After reading my note, I see I wasn't specific. I was referring to IBM's
ability or rather inability to do this effectively. Certainly you probably
don't charge more than $300/hour for services. 

-Bob Cozzi
If everything is under control, you are going too slow.
- Mario Andretti

-----Original Message-----
From: web400-bounces@xxxxxxxxxxxx [mailto:web400-bounces@xxxxxxxxxxxx] On
Behalf Of Pete Helgren
Sent: Wednesday, July 20, 2005 9:14 AM
To: Web Enabling the AS400 / iSeries
Subject: Re: [WEB400] RE: CGIDEV2


Not sure what myth you are referring to.  We started the company in 
2003.  We sell only services, no hardware (obviously, based on my last 
post) and no software.  The first year we had a little less than a 
million in revenue and this year looks like, perhaps, 2 million.  Small 
potatoes, yes.  So perhaps the business won't scale well over time and 
the services only orientation will collapse under it's own weight.  I 
remember that when we started and the president of the company said we 
wouldn't charge for the software and it would be open source: I looked 
at him as though he had two heads.  But I am a believer now. 

But, without going into all the rationale behind this approach, the best 
thing about this "open source" orientation is that we have a user base 
that is fully engaged in the the life of the product now.  It is theirs 
since they have full access and rights to the source.  So, we are off 
the "upgrade treadmill" that a company like Microsoft (and perhaps IBM) 
can get on.  The users arbitrate among themselves as to what is 
important to them in new development and some of that development is 
beginning to be shouldered by them.  They are donating in house code 
that benefits the entire community.  The pre-2000 idea that it is the 
company's responsibility to plan and develop all the software is 
diminishing (much to my relief!) .  So far, I see no downside to this 
approach.  But it IS still early and we are small so I guess the future 
will tell.

Anyone who thinks that just giving away the software to generate 
services revenue will be a viable business model will be disappointed.  
However, lowering the cost to the customer, making them part of the 
process by giving them source and giving them training and support on 
how to use the tools to improve their business, encouraging 
collaboration and sharing, THESE approaches are working for us (so far). 

It IS 2005 and it is a whole new world, to be sure.

Pete Helgren

Bob Cozzi wrote:

>I don't know.
>I suppose one could think that if you have open source, people will come
>knocking and then you can "sell them services".
>"Sell them services" the myth of the early 2000's. 
>If I'm looking for free software, am I then going to say, "Oh sure, IBM,
>I'll sign a contract for $300+ an hour to services."  
>I don't know, but last I checked, it was 2005, not 1985 or 1996.
>-Bob Cozzi
>If everything is under control, you are going too slow.
>- Mario Andretti

This thread ...


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