Open source startups can hit profitability sooner than it took closed source incumbents, as long as they steer clear of rivals' costly business practices. That's according to MySQL chief executive Marten Mickos, who told vendors and venture capitalists open source companies could cut their costs by not ploughing money into …
Spending Money doesn't mean not marketing!
Either he believes his own BS, or he's ignorant of what made MySQL successful.
First the "free" to develop model. (Meaning when you go in to production you have to pay.)
Second, small support team. ( 7x24 support contracts with a "follow the sun" support model? feh!)
Guerrilla Marketing? Getting in to a LAMP stack? Getting used by publishers of tools as their database of choice?
Yes, marketig occured.. Just not the large expensive print ads.
So either he's a smart guy, or he's an idiot who happened to get lucky. You be the judge.
Either you're open or you're closed. You have to adopt one model or the other. With the open source model you can still provide (and sell) support. Or let the community provide it. Which means you have to write effective code for a desirable product. With closed you have to provide support (free or paid) or nobody will buy your product. And the code can be as crappy as you wish. If it's desirable, people will buy it. If not, you've just pissed away a bunch of development and marketing expense.
I see both models running together long into the future. Each has its benefits and downsides. Microsoft isn't going to suddenly say "Vista is now open source, we'll just charge you for support". And it's too late for the Linux community to go closed. (Well, somebody could, but the rest of the world would work around them and they'd go tango uniform).
The primary advantage of going "open source" is the automatic advertising hype you get, and the legions of fans who will advertise your product and defame any close-source competators.
Maybe because mainstream marketing has become more of a liability these days. Informed IT people are usually weary of software that has a massive marketing campaign, especially if it seems a) a large part of the budget is being spent on it, and b) they give relativiely short release dates (which means the software will be crappy and buggy).
And open source software usually gets its own marketing for free ... the "word-of-mouth", Internet style.
Then again, the MySQL & PHP combo packs are the main responsible that MySQL hit it big ... I began with Postgresql, but switch to MySQL during the 2000-2001 hype over MySQL. I eventually returned to PostgreSQL because of that thing about, you know ... no transactional tables in MySQL. And MySQL boasting about it as a *feature*! (Isn't that Redmond's job???)
What is "Cost"
When we use software - "What is the real cost?"
The most significant "Real Cost" is the personal time and energy spent learning the software and figuring how to implement and deploy it.
With the "Closed Model" you pay for the software up front. After that - you bear your Real Cost - and hope that the software you paid for does everything you need in a way that you like.
With the "Open Model" - you get to make a more judicious and affordable decision - You use the software some and figure out if it does what you need. If it does not, and your needs are important, many Open Developers will put your unsatisfied needs into their "Change/Update List".
Net result - by the time you shell out money for software or support - you are in a much more confident state of mind about spending the money.
Talking of the costs associated with Advertising & Marketing. With the Open Approach - the developer restricts these costs.
Therefore - he/she does not have to load those costs on what you finally pay.
Because of these fundamental differences - I think that Open Source will gain dominance when money is being spent on "Government or Public Projects". With Open Source becoming better known, public watchdogs and audit functionaries are learning new metrics for software and systems costs.
Here are some major costs avoided or minimised by the Open Model: -
(1) Advertising and Marketing
(2) Legal fees for developing & maintaining licensing agreements.
(3) Shrink-wrap box production and logistics - most Open Source is downloadable.
In essence - Open Source - puts a larger percentage of the developer's real dollars into the real work of software development and enhancement.
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