"When people ask me for examples of open source CMS that really might be
considered as alternatives to the current major commercial systems, I
often cite .LRN as one potential example. It's been built from the ground up on a portal framework and already contains a host of tools
one would recognize from conventional commercial CMS (and apparently
there is now a related LOR component as well). This announcement of
self-test SCORM compliance is another piece of good news for them. - SWL"
It's time to do a series of postings on strategy as a way to motivate myself to understand it. Michael Porter's (even if he is from Harvard Business School :) ) Competitive Strategy: Techniques for Analyzing Industries and Competitors (originally published in 1980) still stands as the classic work in the field. Unlike most management books, it's free of jargon and clearly written.
Porter notes that ultimately there are three approaches (i.e. strategies) for outperforming other competitors in the industry.
overall cost leadership
Overall Cost Leadership. A couple of years ago I visited Dell Computer for an Executive Briefing. One theme came across loud and clear in everyhing they do. They are relentless in cost cutting. What penny pinchers I thought! But Dell has written and re-written the book on seizing overall cost leadership. First, they started with desktops, then laptops, then servers, then printers, and the list goes on and on. As Porter notes, "a cost leadership strategy can sometimes revolutionize an industry". Dell has and continues to do so in the way it manages its supply chain.
Differentiation. Differentiating a product or service means creating a product or service which is perceived industrywide as being unique. How about that iPod? Apple's iPod is not unique as a digital entertainment device. But its style and design are. This results in brand loyalty and lower sensitivity to price. I'm willing to pay extra for my iPod!
Focus. The third generic competitive strategy is focus. It can take many forms but the basic objective is to focus on a particular market segment or buyer group. Adobe (not now but in its original reincarnation) focused relentlessly on the "prosumer" (blend of professional and consumer) market by turning out high end products for graphic designers, artists, and publishers. Adobe hit a nice sweet spot by serving not only professionals but a wider market of those who want goods of a better quality than consumer items but can't afford professional items (hence the term prosumer). (note: Adobe is in the midst of reinventing its strategy to target the enterprise.)
Now here's Porter's most important point. "The three generic strategies are alternatives [emphasis mine], viable approaches to dealing with the competitive forces. The converse of the previous discussion is that the firm failing to develop its strategy in at least one of the three directions -- a firm that is "stuck in the middle" -- is in an extremely poor strategic situation."
Venture capitalists are flocking again to open-source. The NY Times, in a recent article, notes, "In 1999 and 2000, according to VentureOne, venture capitalists invested $714 million in 71 open-source companies. Most of those projects collapsed." Have the VCs "lost their minds again"?
Things have changed. There is increased adoption of open-source in the corporate world. Red Hat seems to be a success. Linux is here to say. And a significant number of open-source applications are beginning to blossom.
We need a taxonomy of business models for open source. No. There are no new business models. But there are variations and creative ways of bundling products and services.
A recent entry SpikeSource (with Kim Polese as the chief executive) has garnered a lot of attention. What's their business? A better name for the company would have been "GlueSource": they see a market for a third party to "glue" together and harmonize the variety of proprietary and open-source software. Kim Polese: "We see ourselves as the go-to company for interoperability issues."
SugarCRM has a different take on open source. They offer two different versions of a CRM solution. Note that what they are offering is not two different licenses for the same product. I haven't quite figured out this one yet because the price for their "Professional" version is quite steep (roughly $250 per user per year). The Professional version is described as a "superset" of the basic version, which is open source. The professional version is not open source but "visible source". That's the first time I have heard that one. I guess it means I can look at the source code. I guess there is some good in that, but what is it? Is SugarCRM make believe open source? As I said, I haven't figured this one out yet.
Andrew Grumet in his weblog relates "a slice of podcasting history". "Looking back, it's been a pretty interesting year, wouldn't you say guys?" Andrew and I were in Heidelberg just about a year ago and on his way back he had planned to meet up with Dave Winer and Adam Curry in Amsterdam. Over the next few months I began to hear snippets from Andrew about RSS enclosures, iPodder, and Podcasting. How quickly it all came along in a short period of time. Here's a toast to Adam Curry for seeing it and making it happen! Andrew's toast: "I think it's been a great year for RSS and, more importantly, for users." Hear Hear!