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Open Source Business Models A brief introduction

Swati Sani C.E.O. SANIsoft Nagpur, India. Open Source Business Models A brief introduction. What is this talk about?. Overview of traditional software business models Introduction to various Open Source business models like. Support Sellers Loss Leader Widget Frosting Sell It, Free It

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Open Source Business Models A brief introduction

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  1. Swati Sani C.E.O. SANIsoft Nagpur, India Open Source Business ModelsA brief introduction

  2. What is this talk about? • Overview of traditional software business models • Introduction to various Open Source business models like. • Support Sellers • Loss Leader • Widget Frosting • Sell It, Free It • Service Enabler • ... ...

  3. I am not going to talk on... • Merits / Demerits of various Open Source software licenses • Business model of any specific company • Neither to argue for the superiority of the open source business model nor to claim that traditional software business model can and must be completely abandoned Use it if you like it!

  4. Traditional Wisdom!? "Competition is. In every business, no matter how small or how large, someone is just around the corner forever trying to steal your ideas." Alice Foote MacDougall - 19th century American Business Woman

  5. Traditional software business • Development of new products • Brand enhancements and advertising • Selling your customer the right to use your product • Selling Technical Support

  6. Common Open Source Models • Support sellers • Loss Leader • Widget Frosting • Accessorizing • Service Enabler • Brand Licensing • Sell It, Free It • Software Franchising • Hybrids

  7. Support Sellers • Base software free • Sources of revenue • media distribution • Branding • Training • Consulting • custom development • post-sales support

  8. Loss leader • Free software helps selling the traditional way by giving away for free a part of software to • Build the brand and reputation • Add Value to the traditional products :making them more functional and useful • Increase the overall base of loyal customers

  9. Widget Frosting • Companies selling widgets (hardware) • using/providing open source drivers and allied software • Earning goodwill, generating physical goods sale

  10. Accessorizing • Distribution of physical items such as Books for opensource • Creating awareness of opensource • Generating brand loyalty for themselves

  11. Service Enabler • Create a software - give it free • Sell the services or subscription related to the software thereby generating revenue • Similar to Loss leader but different in of execution.

  12. Brand Licensing • Open the source of your product but • Retain brand reminiscence and Intellectual Property rights • Customers pay for license to use your product

  13. Sell It, Free It • Loss Leader'' model repeated and extended through time • Sell your product the traditional way • For adding to product life cycle, open it after a certain length of time • Timing: When you free it is very important • Your customers pay a premium for the value of having the software earlier rather than later

  14. Software Franchising • Lack marketing power? • Give your product free to the appointed franchisees • Train them • Revenues would come from sources such as sales of franchises and royalties based on franchisees' revenues

  15. Dual Licensing • Non Commercial usage are licensed under one of the open source license (Most often GPL) • Commercial usage Charged

  16. Conclusion... "With a market as large as the world and as competitive as the Internet, sharing knowledge with your peers might be the only way to stay in business." Swati Sani – CEO, SANIsoft

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