does Ubuntu get the enterprise?

[Michael T. Richter]

On Thu, 2007-25-01 at 12:02 +0100, Matthew East wrote:

> Personally, I think it's nonsense. I don't feel safer with software if I
> have to pay for it or not, what's important to me is the reputation of the
> software, its stability and security history. 


You are not a businessman, then, obviously.

Anecdote time: I worked for a company for a while that made a niche
product for a niche market.  (Niche of a niche, basically.)  It was
small, but it was doing OK.  The software was stable and the company had
a good rep.

But it wasn't growing the way it should have been.

The owners of the company hired a marketing consultant to take the
company to the next level.  After reviewing everything, the consultant
basically said "you're selling the product too cheaply".  He recommended
the company raise its prices across the board -- the core product went
up by an order of magnitude -- and also recommended a set of packages be
sliced off the core and sold as extras.

This was all timed to coincide with the next big release of the
software.  Sales shot through the roof and the company reached its next
level.

A few years later I switched companies and again witnessed this process.
In this case the product was a toolkit.  Again the recommendation from
our marketing staff (in-house this time, not out-of-house) was to raise
the prices across the board.  And again sales boomed.  This time there
wasn't even the excuse of a new major release to fall back on to explain
away the sales increase.  We just raised our prices across the board and
sold exactly the same product in exactly the same market.  And yet sales
boomed.

In yet another company, I was tasked with technical evaluations of some
software we needed.  (Toolkits again.)  I had five vendors' products to
evaluate and a set of criterion by which to evaluate.  (This is actually
quite rare in business! :O)  I did the evaluation right down to
evaluating technical support response times.  One company stood out.
They met all of the technical requirements and had the best tech support
by far.  (Further, their product and its documentation were so good I
doubted we'd need to use their tech support.)  And they were the
cheapest.  Eventually the second-place company was chosen -- despite
their product (although of high quality) being underdocumented and their
technical support being, basically, "how much did you say you want to
pay?"-level quality.  The reason given?  Their price was four times
higher, so they obviously were much more confident in their product.
(That's almost exactly the wording used.)

It is a mistake to think that businesses are run by rational people who
crunch the numbers.  There's a whole lot of other factors involved
including prestige, empire building and even softer influences than
these two.  And lurking somewhere in the back of your average buyer's
mind is the notion that if a company charges, say, $10,000 for a product
and another company charges only $1000 for it, the first product must be
ten times better.  (Yes, I know it's hogwash.  You know it's hogwash.
That's probably why we're not CEOs, CFOs or CTOs....)

Then there is also the liability angle.  If you use a free-as-in-beer
product, there's been no exchange of consideration and, therefore,
little to no room for tortious action.  Companies -- large enterprises
especially -- just *LOVE* to have the ability to point fingers.

So, in short (I know, too late!), I agree with that article.  The
"free-as-in-beer" product does hurt Ubuntu in the Enterprise.
-- 
Michael T. Richter
Email: ttmrichter at gmail.com, mtr1966 at hotpop.com
MSN: ttmrichter at hotmail.com, mtr1966 at hotmail.com; YIM:
michael_richter_1966; AIM: YanJiahua1966; ICQ: 241960658; Jabber:
mtr1966 at jabber.cn

"Thanks to the Court's decision, only clean Indians or colored people
other than Kaffirs, can now travel in the trams." --Mahatma Gandhi
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