Understanding open source business models

 

ned's picture
Posted Mon, 02/22/2010 - 12:07 by ned

There's a headline that will wake up a lot of people ;-)

But seriously, we're interested in starting a more active dialog with community members on something that's very close to our hearts as a business:  making money.  You might even call it a Goal.  Yes, we want to make the world a better place for business software users - but we also want to make sure we're striking the right balance of customer and community user value.

To that end, we'd really appreciate it if you could answer one question.  Put very simply, what would you be willing to pay for?

Competing with QuickBooks and MYOB

Submitted by kjtl on Sun, 02/28/2010 - 08:04.

G'day Ned

The base versions Quick Books and MYOB bring updates every years which often costs around the $250-$400 mark.
So all those potential customers are used to paying that amount each year to stay up to date.

Maybe offer some version to bookkeepers/accountants, maybe the open version with update support through the year which they can resell.
Offer training for registered bookkeepers and accountants at cost.

Let the bookkeepers and the accountants do some of the word of mouth advertising for you.
The main thing I have found with the open source model is to sell the service ...

Regards

Keith Hutchison

Thanks, Keith. One

Submitted by ned on Mon, 03/01/2010 - 17:15.

Thanks, Keith. One additional factor in this equation, of course, is the value that a local xTuple partner can add. Whenever possible, we try to connect users (be they PostBooks or commercial Edition) with someone nearby that can help them implement and tune the software in person - and of course assist with any other localization issues such as language, accounting/tax, etc. Many of them are in fact the bookkeepers/accountants you mention. We've got dozens of such partners around the world now, which is great - and we're actively looking for more. All partners do receive the updates you mention, as well as included training, and backstop support from xTuple when they're with their customers.

The flip side, though, is that if a user elects to continue with just the free PostBooks Edition, there's not really any money in it for us. To a considerable degree, we're ok with that as a company - it's one of the things you make your peace with when releasing your product as open source. There is greater value to us - and the whole community - to have more people actually using the software in production, than we might be able to extract for a entry-level license fee in most cases.

So you're quite right, sell the service. And if most of the service is coming from a local partner, then that's a fine thing. There are other things we can sell to such users, including the XTN network upgrade service, and training.

And of course, when we do not have a local partner, there are a variety of direct support and service options we offer as well.

As always, we welcome any feedback.