April 14, 2009

From downloads to dollars

How exactly does Sun make money with open source?

Sun CEO Jonathan Schwartz wrote a four-part blog posting a few weeks ago describing Sun's overall business model and how it makes money from open source. The basic idea is to go from adoption to innovation and then commercialization. It's a pretty high-level description, and some readers might have been left wondering exactly how those steps are linked.

That's what I've been working on for the last several months as I took on a new role inside of Sun to run a group called Lifecycle Marketing. The name Lifecycle Marketing is uncommon, but it refers to accelerating each stage of the customer purchase process. In other words, take the notion of going from software downloads toward commercialization with actions and automation that make each step more efficient.

[ Cut straight to the key news for technology development and IT management, with our once-a-day summary of the top tech news. Subscribe to the InfoWorld Daily newsletter. ]

My goal is to take best practices from MySQL, Sun, and elsewhere in the industry and fill the sales pipeline for all of Sun's products. There's a large class of products that can benefit from the high-volume/low-touch lead generation, nurturing, and scoring approach that we built at MySQL. One of the goals I set for the team was to increase the "top of funnel" inquiry or raw lead volume for sales. While Sun has lots of Web traffic and tens of thousands of downloads per day, we aren't necessarily giving prospects the opportunity to put up their hand and say "I'm interested, tell me more." This is an important linkage between adoption and commercialization. Our open source users represent a hidden installed base to whom we can offer software subscriptions, servers, storage, training, or consulting. The key is in identifying people's interests through marketing and analytics. We don't expect to monetize every user, but that's OK.  In many cases, we're receiving tremendous value through their contributions, ideas, bug fixes, or word-of-mouth promotion.

additional resources
White Paper - How to Improve Delivery of Advanced Web Applications

White Paper

Virtual Workforce: The Key to Expanding The Business While Cutting Costs

Get the independent advice and expertise you need to support a virtual workforce.

Go inside:
The three-step approach to making a virtual workforce a reality.
The four flavors of client virtualization technologies.
The three key initiatives that solve IT challenges.
Download now »
White Paper: Successfully Secure Your Wireless LAN With Wi-Fi firewalls.

White Paper

Addressing Linux Threats Leveraging Fewer Resources

The increase in Linux popularity has increased the frequency and sophistication of malware attacks. Read this 2 page white paper now to learn how you can protect your Linux environment with real-time protection that is certified by all major Linux vendors.

Download now »
White Paper - The 2009 Handbook of Application Delivery

White Paper

The 2009 Handbook of Application Delivery

Ensuring acceptable application delivery will become even more difficult over the next few years. As a result, IT organizations need to ensure that the approach that they take to resolving the current application delivery challenges can scale to support the emerging challenges. This handbook elaborates on the key tasks associated with planning, optimization, management and control and provides decision criteria to help IT organizations choose appropriate solutions.

Download now »
White Paper - Is Your Backup System Outdated?

White Paper

Mid-range Storage Considerations

A common misconception is that mid-range storage requirements are dramatically different than that of a larger enterprise. Mid-range storage users may require less capacity, but they have similar functionality and management requirements. This ESG paper examines mid-range storage needs and reviews a new solution that adjusts size while retaining value, performance and functionality.

Download now »
MarcL 14-Apr-09 10:23am
your high level description of the oss marketing process at sun is nice validation from my perspective. as a 'lifecycle' marketing person at an oss company, aras http://www.aras.com, we use these same techniques. only difference is that as a start-up i have full process ownership and visibility from download to initial purchase and follow-on purchases. we've zero'd in on volume and conversion and are working on improving both. using lead scoring and predictive measurement we've concluded that the critical step is first po (not cc payment). this is an incredibly strong indicator of 'propensity to spend' and provides a mechanism to act upon. give them many 'bite sized' opportunities to buy something and make them get a po. po is also a definitive step. no ambiguity about a it - you either get the po or you don't. scaling an oss business (particularly a start-up w/ limited resources) requires acute focus on commercializing the relationship in my opinion. otherwise, you risk getting consumed by the community and resources get stretched too thin. people can get all the freely available sw, info, and reference materials, however, at the end of the day if they desire value add services and commercial offerings that requires cash. the sooner a business prospect is classified, the more efficient the process. just my 2 cents based on our experience. i like your piece and look forward to further expansion in the future for ideas. marcl

Sign up to receive InfoWorld Resource Alerts

Subscribe to the Today's Headlines: First Look Newsletter

Find out what will be news for the day, with our first-thing-in-the-morning briefing.

©1994-2010 Infoworld, Inc.