Posted on | October 7, 2008 | 1 Comment
Vendors of proprietary software took a hit in September, the hit is attributed to the current U.S. economic crisis. Small businesses just don’t have the cash to spend on software when free alternatives exist. Sure, they may have to bring the free stuff up to par .. but its cheaper for them to do so if they have in house programmers that hope to avoid layoffs. Moreover, this crisis will pass .. which makes them look at how much they’ll spend in 10 years using your stuff. Additionally, the author(s) of said free stuff can be retained (typically) cheaply in most scenarios while producing better code than you do.
Some vendors can wait it out, they have enough capital through various ‘angel’ venture capitalist investors to not be worried. However, many companies received ‘just enough’ capital to bring a product to market, ‘just enough’ based on the way things were a year ago or more. Those companies are rapidly getting ‘cut off’.
The wallet hits are going to continue as lines of credit dry up. How to stay successful? Its easy:
- Give your software away, make it free under some OSI approved license. The GPL2/3 will probably suit your needs, you can always dual license.
- Sell customers what they need, in their eyes its _just_ the right amount of support. Often this will exceed or equal the amount that you’d gain via licensing. Set up a community, gain praise and ‘Google Juice’ .. enjoy free code from your competitors, build on it and make your product even better. If your competition butchers your code, that’s an edge.
- Watch lines of code and profit on balance sheets accumulate while lines of credit that feed your competitors dry up.
Or, call it quits now .. its up to you. It may be five or more years before companies who actually use, endorse and promote your stuff can afford its sticker price, never mind additional support contracts. People want to pay only for what they use, especially in this day and age.
If you don’t want to open your stuff, consider providing support with no questions asked to people who obtained your stuff via some illegal means (i.e. The Pirate Bay). Again, you make something out of nothing.
It boils down to .. you can make something .. or nothing .. its up to you and how much you owe