I’m talking, sans ideology, about “free” as in no-money-up-front. When business is already hurting, up-front software license fees hurt especially hard, and I just don’t believe that Enterprise Software, as currently priced, has much future, in the near term anyhow. [This is part of the Tough Times series.]
Capex and Other Endangered Species · When times are tough, cash is king. “Capital” is cash; accountants pretend otherwise, but real businesspeople know better. And the reality we have to face is that the axe is gonna fall—in fact, it’s already falling—on capital expenditures. There are a lot of middle managers all over the world who, when they see capital-outlay requests come across their desks, won’t even take the issue up the management chain because they know what the answer’s gonna be.
In that environment, imagine what happens when you walk in with a project proposal and the up-front Oracle or Tibco or CA licensing costs are pushing six figures. You’ll be walking right back out again. The drum that Jonathan has been pounding on ever since I got here about “Monetization at the point of value” is just getting louder and louder and it’s not going away.
Technology adoption has to be free. Technology deployment has to be real cheap. When you scale a system up and you’re getting business value for it, that’s when you can actually write a proposal for infrastructure and support that won’t get turfed by the nearest corporate-finance person.
Take-Ways · Two seem obvious: First, use Open Source. Second, if you’re doing a startup, and you were thinking of the Enterprise Software business model, think again. Because nobody’s going to be cutting those big software-license POs.