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No-Frills Software

September 1st, 2004 · No Comments

Forbes writes about cheaper alternatives to various software applications:

the future will be dreadful for software vendors like IBM (nyse: IBM – news – people ), Microsoft (nasdaq: MSFT – news – people ) and Oracle. Customers will balk at ever-escalating prices for mainstream products and will opt whenever they can for bargain-basement software based on freely available code, such as MySQL or the Linux operating system. They’re using the mere threat of installing this open-source software to browbeat Oracle and Microsoft into coming back with better prices.

And, increasingly, customers are refusing to buy software at all, instead renting it over the Internet from service providers like Salesforce.com (nyse: CRM – news – people ) and Ketera, whose fees are 50% to 80% lower than the cost of installing and maintaining the packaged software equivalent. Venture investors are pumping millions into new low-cost providers, encouraged by the success of cheapware pioneers like Salesforce.com and Linux distributor Red Hat (nasdaq: RHAT – news – people ), which boast market values of $1 billion and $2.6 billion, respectively.

“There’s just no reason for customers to be paying so much for software,” says Marten Mickos, chief executive of MySQL AB, in Uppsala, Sweden. “Software is not rocket science. It’s a commodity. The business has been overglorified for 20 years.”

A presentation as part of the article outlines the alternatives.

Tags: Software

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