Speaking at the Open Source Business Conference Europe, Simon Phipps, chief open source officer for Santa Clara, California-based Sun, said the industry was on the brink of a new software market.
The software model has to shift away from the right to use and towards delivering value at the time off production, he said, explaining that the new model would follow the enterprise open source software vendors’ lead of giving away software but charging for enterprise support and other services.
Phipps said version 1.0 of the software market saw buyers making software choices at the same time as their hardware selection, while version 2.0 saw the software and hardware segments separated and payment for software paid at the point of acquisition.
Software Market 3.0 sees users able to select and use software as and when they like, and only pay for the software as and when they deploy it. It’s all just there, and you build your solution for your business with what’s just there, explained Phipps. You pay for the software at the point of deployment.
Paying for the software is all-important, and Phipps maintained that the model delivered freedom to choose, rather than free software. What customers will pay for once they have tested and evaluated potential offerings, he added, is the services needed to keep their systems running once they had been deployed whether that might be support, education, warranties or indemnification.
The open source market of the future consists of bundles of value delivering what people require to keep it in production, he explained. It’s a market of many niches.
While the term ‘Software Market 3.0 may suggest the next level of web service applications and Web 2.0 mash-ups, the term is based on the realities of enterprise software licensing usage, according to Robin Vasan, managing director with venture capital firm Mayfield Fund.
Customers are saying ‘I’m going to try it before I buy it. I’ll try it and if it does what you say it should do, then we’ll think about having a conversation about paying for it, he told the OSBC Europe attendees.
Meanwhile Marten Mickos, CEO at open source database vendor MySQL, also explained the potential economic benefits of giving your software away for free.
Most of the entrepreneurs of tomorrow have no money to spend today, he said. There is a long cycle in terms of building up the momentum. We started by reaching out to those who cannot pay.
By providing fellow open source start-ups with the company’s MySQL database free of charge, the company stands to benefit from their success driving a need for professional support services and partnerships.
