Open Sources | Rodrigues & Urlocker » Rumor Mill: SpikeSource changing sales model

January 18, 2006 | Comments: (0)

Rumor Mill: SpikeSource changing sales model

TAGS: Open Source

This post is based entirely on unsubstantiated rumor. Word on the street is that SpikeSource is making the move to a new channel focused strategy. I don't want to gloat, but I told you that the existing business model was not sustainable. Unfortunately, I don't see how a channel model would work either.

There is no channel when it comes to software services. SIs won't give up the revenue to another services partner, it's an inherent conflict. And while channel deals are great for distribution (HP with JBoss or MySQL) there is no precedent on how much revenue can be derived from such deals. SIs will just build their own stack, or get a complete solution, including the OS from a big player like RedHat.

People are hell-bent that open source is all about services, but take a look at the companies that are doing well and you'll see that they also have products. MySQL has a product, same with OpenLogic and ActiveGrid. You can only rely on services revenue when your products reach a level of market share that creates demand for services. Products lead to services, not vice-versa. This is exactly the reason why RedHat is doing so well.

I stand behind the notion that companies will end up paying for open source software and services from the vendor whose products they rely on. If I need certified LAMP, I'll buy from RedHat, if I need certified AMP-J I would buy from JBoss (if they offer it.) There are few to zero scenarios where I would buy support services from SpikeSource or SourceLabs.

Note: I don't know anyone at SpikeSource or SourceLabs, nor do I have any personal vendettas. This is simply an analysis of the business models.

Posted by Dave Rosenberg on January 18, 2006 10:55 AM

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