author:Shen Yang

Commercialization seems to be a relatively common word, and it seems to be contrary to the concept of open source. However, if there is no commercialization at all, I am afraid that the open source model will not be sustainable.

Commercialization, from a simple point of view, is to ensure the positive cash flow (value flow) of an organization or individual. In an already highly commercialized society, most goods and services are exchanged through money and market pricing. If an organization does not have positive cash flow, it will eventually go bankrupt and dissolve; the same is true for individuals, if there is no positive cash flow, it is impossible to maintain the continuous survival of individuals and families. If open source is not linked to commercialization at all, then open source will only become an aristocratic way of working, and only those companies with sufficient monopoly cash flow in the industry or individuals with financial freedom can continue to engage in open source.

The essence of software commercialization is to use the code, architecture and software built by engineers’ ingenuity to help enterprises and individuals reduce costs and increase efficiency, so as to obtain business value. Economically speaking, if the transaction cost of a commodity or service is too high, its transaction volume will be difficult to increase. The transaction cost of software has always been a problem. Customers pay money and do not know whether they can get what they want; sellers are also very embarrassed. They have put in a lot of effort and do not know whether customers will be satisfied.

Friends who are engaged in software sales and procurement may have the feeling that the transaction cost of software is too high compared to hardware.Hardware is often made into a “box with a fixed shape”“, production costs and R&D costs are easy to define, financial and auditing are easier to make decisions, hardware has very clear parameters, and there are clear fault boundaries and liability clauses. The software is dependent on hardware, and depends on the combination of other software in order to provide customers with corresponding functions. Compared with hardware, the requirements of software are difficult to confirm and change frequently, the boundaries of software are difficult to define, and troubleshooting of software is more complicated. For finance and procurement, software is like a fog.

But the charm of software lies in its flexibility. Software is eating everything. Many hardwares also use software upgrades to provide more functions. Even cars are starting to use them. OTA The remote upgrade (Over The Air) method enhances the product experience.

For customized software, its reproducibility is low, business costs are high, and iteration and maintenance costs are high. For many software customization projects, the final pricing method is based on the service pricing model of Rentian.For ordinary business software, the business negotiation process is also very opaque, and the customeruseexperienceand encounteredProblems are difficult to be fed back to the product side in a timely manner, and they often need to be fed back to product sales and then to the product team through the internal IT of the enterprise.

along with Salesforce Launched “No Software“under the banner of SaaS ‘s subscription model is starting to gain popularity. Compared with traditional software, SaaS The biggest feature is the reduction of transaction costs, most SaaS Software pricing is relatively transparent, and the discount range is not as large as that of traditional software.Customers can often sign up and try out on their own SaaS software,

You can try it first and then pay, or you can try it out in a low-cost and small-scale first, and after the business scenario is successfully run in, it can be promoted on a large scale.In addition users use SaaS softwareofwhen,CanFeedback is always on the cloud, and any problems can be tracked and responded to in a timely manner.

At onceIn terms of open source, transaction costs can be further reduced, and customers can not only try it out directly, but also modify or customize the software for some customers with strong capabilities.wantLarge-scale use,CanThen find open source software vendors to buy services or other commercial products.

Open source has developed to this day and is becoming the mainstay of modern enterprisesofSoftware development and production methods.in the operating system,database,browser,IDE,development tools,Application Architecture,smart devices, etc., haveHaveMore and more software vendors and individuals are also participating in the construction of open source.

The first step in open source is openness, which means openness and transparency of the code. Even for many commercial software, if the code can be open and transparent, and the cost of transaction and information communication can be reduced, it can also bring many direct or indirect commercial benefits.

Direct feedback from customers

Since the code is visible, customers can directly check the quality of the code. These professionals often have a lot of industry experience and are direct users of actual business scenarios. They have the best say in how the software adapts to the real world.

traceability

In those scenarios with complex hardware and software environments, through code opening, customers can discover problems by themselves, or narrow the scope of the problem, locate the problem on a specific software code, and reproduce the problem in a simpler software environment. It will be more efficient to communicate with software vendors.Professional software manufacturers may not be very capable of software that does not belong to their own scope.“ofPhenomenon.Those trivial problems often have high transaction costs if they rely on third-party services. The cost of professionally formulating a service contract of tens of thousands of yuan may be the same as that of millions of yuan.ServeThe contract is about the same.

transparency

existIn some business scenarios that are sensitive to data security, customers can track and discover data or business logic problems without worrying about sensitive data leakage. In addition, the customer can see how the data is processed, whether it is stored separately, or transferred to an environment outside the customer’s control.

ecological prosperity

existIn the open software ecosystem, partners or customers can customize solutions for special business scenarios and feed back new solutions to software vendors and communities. It is difficult for a single software manufacturer to understand different complex business scenarios in various industries in various regions of the world. For example, an application development engineer in Germany may have difficulty understanding the changes in fiscal and taxation policies in Argentina.Through openness, software vendors can greatlylandExperiment with the leverage of ecological partners and communities.

Product Lifecycle

The life cycle of traditional business software is often decided by individuals or companies, but when personal life changes, or when corporate organizations undergo frequent adjustments, for example, after a large software company acquires a small and beautiful software company, it is often necessary to do so. With a choice of two decisions, the development of some good software may be suspended or even forcibly shut down.andrightopen source softwareIn terms ofas long as the community remains active, the productofThe life cycle can go on forever.

many softwareofDecision-making costs and transaction costs are much higher than their subsequent use costs.

The billing method of traditional software may be quite complicated, such as charging by the number of users, charging by the number of CPU cores, charging by traffic, charging by functional modules, and charging by the number of interfaces. These complex pricing strategies may prevent customers from correctly estimating the cost of using the software in the future.

The cost can make people ignore most pain points, so that people have to give up professional market-oriented services and turn to DIY self-serving model. Because of the transaction costs caused by inconvenient transportation, most of the residents in remote mountainous areas are self-sufficient; because of the cost of trust, the supply and demand in the field of childcare have been squeezed, and most families choose to rely on themselves or relatives Help with children; because of business costs, in some countries with high medical expenses, residents rarely go to the hospital for minor illnesses and pains, basically relying on their own immunity, and occasionally relying on relatively low-cost painkillers to get through the difficulties .

For various reasons, open source has brought a new way of experience to users, which greatlylandVarious costs and risks are reduced.

Because of extremely low transaction costs and usage costs, open sourcesoftwareThe speed of dissemination is very fast, and good software can quickly spread and occupy the market, but because open source also gives users “no payment”“rights, making its commercialization extremely difficult.

since 1970 The Metropolitan Museum of Art (Met) in New York has pursued a voluntary payment policy since 2010, and adults are officially recommended to pay 25 There is a USD tour fee, but visitors may pay more or not at their discretion. Such a policy is undoubtedly a benefit for poor families or tourists.But the average visit fee received by the Metropolitan Museum of Art in New York is per capita 9 dollars, such income does notarrivenormal operating expenses of the museum 15%, and the percentage paid in full has decreased over the past decade or so 70%. With such cash flow imbalances, 2018 The Metropolitan Museum of Art in New York charges all non-New York resident adults 25 Full dollar tickets.

The Metropolitan Museum of Art in New York is undoubtedly a boutique in the museum, and the visiting value of its collections can also be recognized by everyone, but even such a boutique, in the “open source”“The road to commercialization has also become extremely difficult.Humanity is hard without the pressure of the environmentcan standtested.

The commercialization of software may have the following paths:

1. User donation

These softwares are often found in niche software created by individuals. The developers maintain their works with their feelings and enthusiasm, and those who are touched can donate to the project by themselves. But the example of the Metropolitan Museum in New York shows us that it is difficult to maintain the cash flow of the project in this way.

2. Commercialization by service

Software is a complex project after all, even if the code is open, but if the project is large enough and complex enough, it is still difficult for ordinary customers to completely rely on their own capabilities to cover all aspects, such as software installation, optimization and customization. The efficiency of factory services can exceed their own blind tossing. However, the commercialization model of service depends on the scale of service personnel, and its leverage effect is not as good as that of software itself.

3. Different licenses

Some software issues different licenses to different users, such asrightSmall businesses with less than 50 employees or businesses with revenue of less than one million, the software is completely open source and free, but there are different licensing methods for large enterprises. Just like the Metropolitan Museum of New York, it still maintains a free policy for minors or local residents of New York, but it adopts a charging policy for tourists from other places.

4. Packaging new services and products in the cloud

In the past, when software was not well sold in China, many hardware manufacturers would sell software as an accessory of hardware.Many open source companies today do the same, packaging open source software into cloud services and SaaS Provide services to customers to obtain business value. In this regard, open source vendors, on the one hand, serve as distribution channels for cloud resources, and on the other hand, deeply customize their products on the cloud, such as higher performance indicators, lower latency, lower failure rates, etc. , for a higher value.

However, in recent years, open source products have also been challenged by cloud giants. Some cloud manufacturers have also repackaged and distributed various open source products through their own strong technical strength, which not only threatens the business space of the founding manufacturers of open source products, but also It also refuses to give back new iterations to the community, causing division between the community and users.In this case, many open source products,for example MongoDB ,Redis The original open source agreement has been modified, and cloud vendors are not allowed to continue to dig wool.

Morally speaking, such a one-way swipe of wool by cloud manufacturers is not in line with the concept of open source.But from a technical point of view, if an organization cannot iterate on the same producthave toFaster and better than cloud vendors, and losing control of this technology space in the long run.

5. By means of advertising

There is direct advertising monetization, such as direct placement of advertisements in software. There are also indirect ways. For example, large enterprises use a small and beautiful open source software to enhance their brand influence and increase the sales of other non-open source software products and services. The expenditure on open source software is equivalent to reducing the marketing and advertising expenses of corporate policies. .

The way that the core is open source, but the peripheral advanced functions are not open source, can basically be regarded as a disguised advertising model for commercial realization. There are also companies that release patches and code iterations in advance in the commercial version, and then delay the release to the open source and community versions, which is similar in nature.

6. By way of operation

If a product does not rely on software commercialization, but on operation, the first thing that everyone can think of is “open source software” similar to Bitcoin and Ethereum.“. In this scenario, the software is just a tool, and other resources are required for the continuous operation of the entire scenario.The code of the software itself is completely open and can be changed, but the resources needed to run the software may need cash flow support, such as mining behavior in the blockchain, such as playing an open sourcegamePerhaps paying for scarce items, using an open source stock trading software might pay for channels.

The commercialization of open source is essentially about the value of users and the contribution of developersmiddleFinding a better balance makes the decision-making cost of users extremely low, the cost of use is appropriate, and it can also bring good benefits to developers.

If the Metropolitan Museum of Art in New York couldeliminateIt is undoubtedly a better balance to charge the proportion of the real income of each visitor, for example, for every hour of visit, it is necessary to pay the visitor 10 Minutes of income, and you can set a ticket-free income range. Such a billing method is undoubtedly beneficial to those with low incomes, but it can also obtain more cash flow from high-income groups.But such a business model requires more transparent information exchange, perhaps in Web3.0 It can be done here, and when the exchange of value can be programmed, everyone’s tickets can be dynamically priced.

When the smart contract technology of the blockchain became popular, many developers were very excited that the pricing model of software could be overturned, and the code could be charged according to the number of times it was executed.However, the performance and architectural bottlenecks of the blockchain make it impossible to act like an operator’s BOSS (Business & Operation Support System, BOSS) system implements large-scale billing methods. At present, the open source billing system relies more on the base of the public cloud. In the private cloud, it may only rely on proprietary hardware or a sandbox environment that is more open, transparent, and easier to verify.

About the Author

Mr. Shen Yang is currently the Vice President of Lianyirong and has extensive experience in consulting, delivery, IT management and R&D management. Mr. Shen used to be the vice president and CIO of Digital China Group Co., Ltd., and the head of the cloud base. He was mainly responsible for digital transformation, cloud base construction and technical operations, and private marketing operations. He led cloud infrastructure, blockchain, and quantum applications. , intelligent operation and maintenance, distributed database, open source ERP and other fields of development management and delivery work.

Before joining Digital China, Mr. Shen Yang worked at SAP for ten years, as a consulting technical architect in SAP USA, leading international professional services in the fields of data analysis, EPM (Enterprise Performance Management) and GRC (Governance, Risk and Compliance) team. He has provided digital transformation consulting services for more than 150 Fortune 500 clients.

the public:Informatization and Digitization

Enterprise informatization strategy, digital transformation, open source, SaaS, enterprise product selection, ERP consulting and practice, technology and business operations.

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https://oscimg.oschina.net/public_shard/opensource-guanzhi-20220915.pdf