| Abstract: |
From a commercial open source company's point of view, open source is ideally
the ultimate in “grass roots" marketing where people learn by word-of-mouth
about the project and where they volunteer their time and effort, resulting in
a vibrant community that benefits the company in many ways. This enables an
open source company to enjoy major advantages that do not normally accrue to
proprietary software companies e.g. they do not need to spend resources on
traditional marketing activities and furthermore, having this community
support can help ensure the longevity of the project and company. While this
ideal may apply to a handful of open source projects, where they achieve a
large critical mass of a community which lends itself to a natural form of
monetization, for the vast majority of open source companies, it is not the
case of “build it and they will come”. Instead, most open source companies
need to understand who comprises their community so they can formulate a
viable business model. In particular, they need to understand that communities
are comprised of heterogeneous types of people, each of which have their own
interests, motivation, needs and ability to be monetized. Open source
companies need to identify the subgroups in their community, decide which ones
to deliberately focus on, and choose the best way to leverage them. This is
indispensable for determining how best to monetize the interest in their
software, ideally without ruffling the community spirit that differentiates
their software from proprietary offerings. And this is where “old fashioned”
marketing can help. This means understanding your user base and what makes
them tick, determining their needs, and formulating products and services that
people are willing to pay for. The sooner an open source company understands
that it needs to practice traditional marketing techniques such as
segmentation and target marketing, the faster they will hit on the business
model formula that enables their company to succeed. These techniques need to
be adapted for the open source world, which requires the blending of
traditional marketing techniques and community relations. The risk of treating
one's community in an undifferentiated manner and applying a generic,
formulaic business model is that a company will fail to generate significant
revenue as well as alienate a community that could abandon them. As a
community is perhaps the most distinctive asset of an open source company,
losing its community is tantamount to death. If the community is not properly
nurtured and leveraged, an open source company's potential will not be
realized. This paper aims at describing, through case study research, a
generic approach for how commercial open source companies can segment their
community to aid in their formulation of a business model and marketing plans
to reach their potential. It is for anyone who works in an open source company
or project who is trying to determine a viable business model. The paper is
structured in three parts: the first part outlines the research question and
methodology. The second part proposes a way that an open source company can
segment its community. The final part analyzes the Funambol experience,
describing how the company segmented its community and created open source
programs to nurture and leverage it. |