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Thursday, January 29, 2009

Open Source Software Business Models On The Cloud

There are strong synergies between Open Source Software (OSS) and cloud computing. The cloud makes it a great platform on which OSS business models ranging from powering the cloud to offer OSS as SaaS can flourish. There are many issues around licenses and IP indemnification and discussion around commercial open source software strategy to support progressive OSS business models. I do see the cloud computing as a catalyst in innovating OSS business models.

Powering the cloud:
OSS can power the cloud infrastructure similarly as it has been powering the on-premise infrastructure to let cloud vendors minimize the TCO. Not so discussed benefit of the OSS for cloud is the use of core algorithms such as MapReduce and Google Protocol Buffer that are core to the parallel computing and lightweight data exchange. There are hundreds of other open (source) standards and algorithms that are a perfect fit for powering the cloud.

OSS lifecycle management: There is a disconnect between the source code repositories, design time tools, and application runtime. The cloud vendors have potential not only to provide an open source repository such as Sourceforge but also allow developers to build the code and deploy it on the cloud using the horsepower of the cloud computing. Such centralized access to a distributed computing makes it feasible to support the end-to-end OSS application lifecycle on single platform.

OSS dissemination: Delivering pre-packaged and tested OSS bundles with the support and upgrades has been proven to be a successful business model for the vendors such as Redhat and Spikesource. Cloud as an OSS dissemination platform could allow the vendors to scale up their infrastructure and operations to disseminate the OSS to their customers. These vendors also have a strategic advantage in case their customers want to move their infrastructure to the cloud. This architectural approach will scale to support all kinds of customer deployments - cloud, on-premise, or side-by-side.

The distributed computing capabilities of the cloud can also be used to perform static scans to identify the changes in the versions, track dependencies, minimize the time to run the regression tests etc. This could allow the companies such as Blackduck to significantly shorten their code scans for a variety of their offerings.

Compose and run on the cloud: Vendors such as Coghead and Bungee Connect provide composition, development, and deployment of the tools and applications on the cloud. These are not OSS solutions but the OSS can build a similar business model as the commercial software to deliver the application lifecycle on the cloud.

OSS as SaaS: This is the holy grail of all the OSS business models that I mentioned above. Don't just build, compose, or disseminate but deliver a true SaaS experience to all your users. In this kind of experience the "service" is free and open source. The monetization is not about consuming the services but use the OSS
services as a base platform and provide value proposition on top of
that. Using the cloud as an OSS business platform would allow companies to experiment with their offerings in a true try-before-you-buy sense.

Wednesday, January 14, 2009

Situational Marketing and Participatory Information Platform To Lure Info Shoppers

Mark Penn, the author of Microtrends, has written an article in WSJ describing information shoppers. These shoppers are the consumers who go online to find all the related information ahead of time before making a purchase. The traditional sales people and the TV commercials don't interest them and do not fulfill their information appetite. I enjoyed reading Microtrends and this article does a great job highlighting a psycho-demographics that marketers will have trouble going after using traditional approaches. The marketers should pay close attention to this trend. The emotional appeal of a brand could help attract consumers to the products but may not necessarily translate into sale unless info shoppers are satisfied with the necessary information for a given situation to make that decision.

Situational Marketing: The marketing campaigns, active or passive, miss the real situational context. The consumers are making a decision under specific circumstances that I would describe as a micro-situation. The information that is presented to them, most of the time, lack the context and stop just at the brand appeal. If the marketers can identify these micro-situations such as looking for a new iPod since my Zune froze or a dual layer DVD that would support my current burner they could win over those consumers.

Google pioneered the search over browse via AdSense. The contextual ad placement based on users' intent while searching have performed better over non-contextual banner ads that people typically see (or not) when they browse. Extending this concept beyond the ad to make information available to the shoppers when they need them, until they complete the sale, would go a long way against bombing them with non-contextual marketing campaigns. Marketers have used obscurity to promote the coolness of the brand but what really helps consumers to seal a deal is the brand transparency.

Think beyond traditional information channels: The average number of visits to a vendor's site has been consistently falling since people are exploring other ways to find information and engage into conversations. Providing information on a participatory platform allows the consumers to build community around the products and brands to exchange information. The marketers can tap into the collective wisdom to promote the products. The open source software is a living example that demonstrates the influence of community and community-generated content in buying behaviors.
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