There are many different mechanisms behind OSS adoption, and understanding the differences makes it easier to help companies in using them efficiently – after all, word of mouth may be sufficient to get visibility, but it may be not enough to guarantee adoption, and then converting this adoption into paid services.
In fact, monetization may require a large number of “adopters” to get a small percentage of “paid users” – in many domains, only 0.05% of adopters pays for services, a percentage that we call “unconstrained monetization percentage” or UMP to make it sound more academic.
While it is true that the incremental cost for the OSS company of having a new adopter is zero (or extremely small), the increased adopters base also increments the probability that the community or some competitor will start to address the same monetization path, thus further reducing the UMP. So, to take the example of MySQL, instead of asking services or training to Sun, an adopter may opt for a local consulting firm that effectively leverage the free availability of the code and ancillary material to create a competitive entry.
Of course, the business model adopted by the OSS firm also has a positive or negative effect on the growth process in the number of adopters; this especially affects firms offering what we called “split OSS/commercial” or “open core” licensing that are forced to constantly adapt the features of the OSS and commercial parts; as we wrote:
“The model has the intrinsic downside that the FLOSS product must be valuable to be attractive for the users, but must also be not complete enough to prevent competition with the commercial one. This balance is difficult to achieve and maintain over time; also, if the software is of large interest, developers may try to complete the missing functionality in a purely open source way, thus reducing the attractiveness of the commercial version. ”
In other words, if the OSS product is too good, few will be interested in getting the commercial part, while if the OSS product is useless, the number of “adopters” will be too low to increase visibility of the product. This balance changes with time, and for this reason companies adopting this model need to constantly update their offering, and evaluate with time how to split the development effort across paid and OSS branches.
As I wrote in the beginning, there are many different adoption processes in open source software; some of those mechanisms are:
- cluster propagation
- directed incentives
In the following posts I will try to provide some insight into each, and how to help an OSS company in leveraging the relevant process to help in both adoption and monetization.