not automatically become a success by making software open source.
No matter how many people they are able to fire and replace with free labor, a buyer still has to want the product.]

Zachary said that many smaller companies are forced into taking a free product strategy. Large vendors like Oracle and SAP can count on recurring maintenance and support revenue, while companies with a small number of customers are far more dependent on license revenue.

"The only way to (compete) is to go open-source or software as a service--do something disruptive," Zachary said. "You have to do something to generate demand."

The small companies have difficulty obtaining recurring maintenance and service revenues because of the large vendors in the market, so they rely on licensing costs.

What does open source do?

Eliminates licensing revenues in hopes of replacing them with... (ready?) recurring maintenance and service revenues.

What's really going on is expense savings. Eliminate sales. Eliminate marketing. Eliminate the software people you expect open source to replace.

Open source is about fewer paid people. That's the implication of this strategy, which need not be cluttered by considering irrelevant factors.
Posted by: Anton Philidor   Posted on: 01/16/07 You are currently: a Guest | Members login | Terms of Use
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I hope Arras makes it  nucrash | 01/15/07
It would be nice if they would move to Linux/PostgreSQL though. I would not  DonnieBoy | 01/15/07
Since it's open souce...  BregS | 01/15/07
Personally, I don't have a use for this softwre, but, someone might. Though  DonnieBoy | 01/15/07
if you don't have use of it, why...  BregS | 01/16/07
I imagine there are better projects out there that will also run on Linux.  DonnieBoy | 01/16/07
Open source is the superior model  Chad_z | 01/15/07
Just to understand your point,  BregS | 01/15/07
OSS is good in many markets  Boot_Agnostic | 01/15/07
Yes, customers will pay for open source, and they like the guarantees it  DonnieBoy | 01/15/07
Very few I have seen.  No_Ax_to_Grind | 01/15/07
So, how do you explain all of the revenue for RedHat, MySQL, SleepyCat, etc  DonnieBoy | 01/15/07
But none of them  BregS | 01/15/07
RedHat and MySQL are making good money. RedHat in particular has been on a  DonnieBoy | 01/15/07
Same can be said for closed source companies  Richard Flude | 01/15/07
spoken like a true zealot  mdsmedia | 01/16/07
Sorry, not any developers I know.  No_Ax_to_Grind | 01/15/07
Obviously you are an unbiased sample representative of our population (nt)  CobraA1 | 01/15/07
There are a lot of very sustainable open source business models out there.  DonnieBoy | 01/15/07
Please name a few models  oldsysprog | 01/16/07
It really does not matter how or where the money comes from to pay the  DonnieBoy | 01/16/07
What are you afraid of No_Ax?  mdsmedia | 01/16/07
Got to be a good thing  Richard Flude | 01/15/07
Waht about low cost software?  BregS | 01/15/07
Not every case is the same. In your case, you might be able to keep part of  DonnieBoy | 01/15/07
You defined open source...  Anton Philidor | 01/16/07
The average Linux programmer makes a lot more thant the average Windows  DonnieBoy | 01/16/07
Unfortunately,  BregS | 01/16/07
You might be able to open source base functionality, but charge for  DonnieBoy | 01/16/07
Is you software suitable?  Richard Flude | 01/15/07
Just tell me how to...  BregS | 01/15/07
Did you ever consider that if it was open source, you might be able to do  DonnieBoy | 01/15/07
is it a joke?  BregS | 01/16/07
Business models? Which one?  BregS | 01/15/07
Have you ever heard of RedHat and MySQL??? They are both  DonnieBoy | 01/15/07
and what do they got?  BregS | 01/16/07
So are you denying that RedHat and MySQL make good money????  DonnieBoy | 01/16/07
without knowing your software...  mdsmedia | 01/16/07
Please be nice...  BregS | 01/16/07
The important points are in the last paragraphs.  Anton Philidor | 01/16/07
Unfortunately...  BregS | 01/16/07
Make a company to provide same service  Boot_Agnostic | 01/16/07
This is not only unethical...  BregS | 01/16/07

What do you think?

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