Showing posts with label business models. Show all posts
Showing posts with label business models. Show all posts

21 December 2007

Kids Today - The People Tomorrow

Nice story here:

I just could not find a spot on the spectrum that would trigger these kids' morality alarm. They listened to each example, looking at me like I was nuts.

Finally, with mock exasperation, I said, "O.K., let's try one that's a little less complicated: You want a movie or an album. You don't want to pay for it. So you download it."

There it was: the bald-faced, worst-case example, without any nuance or mitigating factors whatsoever.

"Who thinks that might be wrong?"

Two hands out of 500.

Now, maybe there was some peer pressure involved; nobody wants to look like a goody-goody.

Maybe all this is obvious to you, and maybe you could have predicted it. But to see this vivid demonstration of the generational divide, in person, blew me away.

I don't pretend to know what the solution to the file-sharing issue is. (Although I'm increasingly convinced that copy protection isn't it.)

Er, David, it's called changing the business model. It is just not sustainable to try to enforce analogue-type laws on digital content, and ultimately it's counterproductive - as the music industry is finding to its cost.

19 November 2007

What's a Paglo?

That was my first question to Brian de Haaff, CEO of the eponymous company. This is what he said, (more or less):

Francisco Paglo was a virtually unknown Italian explorer who first set sail as a lookout on Cadamosto's expedition to the Gambia River in 1455. Upon completion of a distance learning course in creative writing, he published a stirring account of the exploration from his viewpoint in the crow's nest, which was widely published throughout Europe. It ultimately caught the eye of Prince Henry the Navigator who was a Portuguese royal prince, soldier, and patron of explorers. Prince Henry summoned Paglo, and thanks to his generous funding, sent him on an expedition around Africa's Cape of Good Hope in 1460 to trade for spices in India. A storm pushed him off his target, and he finally dropped anchor in what is now known as New Zealand.

He never did set foot in India, but in New Zealand he remains a hero for bringing the country its first sheep, and his birthday (April 1) is celebrated every year with giant mutton pies. A growing movement has petitioned the government to officially establish the day as a national holiday — Dandy Mutton Day, in reverent appreciation for Paglo. On the eve of March 31 each year, children leave tiny bales of hay in their family rooms, hoping for the safe return of his ghost to their home and a flock of sheep for their family. Those who have been good the preceding year and have prepared fresh bales receive a bowl of lamb stew and freshly-knit wool socks and sweaters from their parents. But poor behavior and unkempt bales is frowned upon as a sign of disrespect, and these unfortunate kids receive a clump of manure.

And this is what the company does:

Paglo is a search engine for IT that specializes in searching the complex and varied data of IT networks, and in returning rich data reports in table and chart formats, as well as simple text hit lists.

As someone who was smitten with search engines ever since the early days of Lycos, WWWW and Inktomi, I was naturally highly receptive to this approach. Search has become the optic through which we see the digital world; applying it not just to traditional information, but also to corporate IT data is eminently sensible.

Things only got better when I found out that the search engine crawler was open source (GNU GPL to be precise). This makes a lot of sense. It means that people can add extra features to it to allow discovery of all kinds of new and whacky hardware and software through the use of plugins; it also means that people are more likely to trust it to wander around their intranets, gathering a lot of extremely sensitive information.

That information is sent back to Paglo, encrypted, where it is stored on their servers as a searchable index of your IT assets that can be interrogated. Now, obviously security is paramount here. I also worry about people turning up with a sub poena: after all, those search indexes will provide extremely useful information about unlicensed copies of software etc.; Paglo, not surprisingly, doesn't think this will be a problem.

There are other interesting aspects of Paglo, including its use of what it calls "social solving":

We do this by allowing all users to save their search queries and publish them for anyone’s use. The elegance here is that you can immediately access any query that’s been saved and made public, and run it against your own data. (Only the query syntax is published. The data itself, of course, is private to each user.) This is especially helpful when you need a query that searches out a complex relationship – such as between users and the applications they have installed on their desktops – and you do not know where to start. The permutations are endless, but since the core concept is the same, any saved query can be used against any set of network data.

But in many ways, the most interesting aspect of Paglo is its business model:

We are maniacally focused on delivering the most value, for the most users, as quickly as possible. To achieve this, we are removing barriers to getting started (like complex installation and cost) and making the service convenient to use. Our experience and the history of the Internet tells us that lots and lots of thrilled users of a free service are much more valuable than a handful of paying customers. If we are successful, you will love Paglo, use it daily, and tell your colleagues and friends.

Yup, that means that they don't have one, but they're really, really sure that if everyone uses them, they can find one. Of course, that's precisely what Google did, so there are precedents - but no guarantees. Let's hope the final business plan proves more credible than the explanation of the company name.

09 March 2007

Open Source Business Models

As readers of this blog may recall, in general I'm not a big fan of analysts, since they seem to offer very little other than a re-statement of what was blindingly obvious six months ago. But there are honourable exceptions.

Take, for example, this insightful presentation by Brent Williams, a self-styled "(temporarily) Independent Equity Research Analyst". It's unusual because it manages to combine a good understanding of the open source model and world with some grown-up economics. The result is well-worth reading.

I don't think Williams will be independent for long. (Via Once more unto the breach.)

31 January 2007

Steve Ballmer on Open Source

I am always amused - and slightly annoyed - that so much space is devoted to the wit and wisdom of Steve Ballmer, because basically he has none. That is, his words are pure marketing-speak, full of the right phrases, but signifying nothing. But at least in this FT interview, there's some interesting information about how Microsoft understands the open source challenge:

The biggest competitive challenges that any business faces is actually alternate business models. It is not a company. If you tell me somebody wants to come compete with us and do software in an area where we compete, or that we are going to get in a new area and it’s the same business model, it’s selling software, I know we can do it.

When somebody comes with a different business model, that’s where you get… or a phenomenon comes with a different business model.

What was the number one different business model that our company has confronted in the last six years? It’s Open Source. Open Source is not a technology phenomenon; it is a business model phenomenon. Frankly speaking, exactly what that business model is, is still unclear.

But that is a different business model and we had to ask ourselves: What do we do to compete? And we wound up saying it’s all about value and total cost of ownership, and high performance computing is a good example. It’s about 30 per cent of Linux share, and we are saying: Hey look, this is actually an area where we can take a lot of share with the right innovation, and the right total cost of ownership.

We shall see, Steve.

04 October 2006

Getting Creative with Money

The standard cry is: How do you make money from free? Well, Jamendo has a few ideas:

Jamendo sells advertising space on the jamendo.com web site and in the low-fi streamed music. We guarantee the hi-fi "peer-to-peer" music to be ad-free. This revenue helps us covering the bandwidth cost.

...

Jamendo drives lots of traffic to the artist's official web site as well, which helps to sell more physical CDs (if the artist sells CDs from their web site). Also, Jamendo's blogging capabilities help artists to spread in the blogosphere.

Finally, we are developing more tools to distribute Creative Commons music commercially. The revenue split will be somewhere around 80/20, with 80 for the artist.

(Via Creative Commons Blog.)

21 July 2006

United Nations of Free Software

Here's a useful round-up of free software projects at the United Nations - there's more than you might think. Pity that this section is so mealy-mouthed:

Most of the traditional software industry has its base in the developed world; there is concern that promoting FOSS could hurt this industry. From the developing countries' perspective, however, FOSS is a way to introduce competition in order to lower costs and expand options. The different views of the role of software in development have hindered the UN's ability to create a single coherent strategy for FOSS to apply to all member states.

Free software does not "hurt" the traditional industry, it merely brings a much-needed balance between users and suppliers. Business models may change, but as IBM and others have shown, there's plenty of money to be made under this new regime. To phrase it in terms of "hurt" gives succour to outdated and paternalistic practices that have no place in the new computing landscape.