Software Models

As Dan Bricklin thinks about what to do next as a software entrepreneur, he thinks about the different models for sofwtare development:

There is the traditional proprietary software model, where each copy of a product is distributed directly or through a reseller for a fee, and the software is maintained and modified only by the original developer. I’ve done that many times over the years. Marketing and sales costs can be quite high, and it doesn’t lend itself to the type of simple utilities I plan to start with, nor benefit from the lowering of marketing and distribution costs possible with the Internet.

There are the shareware (please pay me if you like it) and trialware (it stops working if you don’t pay after a while) models. They have been successful for various utilities and fits well with the Internet. They do, though, not seem to be put together that much with open source that can be read and modified by the user.

There is the “free open source with paid service model”, shown to be viable by companies like Red Hat and IBM. That looks good, but as a small company, I’m not sure (after having just spent years in a business that had a very high service component) that the needs of providing on-demand and 24×7 service will fit with the company size and lifestyle I want.

Another model is one used initially by SixApart with Movable Type, where they had a somewhat open source product (you got source and could make your own modifications, but were not allowed to redistribute it), no fee for noncommercial use, and a fee for commercial use and some simple services (help with installation). I like the idea of identifying those who benefit financially from a product and have a business model themselves which involves income and expenses, and having those people pay. I don’t like, though, the restriction on distribution that keeps the product from being improved or distributed by others. . Listening to Clayton Christensen, I want to help leverage the work of others who have their own motives, even if it’s profit, to widen distribution.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.