Ian Howells

Subscribe to Ian Howells: eMailAlertsEmail Alerts
Get Ian Howells: homepageHomepage mobileMobile rssRSS facebookFacebook twitterTwitter linkedinLinkedIn


Article

A Simple Marketing Model for Enterprise Open Source

Part One

It is critical to attack "the weakness in their strength" - classic "Ries and Trout" marketing warfare. An example is the following Differentiation/Comparison of Alfresco, SharePoint and ECM Stack (see Table 1).

Strategy Rule 6 - Say it in a tag-line • You're the open source alternative
You are entitling people to what they were previously denied. They no longer have to make a trade-off. It is the power of open source that is enabling this. Generically this is:

The Open Source Alternative to (Generic Term for Expensive Proprietary Vendor without stating names directly). Alfresco is
•  The Open Source Alternative for ECM

Strategy Rule 7 - Make your messaging fun and controversial
Messaging should complement and reinforce the differentiation and positioning (tag line) but also be more campaign oriented, fun and controversial. Also, open source is about the "Good guy" vs. the "Big, bad guy abusing his position of strength". You are up-against the deep wallets and large sales-force whispering into the customer's ear. Messaging should also address a distinct audience and be focused on the McKenna framework of:

  • Product
  • Market
  • Corporate
Examples for Alfresco are:
  • Don't get Tied in by Proprietary ECM Stacks
  • And lose control of your corporate architecture
Economic BUyer Differentiation
  • Keep getting the Open Source Cost Advantage
  • Alfresco the Open Source Alternative to Proprietary ECM
Strategy Rule 8 - Just be simply better - pricing and packaging
Open Source pricing and packaging is about driving large volume with minimum friction. It should be a no-brainer not a fight in a Red Ocean trying to displace an incumbent vendor through a detailed analysis of ROI, TCO and long evaluation. I remember talking to a senior banker at Lehman Brothers and a small thing he said made a lasting impression on me - "The best Return On Investments (ROI's) I have ever seen I have been able to write on the back of a postage stamp!" The point he was making was that when people make great (career making) decisions, the ROI is often so obvious it is a no-brainer. The ROI behind open source should be a no-brainer. The pricing and packaging should be simple and based on value innovation (See Strategy Rule 2).

A good rule of thumb regarding cost is a tenth of that of an Enterprise vendor. They typically charge maintenance as 20% of a license. Licenses may get discounted but maintenance rarely does. Therefore at 10% you offer no license cost and are half of the annual maintenance cost. If you have, not just cost advantages, but also value innovation you are better and half of the cost per year of the existing enterprise-wide contract.

Charge for what user's value and make it simple. If is it support then charge for support. One thing we learnt was to have a Community, Professional and Enterprise versions with more functionality drove users to compare the version and only value the differences. What enterprise users really want (in our case) and what we offer is support. We have a supported build of Alfresco and charge for support - with various levels of response time.

Strategy Rule 9 - Get community, get viral and get champions
The community is critical for the viral nature of open source. The community contribute in many ways. They contribute code, bug reports, fixes, translations, priorities and become your sales champions. Give these people all of the information you have. Just because people don't pay doesn't mean they don't contribute - they contribute to your success and also contribute the lack of success of your competitors. Every community user is someone that isn't paying for another proprietary enterprise system. Every community user is a voice for you in the blogosphere.

Strategy Rule 10 - Only the paranoid Survive. Wake up every day and innovate throughout the business
Jeff Miller, was the CEO of Documentum and he regularly reminded us of a phrase from Andy Grove of Intel - "Only the paranoid survive". The need to each day review your product strategy, business model and marketing model and stand back and realize there is no cookie cutter way to look for inspiration. You need to innovate and change continually.

Conclusion
We as an industry are learning much more about open source marketing than ever before. Just a year ago, we had only a basic understanding of how to work within this innovative way of building software to deliver a clear and accurate message to our potential customers. Each company often has a very different approach and strategy. Experience has shown, we can borrow from the best thinkers in the areas of marketing and business philosophies to build a comprehensive strategy for communicating the value of open source, prompting collaboration at all levels and clearly differentiating product offerings.

In part two, I will outline the implementation of these strategies and their impact on the open source consumer.

More Stories By Ian Howells

Dr. Ian Howells is chief marketing officer of Alfresco and has more than 20 years of enterprise software marketing experience in the fields of content management, service-oriented architectures, and relational database systems. Ian earned a PhD in distributed databases from University College Cardiff. He has long been on the forefront of technology and marketing, holding early positions at Ingres, Documentum and SeeBeyond. You can read Howell's thoughts on open source marketing at http://blogs.alfresco.com/ianh

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.