Sun’s open source business strategy
Two days ago there Matt Asay published an interview with Jonathan Schwartz, CEO of Sun Microsystems. It is a very interesting entry, specially because it gives a good insight on open source business, Sun’s strategy and what happens when a big fellow like Sun switches to open source. Here are the conclusions I got:
- Giving away free software makes you sell more
“In a year where Sun arguably moved more aggressively to give away more free software than any other company, we grew our software business by 13 percent. It was the fastest-growing business at Sun.”
- Brand is the most important asset in an open source business
“There are four fundamental questions/topics in open source: [...] The value of brand. As Red Hat knows, Red Hat is indomitable because of its brand, not its source tree;”
- The most important benefit Sun is getting with its open source strategy is branding
“Think about this: nearly every Brazilian sees my logo. Every day. Not because a sales rep puts it in front of them, but because they see it on OpenOffice, which their government or they downloaded for free.”
- Sun does not have a clear idea about its business model regarding open source
“What’s the business model? I don’t know. But if you don’t have adoption, it won’t matter what business model you use. Companies that sell open source are prioritizing community and adoption over instant monetization. We will win.”
- When Sun made the shift to open source, the main opposition came from the sales department. Once they aligned the sales compensation with the new model, opposition disappeared
“When Sun made the shift to open source, our sales force was the group within Sun the most opposed to the change. We therefore changed our sales compensation model to compensate them on bookings, not revenue. But we also offered to compensate them on revenue. So, if they wanted to close a revenue contract instead of a booking contract, they got to choose between the bigger of the two numbers. It took a day for them to make the shift. Open source gives them a body of users of trial software that they never would have been able to reach before. Now they are the biggest promoters of open source at Sun.”
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By Henrik Ingo, 16 September 2009 @ 9:06 pm
Interesting. I’ve heard almost this exact thing as a speech, but much later than Aug 2007. Seems like there wasn’t much new to say…
By Master, 16 September 2009 @ 10:14 pm
Right. I was at Sun Microsystem three months ago and attended a presentation by Scott McNealy, whose main messages did not differ much from the contents of this post. Well, at least it shows that Sun is coherent with their speech