[dundee] Open source and the Adoption-Led Market

[Rick Moynihan]

On 15/03/2008, Gary Short <gary at garyshort.org> wrote:
> Rick Moynihan wrote:
>  > Just came across this fantastic post describing (some) open source
>  > business models:
>  >
>  > http://blogs.sun.com/webmink/entry/the_adoption_led_market
>  >
>  > It's nothing really new, but I think the phrase alone is a great
>  > contribution to the movement; it's pure MBA speak*!  Coincidentally,
>  > it's the same point I was trying to clumsily make yesterday...
>  >
> Hi Rick,
>
>  It's a fair point, but it seems to me that the author cheated slightly.
>  In the paragraph where he describes the traditional means of software
>  aquisition, the customers are technically "dumb", they have a business
>  problem and they put the aquisition of a solution to that problem out to
>  tender.
>
>  In the paragraph where he speaks about adoption led aquisition of
>  software, the customers suddenly become technically capable of solving
>  the problem themselves and are now only looking to "outsource" the
>  ancillary aspects of the solution. This seems to be comparing apples and
>  oranges to me.

I'm not convinced he 'cheated'.  A customer drawing up an adequate
specification to tender on *is* a significant technical challenge.
Sure, specs often amount to wish lists, but in the end making the
decision between tenders requires technical knowledge (in addition to
domain knowledge).

You might argue that companies rarely make decisions based on
technical and domain knowledge (which I might agree with), and opt for
solutions based upon other criteria such as the quoted price, the
vendor who promises the impossible or the vendor who schmoozed the
customer the most on the golf course.  If this is the case then in the
procurement-driven approach the customer is 'lucky' to end up with an
adequate solution.  In adoption-led they can have greater confidence
that it works.

You're right that a naive customer might not get very far with an
adoption-led model, but OSS companies can also play the tendering
game.  The adoption-led sale is an additional one not available to
traditional proprietary software companies.

Remember also, the sort of companies who create tenders are large and
typically employ their own IT departments, with CIO's etc...  So in
this case, I we are comparing apples with apples.

The adoption-led strategy however, also occurs at the low end where
(for example) there is a limited budget for software and IT...  Here
sys admins etc, effectively sneak an OSS solution in through the back
door to scratch their own itch.  Then when the business realises that
this solution is a critical business process they invest in the extra
support and additional services surrounding the software.  This is why
Redhat, MySQL etc are multi million $ businesses.

You might have missed some of the later posts expanding on the first:

http://blogs.sun.com/webmink/entry/adoption_led_is_not_shareware
http://blogs.sun.com/webmink/entry/adoption_led_as_a_force

R.