Jeff Nolan is a maverick thinker (which is why we get along methinks), and has never universally towed the party line on his blog. He's always been willing to challenge the status quo of the software industry and his own juggernaut employer; SAP. While Jeff's post yesterday isn't an entirely new idea (philosophically this is an extension of the Oracle abandoning license revenue conversation from a few months ago), the fact that it's coming from an SAP executive (maverick or not) is sure to engender a lot of attention and discussion.
If you think objectively about pricing trends in enterprise software you can easily come to the conclusion that almost all software should be free or nearly free. I’ll sidestep the entire topic of open source because while that segment is certainly a participant, I don’t believe it’s the main driver. Also please note that this post is pretty rough in terms of having thought it all through… in other words, I’m thinking out loud here.
Now, as compelling as the headline "Software should be Free" may be, Jeff has a much more nuanced approach to this discussion in the following paragraphs (please read the entire thing). Ultimately his contention is that software companies could maximize their lot in life if they embraced the idea of "core" software as free, with the ancillary extensions, customizations, and value add services costing money.
Whether you agree with Jeff or not, it strikes me that this is somewhat of an implicit endorsement of the open source model. The code = free, and you can do with it what you want (i.e., the core); but if you want to leverage that code (e.g., enterprise scale, testing, security, extensions); you may be better off paying a vendor who's already done the work or is capable of doing it better than your internal IT guys. When you consider that Jeff was part of the decision process that led to SAP Ventures' investments in Red Hat, Zend, Black Duck, mySQL; Jeff's post appears more a continuing evolution of thought than a revolutionary one.
- Is Oracle Abandoning License Revenue? (Jason Wood)
- Fighting Yesterday's War (Jeff Nolan)
- Oracle: New World Order (Vinnie Mirchandani)
Note: At the time of this writing I, and/or funds I maintain discretionary control over, maintained long equity positions in ORCL and SAP, but did not maintain a short equity position in any companies mentioned. We may also, at times, carry derivative options on underlying equity positions as a hedge.
sap open source license revenue pricing jeff nolan free software woodrow
we just came across the firstly clearly positioned "enterprise" software supported by adwords we have seen. Spiceworks is a software asset management and monitoring tool called Spiceworks. Its written in Ruby ln Rails, looks quite pretty, provides useful enterprise functionality out of the box, and its free, as in no fee.
Posted by: James Governor | July 31, 2006 at 06:00 AM