Pros and cons of software selling model "cheap product, expensive support"

Ed Daniel — Fri, 02 Feb 2007 14:45:00 GMT

I came across this LinkedIn Answer post today:

"Can anyone suggest a good set (or source) of pros and cons of "sell cheap/free, support for money" approach? Like Oracle do, for example. The software i'm talking about is for financial services industry, and quite expensive. I'm sure there is a lot of experts in selling strategies - would love to hear opinions, thanks."

Here's my thoughts on this...

At both a macro and micro level of software architecture i.e. a business-ready solution that leverages operating systems, messaging and storage platforms, upon which a variety of applications exist to an individual software component perhaps on a chip; the issue is one of 'software that just works' and 'software that needs help'.

Whatever software you use you make choices at what point you enter the architecture and how you build upon and beneath the various intermingling layers, it's more a 3D ecosystem than a vertical 2D stack nowadays.

At each juncture where one software depends on another the risks involved are based on maintainability, resilience, security, scalability, interoperability and its measure of being fit-for-purpose.

Around these arguments one would be able to align a business strategy that compliments the resource required to achieve a successful solution - such requirements will involve capacity, expertise and knowledge.

Knowledge is fast becoming a commodity, open standards are driving integration. What is not a commodity is 'time' - so the pros/cons of selling cheap/free software and raising revenue through a support model must meet the value of 'time' the approach brings to the customer.

If your solution costs less time to develop, deploy, manage, integrate, evolve and the overall lifecycle cost is competitive - then the proposition is able to stand up against any other proposition - at this point the customer should have a clear understanding of the cost/requirements & benefit/deliverables and be able to identify the value that can be created/saved through implementation.

The most compelling aspect of using free and open source software is the speed of evolution - software is released more frequently, more often - successful open source projects have thousands of expert developers participating to test, use and improve usability, functionality, design etc..

Already open source projects on both proprietary and non-proprietary operating systems have free automated testing tools that have improved software development lifecycles which means more people are writing better software - as well as the impact of free peer-group knowledge sharing that is taking place on the internet.

Moving your value proposition from product to service will mean you will need to be aware of all these aspects in order to provide a solution that competes with the rest of the marketplace - therefore smaller open source projects are at risk of being inferior to proprietary solutions and would be dangerous to rely upon.

A blended approach is to build proprietary expert tools that leverage and integrate with open source and proprietary software that are faster, better and superior to any current software available - a variety of business models exist to facilitate how this can be executed.

Update:

Check out this product from Sourcefire which is an example of a blended proposition.

In the pursuit of collaborative intelligence... : proprietary

Pros and cons of software selling model "cheap product, expensive support"