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05.31.07
Adding Risk Into The OSS Customer Equation
 By Savio Rodrigues
Finally catching up on some reading…I came across this post at ZDNet that discusses an upgrade of Red Hat's stock by Credit Suisse.
The analyst (Jason Maynard) seems to be on the same point that David Skok (of JBoss VC fame) made on at OSBC. How can JBoss/Red Hat monetize a larger percentage of their user base? Currently only 3% of JBoss customers (or downloads? How would JBoss have a count of non-paying customers) actually pay for support.
I quickly thought about Marten's customer groupings that he summarized at OSBC.
[1] Those willing to spend time to save money
[2] Those willing to spend money to save time
I knew that I liked his two groups for a reason. I totally forgot that I had come up with 3 groups of OSS users a little while back. My groupings were, more or less, based on willingness to accept risk.
{1} Cost Contentious: Unlikely to ever pay
{2} Scope Contentious: Pay based on app criticality & perceived need for support
{3} Risk Contentious: Likely to always pay (i.e. CYA)
Both views make sense, but willingness to trade off Time & Money doesn't happen in a vacuum. That's why I believe willingness to accept (varying levels of) risk is important when trying to categorize OSS users.
On the surface, there is little change to the Time vs. Money equation as a result of JBoss adopting the Fedora model. A customer that wants to spend time to save money can continue to use JBoss "Community Edition". As a result, one could refute Mr. Maynard's claims that JBoss adopting the Fedora model will drive more
revenue.
This is where risk comes into play. Keep in mind that the JBoss "Community Edition" will include the latest features, some of which won't make it to the JBoss "RHEL" version or may be dropped from future JBoss "Community Edition" versions. JBoss is clear that backwards compatibility isn't guaranteed with JBoss "Community Edition".
If you're a customer that wants to spend time to save money, and you're somewhat risk averse, than you don't like using a product with features that may disappear in the future. You have the option of buying JBoss "RHEL" and getting backwards compatibility. You can also look elsewhere for an application server solution.
Taking Risk into consideration is likely the #1 reason that an OSS user will turn into an OSS paying customer.
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About the Author:
I am taking a semi-break from IBM life as I return to finish a PhD in Industrial Engineering. I've held roles in market intelligence, strategy and product management. I'm ex-product manager of IBM WAS Community Edition, and blog about enterprise open source topics.
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